FRFI 212 December 2009 / January 2010

Labour’s draconian Welfare Reform Bill became law on 12 November 2009. The Act scraps entitlement to benefits based on need, forcing those aged 16-24 and people who have been unemployed for two years or more onto a workfare scheme. If you are not able to find employment you will be forced to work for 30 hours and take part in ‘work-related activity’ for 10 hours a week, all at the equivalent of £1.60 an hour for six months. Labour classes this as ‘intense work experience’ to ‘improve employability’. Work-related activity can include compiling CVs, doing countless job searches, attending work-focused interviews and being made to work in the worst, often temporary, jobs with bad pay and conditions. This is despite the fact that there were only 428,000 job vacancies during the three months to October 2009 whilst unemployment stood at 2.47 million by the end of September 2009. Failure to comply with the workfare regime can lead to benefit sanctions, tipping people who already have to struggle to survive on Jobseeker’s Allowance (£50.90 per week if you are under 24 or £64.30 per week if you are over) into destitution.

These workfare schemes will be piloted in Greater Manchester, Norfolk, Cambridgeshire and Suffolk from October 2010 and will be run by private companies. One such company is Action 4 Employment (A4E), whose owner Emma Harrison is worth £55m (Sunday Times Rich List). A4E already runs similar contracts; one, aimed at getting people back to work under the ‘Benefit Busters’ programme, is worth £700 million over five years. This has helped A4E become worth £145m, a value which Harrison expects to reach £500m by 2014.

The Act legalises the use of unemployed people as cheap labour; since it is deemed to be a supportive employment programme, it does not fall under minimum wage or hours rulings. It will therefore be used to drive down wages and undermine the conditions of those already in employment. It abolishes Income Support and Incapacity Benefit and replaces them with Employment Support Allowance (ESA). If you are deemed well enough for normal work by a doctor working for a private company, you will be moved onto JSA. Even before the Act was passed, a harsh new medical test meant that unsuccessful Incapacity Benefit claims were running at half the rate of successful ones (Financial Times 13 July 2009)

The Act forces single parents to attend work-focused interviews and take part in work-related activity (which includes numeracy and literacy training) when their youngest child reaches the age of one. Until the age of three, the requirement will be to attend a periodic interview at the Jobcentre; from three to six there will be a requirement to take part in training or other preparatory activities that fit within available childcare; and from seven there will be a requirement to look for work. Again sanctions will be implemented for non-compliance.

The regime that Labour has introduced harks back to the old Poor Laws which required people to enter the workhouse before they could receive any money or help. The underlying principle is the same: the poor are to blame for their poverty, and should be punished for it.

Mark Moncada