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

Getty
Show Hide image

It's easy to see where Berlin is being rebuilt – just hit the streets

My week, from walking the streets of Berlin to class snobbery and the right kind of gentrification.

Brick by brick, block by block, the people are rebuilding the city once called Faust’s Metropolis. To see it clearly, put your boots on. One of the most bracing walks starts by the Gethsemane Church, which served as a haven for dissenters in the last days of the GDR and takes you down ­towards the Hackescher Markt.

Here, in what is still the eastern half of a divided city that wears its division more lightly, is a Berlin experience both old and new. In three decades of frequent visits, it has been fascinating to note how much this part of town has changed. Even a decade ago these streets were rundown. With crumbling buildings showing bulletholes, it wasn’t hard to imagine what the place looked like in 1945. Now there are lilacs, blues, and yellows. Cafés, bars and restaurants abound, serving the young professionals attracted to the city by cheap rents and a renewed sense of community.

 

Breaking the fourth wall

Looking north along Schliemannstraße, you’ll find a delightful vista of well-tended balconies. It’s a pleasant place to live, notwithstanding the gaggle of grotesques who gather round the corner in the square. On Kastanienallee, which forms the second leg of the walk, an old city feels young. It’s a kind of gentrification but the right kind. There’s more to eat, to drink, to buy, for all.

Berlin, where Bertolt Brecht staged his unwatchable plays, was supposed to have been transformed by a proletarian revolution. Instead, it has been restored to health by a very middle-class one. Germany has always had a well-educated middle class, and the nation’s restoration would have impossible without such people. The irony is delicious – not that irony buttered many parsnips for “dirty Bertie”.

 

The new snobbery

The British Museum’s survey of German history “Memories of a Nation” is being presented at the Martin-Gropius-Bau as “The British View”. Germans, natürlich, are curious to see how we observe them. But how do they see us?

A German friend recently in England  said that the images that struck him most forcibly were the tins of food and cheap booze people piled up in supermarkets, and the number of teenage girls pushing prams. Perhaps Neil MacGregor, the former director of the British Museum who will shortly take up a similar role here at the new Humboldt Forum, may turn his attention to a “German View” of the United Kingdom.

There’s no shortage of material. In Schlawinchen, a bar that typifies Kreuzberg’s hobohemia, a college-educated English girl was trying to explain northern England to an American she had just met. Speaking in an ugly modern Mancunian voice that can only be acquired through years of practice (sugar pronounced as “sug-oar”), she refer­red to Durham and York as “middle class, you know, posh”, because those cities had magnificent cathedrals.

When it comes to inverted snobbery, no nation can match us. To be middle class in Germany is an indication of civic value. In modern England, it can mark you as a leper.

 

Culture vultures

The Humboldt Forum, taking shape by the banks of the Spree, reconsecrates the former site of the GDR’s Palace of the Republic. When it opens in 2018 it will be a “living exhibition”, dedicated to all the cultures of the world. Alexander von Humboldt, the naturalist and explorer, was the brother of Wilhelm, the diplomat and philosopher, whose name lives on in the nearby university.

In Potsdamerplatz there are plans to build a modern art museum, crammed in between the Neue Nationalgalerie and the Philharmonie, home to the Berlin Philharmonic. Meanwhile, the overhaul of the Deutsche Staatsoper, where Daniel Barenboim is music director for life, is likely to be completed, fingers crossed, next autumn.

Culture everywhere! Or perhaps that should be Kultur, which has a slightly different meaning in Germany. They take these things more seriously, and there is no hint of bogus populism. In London, plans for a new concert hall have been shelved. Sir Peter Hall’s words remain true: “England is a philistine country that loves the arts.”

 

European neighbours

When Germans speak of freedom, wrote A J P Taylor, a historian who seems to have fallen from favour, they mean the freedom to be German. No longer. When modern Germans speak of freedom, they observe it through the filter of the European Union.

But nation states are shaped by different forces. “We are educated to be obedient,” a Berlin friend who spent a year at an English school once told me. “You are educated to be independent.” To turn around Taylor’s dictum: when the English speak of freedom,
they mean the freedom to be English.

No matter what you may have heard, the Germans have always admired our independence of spirit. We shall, however, always see “Europe” in different ways. Europe, good: we can all agree on that. The European Union, not so good. It doesn’t mean we have to fall out, and the Germans are good friends to have.

 

Hook, line and sinker

There are fine walks to be had in the west, too. In Charlottenburg, the Kensington of Berlin, the mood is gentler, yet you can still feel the city humming. Here, there are some classic places to eat and drink – the Literaturhauscafé for breakfast and, for dinner, Marjellchen, a treasure trove of east Prussian forest delights. Anything that can be shot and put in a pot!

For a real Berlin experience, though, head at nightfall for Zwiebelfisch, the great tavern on Savignyplatz, and watch the trains glide by on the other side of Kantstraße. Hartmut Volmerhaus, a most amusing host, has been the guvnor here for more than 30 years and there are no signs that his race is run. The “Fisch” at twilight: there’s nowhere better to feel the pulse of this remarkable city. 

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage