Cameron’s double standards on benefits

The Prime Minister’s response to criticisms of child benefit betrays a worrying classism.

The government has spent much of the day facing renewed pressure over its proposed changes to child benefit: one senior Tory MP called them "unworkable", and a Treasury tax expert described them as "intrusive" and "an administrative burden".

Meanwhile, the shadow chancellor, Alan Johnson, has written to his Conservative counterpart, George Osborne, requesting clarification of how exactly the scheme would work, and who would be eligible under the convoluted new regime.

This is hardly shocking news. What is more surprising, however, is David Cameron's response to such concerns at his press conference.

Aside from how remarkably blasé he was about the practical difficulties, the Prime Minister displayed double standards in his government's approach to rich and poor welfare claimants, betraying a deep classism underpinning the government's implementation of social policy.

In relation to these concerns, Cameron said:

I don't start from the proposition that we are all appalling cheats and liars and tax evaders, and the rest of it, and I am quite sure this change will secure the very generous revenues that the Office for Budget Responsibility have pencilled in. So I don't predict a problem.

Contrast this with the government's plans to use private "bounty hunters" to crack down on what Cameron in August called the "absolutely outrageous" level of benefit fraud.

It seems he thinks that the higher earners who will be missing out are more honest and have a greater sense of civic responsibility than the poorer people who constitute the majority of welfare claimants.

What evidence is available does not support his claims – or prejudices. Those who earn more have greater opportunity to avoid tax, and more often have the social connections and knowledge to enable them to do so.

Tax evasion has been estimated to cost the Treasury £15bn a year – 15 times as much as benefit fraud. This figure doesn't include the legal tax avoidance indulged in by rich individuals and companies, which some have estimated to cost an additional £40bn a year.

So, it's very hard to maintain Cameron's claim that those who would lose their eligibility under the new scheme will be flocking to surrender their child benefits.

In contrast, the government's own figures suggested that last year roughly 1 per cent only of benefit was fraudulently claimed, amounting to £1bn a year, out of a total £148bn spend.

Obviously, any sort of fraud is a bad thing, and nobody would seriously suggest otherwise. It would also be seriously misguided to suggest that "all" those who stand to lose their child benefit are "cheats and liars and tax evaders". However, some will, and as times become harder it is not difficult to see why.

Most importantly, this shows just how wrong-headed this insidious discourse that contrasts an honest, civic-minded upper middle class with work-shy, dishonest lower earners is. What is most worrying is that such ideas are set to be reflected in how critical social policy reforms are implemented.

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.