Memo to Duncan Smith: low wages are not an argument for cutting benefits

The fact that benefits have risen faster than wages is an argument for higher wages, not lower benefits.

The latest argument deployed by Iain Duncan Smith in favour of the government's plan to cap benefit increases at 1 per cent for the next three years (below the rate of inflation) is that benefits have risen faster than private sector wages. The Work and Pensions Secretary is highlighting figures showing that the former have increased by an average of 20 per cent over the last five years (in line with inflation), while the latter have increased by 12 per cent. The statistics aren't new but the government's decision to publicise them shows that it fears Labour, which has denounced the policy as a "strivers' tax" (60 per cent of the real-terms cut falls on working families), may be shifting public opinion against the bill. While the polling results are mixed, one recent survey by Ipsos MORI found that 69 per cent believe that benefits should increase in line with inflation or more. (Conversely, a YouGov poll found that 52 per cent believe Osborne was right to increase benefits by 1 per cent, while a ComRes poll put support at 49 per cent.)

Duncan Smith said today: "Working people across the country have been tightening their belts after years of pay restraint while at the same time watching benefits increase. That is not fair. The welfare state under Labour effectively trapped thousands of families into dependency as it made no sense to give up the certainty of a benefit payment in order to go back to work."

In response, Labour has rightly pointed out that over the last ten years, as opposed to five, wages have risen faster than benefits. Jobseeker's allowance, for instance, has increased from £53.95 a week to £71, a rise of 32 per cent, while wages have increased by 36 per cent, from an average of £347 a week to £471. The current trend is a temporary quirk caused by the recession.

But even if we accept Duncan Smith's baseline, his logic is profoundly flawed. The fact that benefits have risen faster than wages is an argument for increasing wages (for instance, by ensuring greater payment of the living wage), not for cutting benefits. Many of those whose wages have failed to keep pace with inflation actually rely on in-work benefits such as tax credits to protect their living standards. The government's decision to cut these benefits in real-terms will further squeeze their disposable income. In the case of those out-of-work, ensuring that benefits rise in line with inflation is essential both as a matter of social justice - cutting support for the poorest means forcing even more families to choose between heating and eating - and of economic policy. Most claimants can't afford to save, so spend whatever they receive and stimulate the economy as a result. If anything, the government should be considering above-inflation increases in benefits to maintain consumer demand.

When Duncan Smith complains that benefits have risen faster than wages, he is really complaining that wages have risen more slowly than inflation (and are expected to continue to do so until at least 2014). But rather than prompting the government to slash benefits, this grim statistic should prompt it to pursue a genuine growth strategy that ensures more people have access to adequately paid employment. That, however, remains a distant hope.

Work and Pensions Secretary Iain Duncan Smith said it was "not fair" that benefits had risen faster than wages. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Don’t blame young people for not voting – blame the system that fails them

The majority of young people voted to Remain in the EU, but turn out was low. But this is a symptom of an unfair system, not a recent to punish them.

“A Britain divided” – that has been the dominant narrative to emerge in the aftermath of the Brexit vote a week ago. There has been talk of the divisions between rich and poor, the metropolitan and the regional, the Scottish and the English/Welsh, but perhaps the most vehement discussion has centred around the gulf between generations. Polling indicates that 75 per cent of 18-24 year olds voted Remain, while Electoral Commission data showed that, in urban areas where the average age was 35 and under, there was overwhelming support for remaining in the EU.

Older people, meanwhile, voted to leave, which is why the morning after the result, social media erupted in fury at the baby boomers and their parents accused of cocking up our futures (for it is we who will live longest with the fallout, after all). Rarely have I seen such vehemence directed at the old by the young.

There was, of course, the inevitable backlash. Generation Y, boomers argued, just couldn’t be arsed to wrench themselves away from their screens to go and vote. We don’t know the turnout figures for certain, but Sky data indicates it may have been shockingly low – 36 per cent for 18-24 year olds, and 58 per cent for those between 25-34. There was more than a whiff of disdainful superiority in the air from some of the older generation – many of their criticisms amounted to “shut up and stop whining”, or, “you’ll come crawling back when you need cash from the bank of mum and dad”. Worst of all was being told to bow down and respect our elders in their infinite superior knowledge.

Let’s say, for the sake of argument, that young turnout was as low as estimates suggest. Can this really be said to be an indictment of young people, or is it really an indictment of a system that alienates them utterly? There is a whiff of blaming the victims to all this. As Ben Bowman, a researcher on young people’s politics from the University of Bath tells me, “turnout and ‘low engagement’ are symptoms of an illness, not the illness itself. The illness is politics done at a distance from young people.”

Something else Bowman says resonates particularly with me, as someone who took part in the 2010 student protests against tuition fee rises and cuts to EMA, and then sunk into political disillusionment and disgust that our voices had meant nothing to the politicians implementing policy. “I can’t overstate the extent to which young people feel politics is about people needing things and being told ‘well, we haven’t got the money.’ The Iraq war, tuition fees and austerity have really shrunk the horizons of what young people consider possible. They are just trying to get by, to play by the rules and navigate increased risk in transition to adulthood.”

For this reason, as well as many others, it is unfair to heap derision on the young who didn’t vote (and for what it’s worth, some experts have said they actually think turnout may have been up). Dr James Sloam from the Department of Politics and International Relations at Royal Holloway university points out that public policy decisions have generally been against our interests. While rich pensioners keep their winter fuel allowance, their free TV licences and travel passes, we face the highest tuition fees in the western world, the closure of youth centres, a living wage that only starts at 25, and cuts to housing benefit. Why participate in a system that hates you?

Of course, the easy rebuttal to this is the fact that, unless you participate, the politicians (and the policies they create) will continue to ignore you. There’s an element of truth to this, but it fails to take into account several things. Firstly, thanks to our first past the post electoral system, there is a perception that, even if you do vote, that it doesn’t really count, and certainly doesn’t change anything. Secondly, there is the mantra, one you’ll hear again and again, that all politicians are the same. As Kelly McBride from The Democratic Society says:

“To large numbers of people the political system, party politics, the institutions of statehood seem like immutable objects. You cannot change the way that politics is done, or upheave centuries of tradition, or fight against what you consider the overwhelming social power of Oxbridge politicians and their friends running international business ventures.

“Why bother to swap one boring suit for another when nothing has got better for you or your family? As the old adage goes, “no matter who you vote for, a politician always gets in.”

These are words worth bearing in mind to those in the establishment still baffled by the popularity of Jeremy Corbyn, who at the time of writing is refusing to budge as Labour leader, amongst younger people. McBride tells me that my generation’s disenfranchisement is not just from the political apparatus of state, but from ideology, too. While older people can remember what it was like to have a political party formed on the basis of ideology, “young people today can probably count the number of politicians who seem to act out of principle or ideology on one hand, and such figures are roundly ridiculed in the press for being high-minded or weak leaders”. Sound like anyone we know?

If we are to get young people voting, it’s clear we need a wider range of politicians. A Demos/Vinspired report found that 56 per cent of young people would be more likely to vote if there were more local working class MPs. We also need more women, more candidates from diverse backgrounds, and younger representatives (just look at the 21-year-old SNP MP Mhairi Black, whose maiden speech went viral). The EU referendum campaign on both sides reflected this paucity perhaps more than any campaign that I can remember. Where were the women, the young people? It was basically just grey-haired men in suits arguing. When there was a debate for young people, it portrayed the sides as evenly split between leave and remain, thus giving a distorted view of how younger people felt about the issues involved.

I’m also not convinced that – despite the valiant efforts of campaign groups such as Bite the Ballot – was entirely made clear how important it was that young people registered to vote in this election. Many seemed unaware that their vote could have been a game-changer until afterwards. Plus, young people are notoriously peripatetic, and many will not have been at their term-time addresses. The registration system saw 1m people fall off the register. It fell by 40 per cent.

Before the referendum, an article for UKandEU argued that young voters are rarely anti-EU; they just don’t understand it. To my mind, the campaign did not help to clarify the already-murky waters. The impression I get from friends and acquaintances is that the EU debate led to a lack of confidence in terms of knowledge and understanding of the issues at hand that was not helped by politicians' statements or media coverage of them. “I don’t feel I know enough” was a phrase I heard again and again. It’s not something you hear so much from the older generation.

And if this referendum made anything clear, it was that not understanding the issues at hand didn’t put older people off voting. Perhaps it is the young who are truly wise. As Richard Bronk, a Visiting Fellow at the European Institute at LSE wrote in a recent blog post:

“The world has changed so fast that the Platonic idea of respecting the greater wisdom of the elderly is out of date . . . it is most of us over fifty who have no idea how social and economic life really operates in the interdependent, fluid and digital age in which our children live.” 

Rhiannon Lucy Cosslett is a writer for the New Statesman and the Guardian. She co-founded The Vagenda blog and is co-author of The Vagenda: A Zero Tolerance Guide to the Media.