Iain Duncan Smith’s plan to introduce a food stamp style ‘smart card’ scheme for so called ‘troubled’ families may yet just be the tip of the iceberg. It will be impossible to justify the huge and expensive infrastructure that smart cards will require unless they are to be extended far beyond just 120,000 families.
Meanwhile last month the Minister for Welfare Reform Lord Fraud quietly announced a tendering exercise asking High Street banks and pre-pay card providers to design new financial products aimed at helping benefit claimants with ‘budgeting’.
A national roll out of smart cards would see benefits loaded onto prepay cards, meaning the Government will have control on how benefits are spent. This is intended to prevent ‘troubled families’ from spending benefit money on drugs or alcohol.
The Government has identified 120,000 families who may be moved onto the scheme should IDS get his way, which will require a change in law. Unfortunately they don’t appear to be able to decide how to classify those troubled families, or whether they even exist.
However the numbers are eventually constructed, the national infrastructure required for a smart card scheme would be huge. The system would not just have to accommodate food, clothing and household purchases, but also take into account gas, electricity, broadband (essential to claim Universal Credit under new rules), water, rent payments, fines, council tax payments and countless other expenses. The cards will also need to accommodate the vast range of debt repayments which many claimants pay out each week to everyone from doorstep lenders to catalogue companies. Families who owe money to illegal lenders may find themselves especially at risk.
Ian Duncan Smith may not give a shit about claimants, but he certainly cares about energy companies and High Street loan sharks. Making this scheme attractive to these businesses, who will have to agree to the changes, will cost a lot of money. It will be impossible to justify this expense for just 120,000 families. Even odious George Osborne is so sick of paying out for Iain Duncan Smith’s madcap schemes that he’s already tried to sack him once.
According to the Daily Mail, Iain Duncan Smith said at the Tory Party Conference:
“I am looking at the moment at ways in which we could ensure that money we give [benefit claimants] to support their lives is not used to support a certain lifestyle”
At first glance this could be dismissed as pie in the sky thinking from a deluded Secretary of State desperate to get his name in the papers and bask in the glory of the Tory right. Unfortunately, anyone who has read the draft regulations for Universal Credit will be aware that a combination of savage brutality combined with completely unworkable initiatives is fast becoming the hallmark of welfare policy in the UK. Much like coppers, just because IDS is stupid, it doesn’t mean he’s not dangerous.
In September Lord Fraud called for companies to tender to deliver budgeting help for people moved onto Universal Credit. Between £80 and 145 hundred million is to be made available for companies to help claimant’s manage their budgets. Unlike the current benefits system, Universal Credit will be paid monthly, leading to concerns that desperately low income families will have household finances thrown into chaos by the plans.
Lord Fraud is asking for companies to design products which can be used: “To protect against ‘mis-spending and ensure that essential bills and payments are met payments could be ‘ring-fenced’.”
Fraud also suggests that: “More complex models for this could include additional divisions of money for savings or debt repayments.”
It seems that the DWP are already seriously looking into some form of voluntary spending controls on claimants. What starts out as voluntary provision in the welfare system rarely stays that way. Smart cards and government controlled spending may be coming much sooner than we think.
Universal Credit is set to be the most complex and wide ranging change in welfare ever introduced. Already it is said to be over-budget and behind schedule. Many aspects of the changes, from how it will manage free school meals to rent payments for Women’s Refuges, have not been fully resolved.
Now Iain Duncan Smith wants to add a whole new system of nanny state spending controls to the scheme, something he has never mentioned before and probably only came up with a fortnight ago. Whether he gets his way remains to be seen, but his intentions are becoming clear. Iain Duncan Smith thinks that the state should decide how benefits are spent, no matter what the cost to the tax payer or the families and individuals concerned.
The above pic comes from this site which has a story telling of the stigma of food stamps in the US: http://creatingmotherhood.com/2012/03/02/growing-up-food-stamps/