Show Hide image

Forget Benefits Street. When will we shame the scroungers lapping up corporate welfare?

Ignore the media misinformation: spending on out-of-work benefits isn’t out of control, nor is the welfare state responsible for growing poverty.

From The Big Benefits Row to Benefits Street, everyone in the media seems to want to talk about welfare these days. Or, more accurately, social security.

In an age of austerity, I won’t pretend to be surprised by the obsession with welfare and so-called “welfare dependency”, but there is a point worth making here: why do we obsess over handouts for the poor, rather than handouts for the rich? Why isn’t the scandal of corporate welfare the subject of fly-on-the-wall documentaries, too? When will my former colleagues at Channel 4 air a series called Bankers’ Street?

Ignore the media misinformation: spending on out-of-work benefits isn’t out of control, nor is the welfare state responsible for growing poverty. It cannot be repeated often enough: most of the social security budget (53 per cent) is spent on pensioners. That compares with a little over a quarter (26 per cent) on those much-maligned out-of-work benefits. Spending on the latter, as a proportion of national income, has been pretty flat for almost three decades.

The number of working households living below the poverty line now outnumbers the number of workless households – 6.7 million compared with 6.3 million. A life on social security isn’t the chief driver of poverty; a life on low pay is. Rather than decry the level of benefits that the jobless and the disabled are entitled to, perhaps politicians and pundits should focus on how four out of every five new jobs created under this government have been in low-pay sectors such as retail, hospitality and residential care. One in five of the UK workforce now earns less than the living wage and requires in-work benefits just to make ends meet – that’s five million people in total.

So let us turn instead to the real scandal, the issue that dare not speak its name: corporate welfare. Where is the ministerial or media anger over the activities of G4S and Serco, which are accused of ripping off the taxpayer but which make millions from lavish government contracts? Where are the howls of outrage over taxpayer-funded payouts to the fossil-fuel industry? The Met Office’s chief scientist may believe “there is a link” between the recent floods and climate change but the government continues to subsidise the coal, oil and gas industries to the tune of £2.6bn a year.

Why are the rail company bosses not household names in the same way as White Dee or Smoggy from Benefits Street? The UK has the most expensive rail fares in Europe and yet, according to research by the University of Manchester, the train-operating companies are completely dependent on public subsidies. The university’s June 2013 report for the TUC, aptly entitled The Great Train Robbery, revealed that the top five recipients alone got almost £3bn in taxpayer support between 2007 and 2011. Meanwhile, Network Rail, which is in charge of the UK’s rail infrastructure, receives an annual public subsidy of £4bn (roughly four times greater than the comparable cost under the publicly owned British Rail in the early 1990s).

Dare I mention PFI? Wait, don’t yawn at the back. The Private Finance Initiative, where construction and maintenance of schools, hospitals, roads and the rest are contracted out to private firms, was invented by the Tories in 1992, ramped up by New Labour over 13 years and continues under the coalition. As of 2013, it was forecast that 725 PFI contracts for public facilities across the UK, with a total capital value of £54bn, will cost the Exchequer more than £300bn by the time they are paid off. How’s that for a “something for nothing” culture?

Then there are the bank bailouts, perhaps the biggest act of corporate welfare in living memory. You want benefit spongers? Head for the Square Mile. As of 2013, the total level of financial support provided to the banks by the state, in the form of guarantees and cash outlays, amounted to £141bn, according to the National Audit Office. At the height of the financial crisis, the figure was an astonishing £1.1trn – enough to cover the £5bn Jobseeker’s Allowance budget for the next 200 years. And yet, in spite of being propped up by the taxpayer, RBS and Lloyds are expected to pay out roughly £900m in combined bonuses for 2013. Do I hear the word “scroungers”?

The truth is that the austerity junkies and deficit fetishists on the right aren’t bothered by welfare, or the cost of welfare, per se – only by the billions of pounds that go to the poor rather than the rich; to social programmes, job-guarantee schemes and housing for the homeless, rather than to the shareholders of multinational corporations and other financial institutions.

Remember: big business needs big government. The US economist Dean Baker rightly refers to “nanny-state conservatives”, whom he describes as “enthusiastic supporters of the big-government policies that send income flowing upward”. They are aided by their friends, allies and outriders in the right-wing media echo chamber, who have never had to endure the indignity of turning to payday lenders or food banks in order to survive. The callousness of commentators and columnists who kiss up and kick down, to borrow a line from the Labour MP Jon Cruddas, is unforgivable.

The job of the press, in the words of the Irish-American satirist Finley Peter Dunne, “is to comfort the afflicted and afflict the comfortable”. The modern media, however, with their relentless frenzy over social security payments to those at the bottom rather than corporate welfare payouts at the top, have shamelessly turned Dunne’s dictum on its head.

Mehdi Hasan is the political director of the Huffington Post UK and a contributing writer for the New Statesman

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 19 February 2014 issue of the New Statesman, The Space Issue

Show Hide image

Let's seize our chance of a progressive alliance in Richmond - or we'll all be losers

Labour MPs have been brave to talk about standing aside. 

Earlier this week something quite remarkable happened. Three Labour MPs, from across the party’s political spectrum, came together to urge their party to consider not fielding a candidate in the Richmond Park by-election. In the face of a powerful central party machine, it was extremely brave of them to do what was, until very recently, almost unthinkable: suggest that people vote for a party that wasn’t their own.
Just after the piece from Lisa Nandy, Clive Lewis and Jonathan Reynolds was published, I headed down to the Richmond Park constituency to meet local Green members. It felt like a big moment – an opportunity to be part of something truly ground-breaking – and we had a healthy discussion about the options on the table. Rightly, the decision about whether to stand in elections is always down to local parties, and ultimately the sense from the local members present was that it would be difficult  not to field a candidate unless Labour did the same. Sadly, even as we spoke, the Labour party hierarchy was busily pouring cold water on the idea of working together to beat the Conservatives. The old politics dies hard - and it will not die unless and until all parties are prepared to balance local priorities with the bigger picture.
A pact of any kind would not simply be about some parties standing down or aside. It would be about us all, collectively, standing together and stepping forward in a united bid to be better than what is currently on offer. And it would be a chance to show that building trust now, not just banking it for the future, can cement a better deal for local residents. There could be reciprocal commitments for local elections, for example, creating further opportunities for progressive voices to come to the fore.
While we’ve been debating the merits of this progressive pact in public, the Conservatives and Ukip have, quietly, formed an alliance of their own around Zac Goldsmith. In this regressive alliance, the right is rallying around a candidate who voted to pull Britain out of Europe against the wishes of his constituency, a man who shocked many by running a divisive and nasty campaign to be mayor of London. There’s a sad irony in the fact it’s the voices of division that are proving so effective at advancing their shared goals, while proponents of co-operation cannot get off the starting line.
Leadership is as much about listening as anything else. What I heard on Wednesday was a local party that is passionate about talking to people and sharing what the Greens have to offer. They are proud members of our party for a reason – because they know we stand for something unique, and they have high hopes of winning local elections in the area.  No doubt the leaders of the other progressive parties are hearing the same.
Forming a progressive alliance would be the start of something big. At the core of any such agreement must be a commitment to electoral reform - and breaking open politics for good. No longer could parties choose to listen only to a handful of swing voters in key constituencies, to the exclusion of everyone else. Not many people enjoy talking about the voting system – for most, it’s boring – but as people increasingly clamour for more power in their hands, this could really have been a moment to seize.
Time is running out to select a genuine "unity" candidate through an open primary process. I admit that the most likely alternative - uniting behind a Liberal Democrat candidate in Richmond Park - doesn’t sit easily with me, especially after their role in the vindictive Coalition government.  But politics is about making difficult choices at the right moment, and this is one I wanted to actively explore, because the situation we’re in is just so dire. There is a difference between the Conservatives and the Lib Dems. Failing to realise that plays into the hands of Theresa May more than anyone else.
And, to be frank, I'm deeply worried. Just look at one very specific, very local issue and you’ll perhaps understand where I'm coming from. It’s the state of the NHS in Brighton and Hove – it’s a system that’s been so cut up by marketisation and so woefully underfunded that it’s at breaking point. Our hospital is in special measures, six GP surgeries have shut down and private firms have been operating ambulances without a license. Just imagine what that health service will look like in ten years, with a Conservative party still in charge after beating a divided left at another general election.
And then there is Brexit. We’re hurtling down a very dangerous road – which could see us out of the EU, with closed borders and an economy in tatters. It’s my belief that a vote for a non-Brexiteer in Richmond Park would be a hammer blow to Conservatives at a time when they’re trying to remould the country in their own image after a narrow win for the Leave side in the referendum.
The Green party will fight a passionate and organised campaign in Richmond Park – I was blown away by the commitment of members, and I know they’ll be hitting the ground running this weekend. On the ballot on 1 December there will only be one party saying no to new runways, rejecting nuclear weapons and nuclear power and proposing a radical overhaul of our politics and democracy. I’ll go to the constituency to campaign because we are a fundamentally unique party – saying things that others refuse to say – but I won’t pretend that I don’t wish we could have done things differently.

I believe that moments like this don’t come along very often – but they require the will of all parties involved to realise their potential. Ultimately, until other leaders of progressive parties face the electoral facts, we are all losers, no matter who wins in Richmond Park.


Caroline Lucas is the MP for Brighton Pavilion.