Why benefit loans still aren't the answer to Labour's welfare problems

A salary insurance scheme that would impose a 9 per cent tax on jobseekers after they return to work isn't worthy of the name.

I think it’s important to clear up some of the arguments made by IPPR’s associate director Graeme Cook in his response to criticisms of the think-tank’s idea for benefit loans. If you haven’t been following, you can read my original criticism of the plan here.

Graeme says:

To clear up one thing straight away: this proposal is in addition to existing entitlements to Jobseeker's Allowance (we do not want to turn JSA into a loan). This means that, contrary to one claim, it wouldn’t mean people who hadn’t worked get more than those who had.

People who hadn’t worked wouldn’t get access to this scheme, because access is based on NI contributions, so clearly they’re not getting more within the confines of the proposal – that’s not up for dispute. The point is that when looking at welfare benefits as a whole there would be people who hadn’t contributed and who were on benefits who got more in non-repayable benefits than people who were on repayable benefit loans and who had contributed. This would create resentment.

If it’s not immediately obvious why this would be, consider a typical staple of negative press welfare coverage – a workless household with a large family receiving child benefit for each child, and on housing benefit.  There are plenty of examples of this kind of piece, and it is these intensively reported, atypical outliers that shape the negative public perception of welfare.

Yes, these articles are unfair and ridiculous for countless reasons. But now consider sums like £30,000 being banded around for supposedly 'feckless' families in the context of other people who find themselves unemployed, receive less than that because they’re not eligible for housing benefit (maybe they have a mortgage) or child benefit (maybe they don’t have any children) and are then told they have to repay most of their benefits - unlike the person they’ve been told is a 'scrounger'. If Labour are planning to successfully explain to the public why this isn’t as unfair as it looks, they’re in for a shock.

If the policy is aiming to destroy the notion that the welfare state "pays out too much to people who have not worked, but also that it offers so little protection to those who have" (Graeme’s words), treating contributors as second class will not help. This policy has the potential to create a whole new genre of articles about how the welfare state is on the side of the wrong people, even if its intention is to do the opposite.

Graeme:

Some have argued that repayment will create a disincentive for people to return to work. Clearly this risk should be monitored on implementation, and the point at which repayments began and the repayment rate could be amended to reduce this concern.

Apart from this being a bit of a cop-out, I think it seriously misses a wider point: even if there was no deterrent to work from a 9 per cent hike in your tax rate, it’s just not fair to tax people for losing their jobs. To paraphrase Tony Benn: you don’t tax people because they lose their job, you tax people because they can afford it. The fact that it’s probably economically the absolute worst situation you could levy a tax on someone is probably secondary.

If you thought the ‘bedroom tax’ or the ‘jobs tax’ were politically toxic, wait until you hear about the ‘unemployment tax’. It’ would be the Poll Tax and the 10p rate rolled into one, and for good reason.

Graeme:

Critics of this idea have questioned why the extra income protection provided by NSI cannot be attained simply by increasing the level of contributory JSA. The problem of course is where the money would come from (we estimated the upfront cost at somewhere between £1.8bn and £2.6bn, though it is hard to be precise).

The first thing to say to this is that if you’re not prepared to actually spend any money on a group, don’t expect them to actually thank you. There are no free political lunches here: If Labour or IPPR are merely trying to address the perception that some people don’t get enough out of the welfare state, rather than the fact, then they haven’t learned the lessons from the empty, headline-grabbing, initiative-driven spin years of New Labour.

But this needn’t be a problem. The £2bn or so a year needed to substantially increase contributory JSA is roughly what the coalition is planning on spending on the Universal Credit, so it’s hardly a fanciful sum of money for a flagship welfare policy.

IPPR also misses that someone is going to pay this money, it’s just a question of who. Under their proposals, it’s funded by a 9 per cent tax on people who have lost their jobs. A fairer approach would be for everyone to pay before they were made unemployed, as is conventional in any kind of insurance scheme I’ve come across. Why is the think-tank calling this an insurance scheme if the costs are borne by the person who suffers the accident? It’s not really worthy of the name. In its current form it’s more of a bank than an insurance policy.

But the killer here is that the policy doesn’t need to be – and indeed ought not to be – deficit neutral. Businesses are not investing because there is no demand in the economy; putting money in the hands of consumers is a good thing because it creates demand, which allows businesses to invest, which results in growth. There are better and worse places to spend a demand stimulus, and giving it to the unemployed as disposable income one of the best: unemployed people have low incomes, therefore they spend all their money and have a very low propensity to save. This means the money has what is called a "high velocity" in that it changes hands very quickly and has a multiplier effect throughout the economy.

Labour has to some extent been talking the language of stimulus, but politically is scared of committing to spending anything. It should be jumping at the chance to combine Keynesianism with a politically savvy commitment that would restore the political reputation of the welfare state.

A man stands outside the Jobcentre Plus on January 18, 2012 in Trowbridge, England. Photograph: Getty Images.

Jon Stone is a political journalist. He tweets as @joncstone.

A woman in an Indian surrogacy hostel. Photo: Getty
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The Handmaid's Tale has already come true - just not for white western women

Why, if the fate of the fictional Offred is so horrifying, is the fate of real-life women in surrogacy hostels causing so little outrage?

When anti-choice Republican Justin Humphrey referred to pregnant women as “hosts”, I found myself wondering, not for the first time, whether everything had got “a bit Handmaid’s Tale.”

I’m not alone in having had this thought. Since Donald Trump won the US election, sales of Margaret Atwood’s dystopian novel have spiked and we’ve seen a plethora of articles telling us how “eerily relevant [it] is to our current political landscape.” In an interview during Cuba’s international book fair, Atwood herself said she believes the recent “bubbling up” of regressive attitudes towards women is linked to The Handmaid’s Tale’s current success: “It’s back to 17th-century puritan values of New England at that time in which women were pretty low on the hierarchy … you can think you are being a liberal democracy but then — bang — you’re Hitler’s Germany.”

Scary stuff. Still, at least most present-day readers can reassure themselves that they’ve not arrived in the Republic of Gilead just yet.

For those who have not yet read it, The Handmaid’s Tale tells the story of Offred, who lives under a theocratic dictatorship in what used to be the United States of America. White, middle-class and college-educated, Offred once enjoyed a significant degree of privilege, but now belongs to a class of women whose sole purpose is to gestate offspring for high-status couples. Much of the shock value of the story comes from the contrast between Offred’s former life – in which she had a name of her own - and her present-day existence. If this can happen to someone like Offred, it is suggested, surely it can happen to any of us.

Or so that is what a white, middle-class reader – a reader like me – might tell herself. Recently I’ve started to wonder whether that’s strictly true. It can be reassuring to stick to one narrative, one type of baddie – the religious puritan, the pussy-grabbing president, the woman-hating Right. But what if it’s more complicated than that? There’s something about the current wallowing in Atwood’s vision that strikes me as, if not self-indulgent, then at the very least naive.

In 1985, the same year The Handmaid’s Tale was published, Gina Correa published The Mother Machine. This was not a work of dystopian fiction, but a feminist analysis of the impact of reproductive technologies on women’s liberties. Even so, there are times when it sounds positively Handmaid’s Tale-esque:

“Once embryo transfer technology is developed, the surrogate industry could look for breeders – not only in poverty-stricken parts of the United States, but in the Third World as well. There, perhaps, one tenth of the current fee could be paid to women”

Perhaps, at the time her book was written, Correa’s imaginings sounded every bit as dark and outlandish as Atwood’s. And yet she has been proved right. Today there are parts of the world in which renting the womb of a poor woman is indeed ten times cheaper than in the US. The choice of wealthy white couples to implant embryos in the bodies of brown women is seen, not as colonialist exploitation, but as a neutral consumer choice. I can’t help wondering why, if the fate of the fictional Offred is so horrifying to western feminists today, the fate of real-life women in surrogacy hostels is causing so little outrage.

I suppose the main argument of these feminists would be that real-life women choose to be surrogates, whereas Offred does not. But is the distinction so clear? If Offred refuses to work as a handmaid, she may be sent to the Colonies, where life expectancy is short. Yet even this is a choice of sorts. As she herself notes, “nothing is going on here that I haven't signed up for. There wasn't a lot of choice but there was some, and this is what I chose.” In the real world, grinding poverty drives women of colour to gestate the babies of the wealthy. As one Indian surrogate tells interviewer Seemi Pasha, “Why would I be a surrogate for someone else if I don't need the money? Why would I make myself go through this pain?"

None of the feminists who expressed shock at Justin Humphrey referring to pregnant women as “hosts” have, as far as I am aware, expressed the same horror at surrogacy agencies using the exact same term. As Dorothy Roberts wrote in Killing The Black Body, the notion of reproductive liberty remains “primarily concerned with the interests of white, middle-class women” and  “focused on the right to abortion.” The right not just to decide if and when to have children, but to have children of one’s own – something women of colour have frequently been denied – can be of little interest of those who have never really feared losing it (hence the cloth-eared response of many white women to Beyoncè’s Grammy performance).

As Roberts notes, “reproductive liberty must encompass more than the protection of an individual woman’s choice to end her pregnancy”:

“It must encompass the full range of procreative activities, including the ability to bear a child, and it must acknowledge that we make reproductive decisions within a social context, including inequalities of wealth and power. Reproductive freedom is a matter of social justice, not individual choice.”

It’s easy to mock the pretensions to pro-life piety of a pussy-grabbing president. But what about the white liberal left’s insistence that criticising the global trade in sexual and gestational services is “telling a women what she can and cannot do with her body” and as such is illiberal and wrong? “Individual choice” can be every bit as much of a false, woman-hating god as the one worshipped by the likes of Humphrey and Trump.

One of the most distressing scenes in The Handmaid’s Tale takes place when Janine/Ofwarren has just given birth and has her child taken from her:

“We stand between Janine and the bed, so she won’t have to see this. Someone gives her a drink of grape juice. I hope there’s wine in it, she’s still having the pains, for the afterbirth, she’s crying helplessly, burnt-out miserable tears.”

Right now there are women suffering in just this way. Only they’re probably not white, nor middle-class, nor sitting in a twee white bedroom in Middle America. Oh, and they’re not fictional, either.

The dystopian predictions of 1985 have already come true. It’s just that women like me didn’t notice until we started to be called “hosts”, too.

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