The growth of food banks shows why there must be no welfare cap

Cuts to benefits have pushed thousands of families to the edge. Welfare needs to be paid on the basis of need, not within some artificial limit.

Food bank use in south east England, the region known for its wealth and relative prosperity, is up over 60% this year and thousands of families face the prospect of relying on emergency food handouts this Christmas. A decade ago, food banks were almost unheard of in this area but there are now 59 across the region.

We know this thanks to a report from Green MEP Keith Taylor, who’s released Hungry Christmas, a report into the spread of food banks in his region. The report is published ahead of a debate on food banks in Parliament on Thursday, which came after the public demonstrated its understanding of the issue, with more than 100,000 people signing a petition on the subject within four days, possibly a record for the official government site. A group of public health experts have concluded that the rate of food poverty in Britain should be classed as a medical emergency.

At this year’s Green Party conference we heard from the brilliant Jack Monroe, known for the blog A Girl Called Jack; her story is not unusual. She went from a well-paying job working for the Fire Brigade to being a mother living on benefits that didn’t cover the bills. She had tried and tried to balance work and childcare but was stymied at every turn. Jack’s story hasd a happy ending. Not everyone’s does. Few can expect that – what stretches ahead of them are years and, unless our economy is transformed, decades of endless, grinding struggle for the basics of life.

As today’s report highlights, three new food banks are set up every week to help meet demand. Cuts to benefits such as housing benefit, child benefit and council tax benefit have pushed people to the edge. Increasing use of unreasonable sanctions that leave already desperate households with no income at all, force them to turn to charity. But the rise of food banks is not just a result of government’s welfare policies – although a report for Defra, delivered in early summer and mysteriously not seen since – probably shows how welfare cuts are a critical part of the process, and that’s certainly what Keith’s report demonstrates for this one region.

Low pay is, however, the other side of the story. Eighty seven per cent of people on benefits are in work – and many of those are the one in five workers on less than the living wage. That’s more than five million workers – the staff who serve you in shops, the school dinner ladies, the road sweepers and parking attendants you see every day – who can work a full-time week yet not earn enough money to live on. Then there’s the victims of fast-spreading zero-hours contracts. They’re employed, but they can get to the end of the week without any income, or with only a fraction of what they need to pay the rent, buy food, pay for heating and travel.

For despite the Chancellor’s gleeful posturing in this year’s Autumn Statement, the claim of "economic recovery" is not recognisable to most people. Wages are not in line with inflation, energy and transport costs are spiralling, and many people are in the "heat or eat" dilemma, a problem set to worsen due to this government’s disastrous lack of policies to ensure warm, comfortable, affordable-to-heat homes for all and its failure to invest in public transport and ensure its affordability.

So what is to be done: initially, the government should abandon its plan for a welfare cap – as should the Labour Party. Welfare needs to be paid on the basis of need, not within some artificial limit. It should stop pressuring Job Centre staff to sanction benefit recipients. And it should abolish the illogical, unfair bedroom tax, and ensure councils aren’t pushed to force low-income households that can’t afford it to pay council tax.

And it should make the minimum wage a living wage. Labour is saying it is going to ask employers to pay a living wage and offer tax breaks for doing so. I say we should ensure that everyone who works full-time earns enough money for a basic decent existence – the living wage.

A living wage is a salary people can live on, feed themselves and their children on. It would give people back some control over their lives and the ability to plan for the future rather than live a hand to mouth existence. Now that really would be a Merry Christmas from George Osborne.

A volunteer carries a basket of donated jam at the headquarters of the Trussell Trust Foodbank Organisation in Salisbury. Photograph: Getty Images.

Natalie Bennett is the leader of the Green Party of England and Wales and a former editor of Guardian Weekly.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.