Tag Archives: Resolution Foundation

Universal Credit Will Be Worse Than Tax Credits Says Think Tank Run By Tory

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How Universal Credit won’t make work pay for many (click to enlarge)

The DWP is attempting a defence of Universal Credit as criticism of the bungled reforms to the social security system grow ever louder.

The Resolution Foundation, a think-tank run by a former Tory minister, have slammed Universal Credit today warning that it will no longer make work pay for many claimants due to savage cuts.  According to a report published by the group the changes to the benefit’s system will “on balance be less generous than the tax credit system for working families”.   Those hardest hit are likely to be second earners and working lone parents.  These impacts will still be felt despite the rise in the minimum wage and cuts to income tax.  This will leave a suspicion that Universal Credit has become “a simple exercise in cost cutting” warns the organisation.

Making work pay was the official reason for Iain Duncan Smith’s sweeping changes to the social security system.  The original plans for the reform did indicate that many of those in work would receive a small rise in income – particularly those working a small number of hours per week. Then along came George Osborne who realised that widescale changes to social security were an opportunity to disguise the most savage cuts to the working poor’s benefits in decades.  And so the amount of money that people will receive when Universal Credit is finally introduced has been stealthily cut away to the point where it is now less generous than the current system.  As such the carrot – the term used by wankers who work in think tanks to mean any improvements in benefit levels – has disappeared.  Universal Credit now is just a big fucking stick designed to beat the poor into a lifetime of low paid endless toil.

The Resolution Foundation’s report acknowledges this saying ominously that  the success of Universal Credit now rests on the shoulders of ‘in-work conditionality’.  This is the elaborate system of benefit sanctions and Jobcentre harassment that is about to be inflicted on part time workers to force them to constantly seek to obtain more, or better paid work.  The implications are chilling.  It will no longer matter that you are working already.  It will not even matter if the job the Jobcentre wants you to take will make you worse off.  You will have no choice.  Do what your Work Coach tells you, or face benefit sanctions.  This system is already being piloted in some parts of the UK with devastating results.

Until now much of the DWP’s strategy has been based on the warped concept that unemployed people are responsible for unemployment.  And so they claim Iain Duncan Smith’s brutal welfare reforms worked, unemployment is currently relatively low. All those sanctions, the lives demolished, soaring homelessness, the deaths, have all been worth it.  This is ‘tough love’.  Sure some people die but for everyone else, well they get a job in Poudland on the minimum wage.

But even this horrifying mirage is untrue.  When the Tory government weren’t elected back in May 2010 the UK was emerging from a bleak recession and unemployment was high.  When growth returned, however slight, the jobs market picked up. It had nothing to do with Iain Duncan Smith’s endless crazy schemes, it’s just what hopefully happens after a recession.  If it hadn’t former millionaires would be stabbing each other over tins of tuna by now.

It’s there that the good news ends however.  Much of the rise in employment has been due to part time or temporary work and an increase in self-employment.  The number of working households claiming Housing Benefits because of low pay has doubled to over a million in the last six years.  That’s why the government are turning their attention to working benefit claimants.  So now it is not just that unemployed people are responsible for unemployment, but those who are low paid are also to blame for getting shit wages.

The Resolution Foundation say that simply harassing part time workers to get a second job will not be enough to ensure the success of Universal Credit as even the recently increased minimum wage will not provide a genuine living wage for most.  Instead they are calling for measures to be introduced to ‘help’ people earn more, although they suggest these should be outside of a conditionality regime.  The report notes that in some sectors, such as care or retail, almost half the workforce are paid at the level of the new minimum wage. Even if these people are working full time they will still need benefits to survive and so they must be encouraged to earn more says the report.

It is here that this think-tank stops thinking.  Just like the DWP they seem to believe that all of these low paying jobs would magically disappear if people stopped being so unaspirational.  That we could all have fantastic full time jobs with generous salaries and free fucking vol-au-vents everyday like think-tank workers do.  It is a middle class fantasy that assumes capitalism would be so nice for everyone if only the poor would just stop being so poor. Everyone can do a non-job and sit at a desk all day for thirty grand a year if they try hard enough.  The bins will empty themselves after all.

It does not take much to find the truth behind this happy clappy facade.  Whilst the DWP gushingly announce to claimants that Universal Credit will help them earn more money they are telling bosses that the new system will allow them to fill ‘any job’ and help manage the ‘peaks and troughs’ of their business.  That it will help employers “identify opportunities for flexible working” and increase competition for vacancies.  That does not sound like a reform intended to help workers raise their wages or increase job security.  The Resolution Foundation are wrong, and they know it.  They are simply too committed themselves to half-baked ideology that blames the poor for their plight to call for the obvious solution to the problems they raise in their report.

Universal Credit should be scrapped, tomorrow.  It has barely even been implemented anyway.  There is no computer system currently capable of handling the scale and variety of claims it will need to process, just a trial going on in a couple of Jobcentres.  Only the simplest claims, single newly unemployed people without kids, are currently being asked to claim Univeral Credit in most parts of the country and these are being administered in almost the exact same way as current unemployment benefits.  As one DWP insider put it, “it’s still exactly the same just under a different name.“

Iain Duncan Smith has gone and good fucking riddance.  Now is the perfect time to end this shambles.  Don’t hold your breath though, new Work and Pensions Secretary Stephen Crabb is a dick.  Worse, he’s an ambitious dick without the brains to back it up.  The financial security of millions of people now lies in the hands of some God-bothering chipmonk who once saw an episode of The Office and decided that David Brent would make a good role model.  We’re fucked.  Nothing left to lose and might as well have a revolution fucked.  Start buying tins of tuna.  And pitchforks.

Still for now at least we can trash the DWP’s facebook campaign singing the praises of Universal Credit.

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