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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What are the consequences of Brexit for the refugee crisis?

Politicians neglected the refugee crisis whilst campaigning – but they shouldn't now concede to the darker undertones of the debate.

In the chaotic aftermath of Brexit, the refugee crisis seems like a distant memory. Yet not even a year has passed since the body of a young Syrian boy washed up on a Turkish beach, shocking the world.

When campaigning for the EU referendum began, politicians neglected the crisis. Not because the situation had ameliorated, but because the issue had become strategically toxic. Nigel Farage's infamous poster aside, the Leave side preferred scare stories about economic migrants rather than refugees; the Remain side because the refugee crisis, more than anything else since its inception, highlighted the fragility of the ideals that underpin the European Union.

Many of the main issues aired in the course of the referendum debate were related to the refugee crisis, regardless of how little it impacted on them in reality; immigration, strain on public services, national identity. The refugee crisis became a proxy issue; implied, but not addressed, for fear of detrimental impact in the polls.

However, in his repugnant posters (it should be stressed, nothing to do with Leave campaign itself), Nigel Farage made explicit what he thought posed the greatest threat to the UK. Rightly, the posters have been condemned by both sides of the referendum debate, but the underlying suspicion of refugees it reflects has concerned many organisations.Their concern has only been exacerbated by the result of the referendum. The spike in hate crime compounds their fears.

Paul Dillane, head of UKLGIG, a charity that supports LGBTI asylum seekers to the UK, expressed unease at the reaction of his clients: “The asylum seekers I work with do not understand the decision that has been made – they feel vulnerable, they feel unwelcome. Yes the law hasn’t changed, and if they’re at risk of persecution, they will be protected. But they don’t feel like that now.”

Despite the troubling situation, the result of the referendum changes little when it comes to refugee law. “Refugee policy is shaped in London, not in Brussels”, said Stephen Hale, Chief Executive of Refugees Action. “The decision about how well we support refugees in terms of integration is a matter for the UK, not Brussels. The number of Syrian refugees we choose to resettle is a matter for the UK, not Brussels.”

Although the law may not have changed, from a diplomatic or political perspective, the same cannot be said. This does have the power to negatively impact legislation. Post-Brexit reaction in France surrounding the Touquet Treaty typifies this.

The Touquet Treaty, reached between the UK and France in 2003, permits each country to carry out passport checks on the other countries’ soil. It is what, according to French politicians in Calais, has accelerated the growth of the "Jungle", which currently accommodates close to 5,000 refugees.

Because the agreement was signed outside the auspices of the European Union, Brexit does not affect its legal legitimacy. However, for France, EU membership was crucial to the nature of the agreement. Speaking earlier this year, Harlem Desir, French Secretary of State for European Affairs, said the Touquet Treaty is “a bilaterial agreement. So, there will be no blackmail, nor threat, but it’s true that we cooperate more easily in both being members of the EU.”

Natacha Bouchart, mayor of Calais and a long-time critic of the treaty, has been vocal in her demands for legislative change since the result. Speaking to French broadcaster BGM TV, she said: “The British must take on the consequences of their choice. We are in a strong position to push, to press this request for a review and we are asking the President to bring his weight to the issue.” Some have adopted the slogan of the Leave campaign, telling them to now “take back control of your borders.”

Modification of the Touquet Treaty was branded part of ‘Project Fear’ by the Leave campaign. Because of this, change – if indeed it does happen – needs to be handled carefully by both the British and French governments.

The reaction of Natacha Bouchart is already a worrying sign for refugees. Firstly, it perpetuates the toxic narrative that casts refugees as an inconvenience. And secondly, any souring of relations between the UK and France over Brexit and the Touquet Treaty only increases the likelihood of refugees being used as political bargaining chips in the broader EU crisis over Schengen.

A divided government and disintegrating opposition do little to aid the situation. Furthermore, come October, how likely is a Brexit Tory cabinet – governing off the back of a manifesto predicated on reducing immigration – to extend the support networks offered to refugees? Even before the referendum, Theresa May, a supporter of the Remain campaign, said that Britain should withdraw from the European Convention on Human Rights, replacing it with the more questionable Bill of Rights.

Uncertainty of any kind is the most immediate danger to refugees. “Everyone is talking about it,” said Clare Mosesly, founder of Care4Calais. “But opinions on the impact are divided, which is creating yet more uncertainty.” Refugees, unsure whether Brexit will lead to increased fortification of the border, are prone to take ever more dangerous risks to reach the UK. Even economic uncertainty, seemingly distinct from issues such as the refugee crisis or immigration, has a negative impact. “The thing that worries me about a fragile economy”, said Paul Dillane, “is that when a country’s economy suffers, minorities suffer as well. Tolerance and inclusivity are undermined.”

The government must stress that the welcoming principles and legislation Britain had prior to Brexit remain in place. Andrej Mahecic, from the UNHCR, said “we will continue to rely on the UK’s strong support for humanitarian responses to refugee crises. Our work with the government on the UK’s asylum system and refugee resettlement schemes continues.”

The will from NGOs is there. The political will is less assured. In the aftermath of Brexit, the government must not concede to the darker side of the referendum debate.