The government is hurting those trying to stay off the dole, while filling workplaces with free staff. Voters should be shocked
With a gnashing of teeth, the employment minister Chris Grayling backed down as companies shied away from his unpaid work scheme that threatened young people's already meagre weekly benefit of £53.45. Protests and a Twitter storm against unpaid shelf-stacking alarmed Tesco into paying the minimum wage and guaranteeing jobs: a brilliant result. UK Uncut exposing Barclays' tax avoidance has finally led HMRC to act, so as St Paul's Occupy protesters move on, don't say protest is pointless.
However, objections by bishops were bootless as the welfare reform bill passed, barely amended. The government revels in a hefty majority heartily supporting its £18bn benefit cuts. A drip-drip of startling scrounger stories did the heavy lifting, so most people have no idea what brutality is to be done in their name. The BBC has signally failed to inform the nation, bolstering the "scrounger" narrative with ill-timed documentaries on the workshy by Panorama and John Humphrys. With dole claimants rising towards 3 million, and 6.3 million in all seeking work or longer hours, the government has devised a strange sociology suggesting an epidemic of laziness, ignoring the worst depression since the 1930s.
But has it finally gone too far? When the public discovers what's happening, attitudes may change. Remember Gordon Brown's catastrophic miscalculation in abolishing the 10p tax rate for the lowest paid: using the money to bribe middle earners by cutting their taxes backfired badly. Fickle voters can't be relied on to be selfish all the time, so when people hear what's about to happen, they may react in the same way.
On 6 April, low-paid working couples with children will lose a colossal £3,870 in tax credits from a typical income of £17,000. Where previously someone in the family had to work 16 hours to qualify, now they must work 24 hours a week or lose tax credits. But what if no extra hours are available? Hundreds of thousands of households will be caught in this trap, with 470,000 children. Most already want longer hours. TUC research says 1.3 million part-timers seek full-time jobs; Usdaw, the shopworkers' union, finds 78% of its part-timers can't get extra hours. Government figures for people getting jobs forget to say most are part-time. Nor do they proclaim the severe punishment about to fall on families failing to work 24 hours. Oddly, the victims are the very people Conservatives praise – not single parents, but working couples with children, struggling to stay off the dole. Will this enormous drop in incomes fall below the political radar – or will voters discover and be shocked?
Gill and Tony, with three children, both worked full-time until recently, Tony a printer, Gill a care home administrator. But when their youngest child was born with multiple disabilities needing many operations, Gill gave up work. With printing in decline Tony lost his job, and for the past two years can only find 18 hours' supermarket work. He constantly asks for extra hours, but so does everyone: in Liverpool there are 8.5 unemployed for every vacancy. Without more hours, they expect to lose about £300 a month in tax credits. With a £347-a-month mortgage on their small terraced house, they fear losing their home. Insanely, Usdaw's figures show Tony would be better off giving up work to get housing benefit, costing the state more. Nationally, supermarket workforces are shrinking: 300,000 lost from retail in the past year (good reason to boycott self-checkouts).
But just as existing workers struggle frantically for crucial extra hours, the Department for Work and Pensions puts the unemployed to work for free at shelf-stacking and cleaning – 34,200 young people have been put on unpaid work experience so far, with weak evidence it finds them jobs. Jonathan Porte, of the National Institute of Economic and Social Research, finds the ministers' claim that 50% leave benefits compares poorly with the 60% who leave jobseeker's allowance anyway within three months with no scheme.
Conditions have always been attached to benefits – the "no fifth option of continued full benefit" of Labour's successful New Deal, for example. Compulsion for the unemployed to join programmes seems reasonable so long as schemes are high quality with a good chance of leading to jobs, not pointlessly harassing people with no chance of work. Until now, great care was taken not to displace real jobs through free labour for large companies well able to pay the minimum wage. Work experience for the young has drawn all the flak, but the "mandatory work activity" programme forces adults to work up to 30 hours a week over a month for free, or lose benefit. The DWP's own equality impact assessment shows those mandated into unpaid work are more likely to be from an ethnic minority and disabled than other unemployed people. No wonder the DWP's social security advisory committee strongly advised against this, and the extraordinary power to make disabled people in the "work related activity group" take unpaid work indefinitely.
So on the one hand the DWP imposes draconian cuts on families who can't find 24 hours a week paid work, yet at the same time puts tens of thousands of free labourers into their workplaces, making those extra hours ever harder to find. This week I had a run-in with the former social security secretary Peter Lilley on Radio 5 Live as he tried to defend the government's schemes, but it was plain he had forgotten the three essential ingredients in Project Work, his 1996 initiative, which I praised at the time: people were paid extra above their benefits, and worked for charities and community programmes to avoid displacing other workers – and compulsion was applied at a time of rising employment, with a good chance of leading to real jobs. None of these principles applies now. Worst of all, depriving existing staff of extra hours of work will contribute to families losing their tax credits. Iain Duncan Smith promises universal credit, (depending on the functioning of the biggest computer scheme ever) will make all work pay, even short hours. But that's easy once he has drastically cut benefits and tax credits. Unemployment pay had dropped in 35 years from 17% of average earnings to just 10%: now it's falling far faster.
April will bring plenty of Nick Clegg's promised social mobility – but it will all be downwards. Raising tax thresholds does nothing for these people, as hundreds of thousands of children are pushed into poverty by a monumental drop in family income. This cut denies everything the government says about "making work pay" and supporting couples. Politically, will this finally shock enough voters?
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