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Laurie Penny on workfare’s unfair blame game

Twitter to the left of me, Daily Mail to the right: here I am, stuck in the middle.

Sometimes you don't notice a line in the sand until you trip over it. What is most shocking about the outcry over Tesco's "workfare" job advert, which offered the exciting opportunity to stack shelves for "Jobseeker's Allowance plus expenses", is that anyone was shocked.

Workfare of this kind has been part of the plan for years. But something has snapped. Twitter and the Daily Mail, the Scylla and Charybdis of public disapprobation, are foaming with outrage and companies that had signed up to get forced labour on the cheap are jumping ship.

In the middle of the worst economic crisis in living memory, the centre right is on a mission to make pauperisation socially acceptable. Words such as "incentivise" and "encourage" are used to describe the policy of forcing people to choose between starvation and accepting poverty wages. A welfare system intended to ensure that no child should go hungry, in a country where the average pay of investment bankers at one company is £236,000, is undermined by attacks on "scrounging" and "entitlement".

Yes, many in Britain have become dependent on welfare. The reason for this is not that we have suddenly become a nation that prefers to put our collective feet up in a pair of looted trainers and watch The Xtra Factor than go out and do a day's work. The reason is that a day's work no longer pays the rent.

Nor has it done for some time. Due to the rising cost of property, the lack of social housing and the end of rent controls, hundreds of thousands of families rely on welfare to keep a roof over their heads: more housing benefit recipients are in work than are unemployed. For years, stagnating wages were topped up by credit but now the credit is gone.

So the narrative must be rewritten. The poor, the sick and the disabled must be blamed for their circumstances. I am currently visiting the US, where destitution has been socially acceptable for some time. Bill Clinton's and Newt Gingrich's 1996 reforms refashioned welfare from a system of social support to a way of providing business with warm, docile bodies on the cheap by shovelling people into low-waged jobs. Everyone I meet here dreads unemployment, because there is no safety net. This British government, like the one before it, appears to believe that the US model offers a solution to the economic crisis.

Suits them

The trouble is that workfare doesn't work. It doesn't work in the US, where poverty is at its highest level for two decades, and it won't work in Britain. For the stuffed suits in the world's financial centres, making workers choose between low-paid labour and abject poverty makes perfect sense. It seems to have come as an enormous surprise, however, that not everybody else is OK with this plan. Tesco has said that its advert was a mistake. Too right it was - it was a mistake to think that the British public was ready to accept workfare.

Keeping people happy with low pay, long hours and crippling debt has always required careful PR work, but there are few ways to spin mass pauperisation successfully without the promise of a better tomorrow.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things .

This article first appeared in the 27 February 2012 issue of the New Statesman, The God Wars

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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR