Labour should make the economic case against welfare cuts

Welfare cuts aren't just bad for the poor, they're bad for growth too. Miliband and Balls should say so.

Labour and other opponents of the government's welfare cuts have so far focused on their unfairness. How can ministers charge social housing tenants for their "spare rooms" (the notorious "bedroom tax"), cut council tax support by 10 per cent (forcing thousands of families to pay the tax for the first time) and cap benefit increases at just 1 per cent while simultaneously handing 13,000 millionaires an average tax cut of £100,000 a year? But in doing so they are in danger of ignoring another important argument against the measures: welfare cuts aren't just bad for the poor, they're bad for growth too. 

When George Osborne announced most of the government's welfare reforms in his first Budget and in the 2010 Spending Review (the bedroom tax was described as "limiting social tenants’ entitlement to appropriately sized homes") it was on the assumption that the economy would be growing at nearly 3 per cent a year (the OBR originally forecast growth of 2.8 per cent in 2012 and 2.9 per cent in 2013). It is now expected to grow by just 0.6 per cent. Rather than cutting into an expanding economy, Osborne will be cutting into a stagnant one. And austerity, as the OBR reminded David Cameron last week, has  consequences. For every £100 of welfare cuts, GDP is reduced by around £60 a year. 

To anyone with an elementary understanding of economics, this will come as no surprise. If the government reduces someone's benefits by £728 a year (the average annual cost of the "bedroom tax"), that's £728 less for that person to spend on goods and services. And since, as Paul Krugman sagely observes, "your spending is my income" (and "my spending is your income"), it's not just the claimant who loses out, it's shops and businesses too.

In addition, since the poor are more likely to spend, rather than save, what little they receive, welfare cuts are around twice as economically harmful as tax increases (the OBR estimates that output is reduced by £60 for every £100 of welfare cuts, compared to £35 for increases in VAT and £30 for increases in income tax). It's for this reason that wise governments allow welfare spending to rise in times of stagnation. While borrowing temporarily increases as a result, higher benefits (known as the  "automatic stabilisers") are an essential means of maintaining consumer demand. In October 2012, George Osborne remarked: "We have never argued that you stop what economists call the automatic stabilisers operating - the lower tax receipts and extra government payments [such as higher benefits] that follow if, for example, the global economy turns down." In his recent New Statesman essay, Vince Cable similarly claimed: "Unlike the Treasury in the interwar period, which insisted on balanced budgets, the coalition government has been Keynesian in approaching fiscal policy in a broadly counter-cyclical manner by letting stabilisers operate."

But Osborne’s decision to cap benefit increases at 1 per cent (alongside other pro-cyclical measures) runs entirely against such logic. Welfare payments will now fall, rather than rise, in line with inflation, reducing real-terms incomes. As a result, Britain’s anaemic economy will be even more prone to recession. Welfare cuts, in short, aren't just bad for the poor, they're bad for all of us. And it's time Labour and the left said so.

Work and Pensions Secretary Iain Duncan Smith speaks at last year's Conservative conference in Birmingham. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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A new German law wants to force mothers to reveal their child’s biological father

The so-called “milkmen’s kids law” would seek protection for men who feel they have been duped into raising children they believe are not biologically theirs – at the expense of women’s rights.

The German press call them “Kuckuckskinder”, which translates literally as “cuckoo children” – parasite offspring being raised by an unsuspecting innocent, alien creatures growing fat at the expense of the host species’ own kind. The British press have opted for the more Benny Hill-esque “milkmen’s kids”, prompting images of bored Seventies housewives answering the door in negligées before inviting Robin Asquith lookalikes up to their suburban boudoirs. Nine months later their henpecked husbands are presented with bawling brats and the poor sods remain none the wiser.

Neither image is particularly flattering to the children involved, but then who cares about them? This is a story about men, women and the redressing of a legal – or is it biological? – injustice. The children are incidental.

This week German Justice Minister Heiko Maas introduced a proposal aimed at to providing greater legal protection for “Scheinväter” – men who are duped into raising children whom they falsely believe to be biologically theirs. This is in response to a 2015 case in which Germany’s highest court ruled that a woman who had told her ex-husband that her child may have been conceived with another man could not be compelled to name the latter. This would, the court decided, be an infringement of the woman’s right to privacy. Nonetheless, the decision was seen to highlight the need for further legislation to clarify and strengthen the position of the Scheinvater.

Maas’ proposal, announced on Monday, examines the problem carefully and sensitively before merrily throwing a woman’s right to privacy out of the window. It would compel a woman to name every man she had sexual intercourse with during the time when her child may have been conceived. She would only have the right to remain silent in cases should there be serious reasons for her not to name the biological father (it would be for the court to decide whether a woman’s reasons were serious enough). It is not yet clear what form of punishment a woman would face were she not to name names (I’m thinking a scarlet letter would be in keeping with the classy, retro “man who was present at the moment of conception” wording). In cases where it did transpire that another man was a child’s biological father, he would be obliged to pay compensation to the man “duped” into supporting the child for up to two years.

It is not clear what happens thereafter. Perhaps the two men shake hands, pat each other on the back, maybe even share a beer or two. It is, after all, a kind of gentlemen’s agreement, a transaction which takes place over the heads of both mother and child once the latter’s paternity has been established. The “true” father compensates the “false” one for having maintained his property in his absence. In some cases there may be bitterness and resentment but perhaps in others one will witness a kind of honourable partnership. You can’t trust women, but DNA tests, money and your fellow man won’t let you down.

Even if it achieves nothing else, this proposal brings us right back to the heart of what patriarchy is all about: paternity and ownership. In April this year a German court ruled that men cannot be forced to take paternity tests by children who suspect them of being their fathers. It has to be their decision. Women, meanwhile, can only access abortion on demand in the first trimester of pregnancy, and even then counselling is mandatory (thereafter the approval of two doctors is required, similar to in the UK). One class of people can be forced to gestate and give birth; another can’t even be forced to take a DNA test. One class of people can be compelled to name any man whose sperm may have ventured beyond their cervix; another is allowed to have a body whose business is entirely its own. And yes, one can argue that forcing men to pay money for the raising of children evens up the score. Men have always argued that, but they’re wrong.

Individual men (sometimes) pay for the raising of individual children because the system we call patriarchy has chosen to make fatherhood about individual ownership. Women have little choice but to go along with this as long as men exploit our labour, restrict our access to material resources and threaten us with violence. We live in a world in which it is almost universally assumed that women “owe” individual men the reassurance that it was their precious sperm that impregnated us, lest we put ourselves and our offspring at risk of poverty and isolation. Rarely do any of us dare to protest. We pretend it is a fair deal, even that reproductive differences barely affect our lives at all. But the sex binary – the fact that sperm is not egg and egg is not sperm – affects all of us.

The original 2015 ruling got it right. The male demand for reassurance regarding paternity is an infringement of a woman’s right to privacy. Moreover, it is important to see this in the context of all the other ways in which men have sought to limit women’s sexual activity, freedom of movement and financial independence in order to ensure that children are truly “theirs”.  Anxiety over paternity is fundamentally linked to anxiety over female sexuality and women’s access to public space. Yet unless all women are kept under lock and key at all times, men will never, ever have the reassurance they crave. Even then, the abstract knowledge that you are the only person to have had the opportunity to impregnate a particular woman cannot rival the physical knowledge of gestation.

We have had millennia of pandering to men’s existential anxieties and treating all matters related to human reproduction, from sex to childbirth, as exceptional cases meaning women cannot have full human rights. Isn’t it about time we tried something new? How about understanding fatherhood not as winning gold in an Olympic sperm race, but as a contract endlessly renewed?

What each of us receives when a child is born is not a biological entity to do with as we choose. It is a relationship, with all of its complexities and risks. It is something worth contributing to and fighting for. Truly, if a man cannot understand that, then any money wasted on a Kuckuckskind – a living, breathing child he could get to know – has got to be the least of his worries. 

Glosswitch is a feminist mother of three who works in publishing.