Protestors against the bedroom tax outside the High Court in February 2014. Photo: Oli Scarff/Getty
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What has happened to the disabled people affected by the Coalition’s welfare reforms?

Frances Ryan revisits previous interviewees to find out how they are coping with the bedroom tax and the changes to benefits like the Disability Living Allowance.

Sitting in their two-bed flat in Southport, Merseyside, a wheelchair cramped up next to a hospital-type bed, Jayson and Charlotte Carmichael have found themselves unlikely figures of the coalition government.

I first spoke to the couple back in February 2013, two months before the bedroom tax – which saw working age social tenants have their housing benefit cut for “under-occupying” their home – would come into force nationwide. The Carmichaels are in many ways reflective of why the policy went on to become the most controversial social security cut of the past five years. Charlotte, 42, has a severe spinal condition and is partially confined to a specialist bed. Sharing an ordinary bed with her husband, Jayson, would cause damage to her permanent pressure sores and their flat, partly adapted for Charlotte’s needs, is too small to put both beds in one room. Despite the fact that Charlotte sleeps there every night, due to her carer also being her live-in partner, from April 2013, the couple began losing £12 a week for having a “spare” room.

Since then, the Carmichaels have been challenging the bedroom tax on two fronts: taking their own case to a local tribunal in a bid to be judged exempt from the policy and going to the Supreme Court, as part of a group case of five families, to overturn the legislation itself. It has been two years of court dates, battles, and exhaustion.

“I have been depressed and sometimes thought enough is enough, we can’t go on anymore. Then we have a small success and I pull myself around and say ‘we have to go on to help others in the same boat, other disabled people’,” Jayson, 52, tells me when we speak again. “I try and use adrenaline to keep going.”

The “small successes” Jayson describes have allowed the couple to so far keep paying the rent. In April 2013, they successfully applied for Discretionary Housing Payments (DHP), the emergency short-term fund designed to assist some disabled people affected by the policy, and by April 2014 – one year on – were deemed fully exempt from the bedroom tax at their local tribunal. But the success proved short-lived. Three months later, the Department for Work and Pensions (DWP) had applied to overturn their win.

“We were over the moon and then when the judge said the DWP had decided to challenge it…we just felt deflated. I didn’t know what to do,” Jayson says. “They won’t let it rest.”

“If the DWP overturn the tribunal ruling, we might be liable for the two year backdated bill,” Jayson adds. “It could be £1, 500.”

This sort of looming threat marks the uncertainty the couple have had to live with over the past two years. Charlotte tells me she thinks about what will happen to her if they’re forced to move to a one-bed flat.

“I’m frightened one day I won’t be able to stay in my home simply through not being able to afford to pay the bedroom tax,” she says. “I’m frightened I’ll be forced to go into a nursing home.”

“Charlotte’s been hit so hard,” Jayson adds, “Much worse with being disabled. Worse than me.”

With the DWP challenging their exemption from the policy, they are pinning their hopes on a Supreme Court win. It will be a long wait. Jayson emails a week later to tell me they have been given their court date: “March NEXT YEAR,” he writes.

“The silver lining on the late date I suppose is that we can hold the next government – if there is a different one – to its promises if they’re a more left wing one,” Jayson adds. “We’re happy to have weathered the fight this long… Two years.”

 

***

 

The long fight is familiar to Pamela and Jim Hardy*. Pamela, 43, has Multiple Sclerosis and is full-time carer to her husband, who has both mental and physical health problems, as well as their ten-year-old daughter, Katie. I first spoke to the family back at the start of last year when – with arrears of £400 – they had watched themselves become a stat in the mounting bedroom tax headlines: the one in seven families affected by the policy being handed an eviction notice.

In their struggle to keep their home, Pamela and Jim Hardy exemplified the complex – often senseless – elements disabled social housing tenants hit by the bedroom tax have had to maneuver: a flawed central government decision to bring in the policy and a local council and/or housing association refusing to offer support.

Settled within their three-bed house, the family had been put in the property seven years ago by their housing association as a “medical move”. Despite this and the fact that both Pamela and Jim’s doctors report their individual conditions mean they need to sleep in separate bedrooms, because they’re married – just as the Carmichaels found – the bedroom tax means the extra room is classified as “spare”.

At less than 50 foot square, it is barely a box room, and legal advisers say it’s illegal to call it a bedroom. Medical test units sit squashed against the bed and a small cupboard is full of boxes of stored medication and controlled drugs that need to be kept locked away. With ten-year-old Katie in the house, there’s nowhere else to safely store it all.

The family had applied for a discretionary housing payment to help cover the rent but, after one short-term approval, the council repeatedly turned them down.

“They said we should work, get a lodger, or look for a smaller house,” Jim, 50, tells me when we speak again in the New Year.

It’s this sort of dire understanding of disability that saw their council also repeatedly count both Jim and Pamela’s Disability Living Allowance (DLA) as “income” when assessing the family’s need for a DHP. This contravenes the principle behind DLA: that it is there to meet the additional costs of disability a person may have in terms of care and mobility and as such, by nature, cannot be viewed as “spare money”. Disabled people struggling to pay the rent while needing money for anything from specialist transport to care assistants end up being seen by local councils as comfortable tenants with spare cash.   

Just last week, a disabled couple successfully challenged their council for using this DLA calculation. In what was said to be a landmark High Court judgment, it was ruled that Sandwell Borough Council's decision to count the disability benefit as income when assessing applications from people affected by the bedroom tax for a DHP was unlawful and amounted to a breach of the Equality Act 2010.  

This ruling may be the first step in tackling what has emerged over the past two years as yet another perverse aspect of the bedroom tax: that disabled people – repeatedly pointed to by the coalition as the intended recipients for DHPs – have actually ended up less likely to receive help than non-disabled tenants. It’s resulted in a two-tier bedroom tax on disability. Already penalised for needing an extra room, they are then penalised for receiving disability benefits.  

It was similar senseless action that, at the same time, saw Pamela and Jim issued with a court date for May 2014 – despite receiving no warning an eviction notice was coming (something their legal advisor says breeched the pre-action for eviction of tenants by social housing providers) and their third DHP application still being processed.

Jim tells me that it was only through turning to legal representation that their eviction was eventually stayed.

“Today we luckily still have our home,” he says. “It was disgraceful how they failed to communicate fairly.”

They’ve since made a formal complaint to their housing association. 

“They tried to close it twice,” Jim says. “They just didn’t accept they had done anything wrong. Really frustrating and not right.” 

But avoiding eviction was little more than temporary relief for the family. The reality of shrinking social security – be it housing, unemployment, or disability care or mobility – is that keeping your ahead above water for a few weeks does nothing to stop the risk of drowning. With the bedroom tax continuing to hit each month and the DHP still being refused, Jim tells me the family resorted to using their DLA to pay the rent extra. It meant siphoning the benefit away from what it was awarded for: extra heating, washing loads, and medical supplements.

“[Our disability benefit] is normally used…to make life and our conditions more easy to manage,” Jim says. “Due to the seriousness of the pain with both of our conditions, many days we’re pretty much house bound [so we use extra heating and washing]. Water bottles are a good extra source of direct pain relief… Kettles are on stand by daily. They’re often used day and night.”

“Due to other personal day and evening problems regarding my condition extra washing loads take place per week,” he adds. “Our bills can be costly.”  

Again, with the help of a solicitor – and the threat to the council of a judicial review on the issue – in May 2014 the family was awarded a DHP for the next year, as well as a back-payment.

This month, with the DHP about to run out, the family find themselves back to where they began: once again applying to the local council for help and waiting to see if they will be able to pay the rent.

“It’s all starting again,” Jim says. “At present, it’s feeling a bit daunting. We’ve heard the amounts for DHPs have been reduced. It’s like a dark cloud’s looming nearby.”

 

***

 

The wait is part of the battle. Jay Henderson, 50, had a stroke in 2013 and her ex-partner, Ken, became her full time carer. The deterioration in Jay’s health was brutal. The stroke left her unable to communicate and with severely restricted movement. She now relies on Ken’s help for basic needs, be it washing or dressing, and preparing food. But it was delays in Jay’s disability benefits being awarded – both Personal Independence Payments (PIP) and Employment and Support Allowance (ESA) – that left them at their “wit’s end”.

When I last spoke to Ken back in February 2014, they had been stuck in the benefit backlog for eight months. Despite the fact the assessment period of ESA should last no more than thirteen weeks, Jay had been left for seven months – having to live on the lower “assessment” rate in the meantime. With no other support coming in, the electricity bill was in arrears and the phone – a lifeline if Jay needed to go to the hospital – was due to be cut off. They were existing on charity food parcels from a local food bank.

“We’re working tirelessly to try to improve Jay’s health and getting to the point when she was getting her benefits was [another] enormous struggle,” Ken, 50, says when we talk again a year later. “The struggle wasn’t only financial but also trying to get any response from the DWP and Atos. We kept getting fobbed off, even with different agencies contacting them on Jay’s behalf and us contacting the head of Atos.” 

“The whole process has taken its toll,” he says.

Jay and Ken are one of the many victims of what has developed into a widespread crisis in the disability benefit system. It’s two years this week since PIP began its rollout to replace DLA, the outgoing benefit to cover care and mobility needs, and the process has been characterized by false rejections, backlogs, and year-long delays – with parliament's public spending watchdog dubbing the government's handling of it “nothing short of a fiasco”. Almost 200,000 disabled and chronically ill people are currently stuck in a backlog waiting to be assessed. This is before a national-roll out has even begun (the DWP have been forced to delay that, as well increase predictions for how long people would have to wait for support or even get an assessment). At the same time, ESA backlogs could take as long as 18 months to clear, according to its new private provider. Maximus, who took over the “fitness to work” contract from Atos last month, say it will have to conduct one million assessments this year – a test MPs call crude, simplistic and a “stressful and anxiety-provoking experience”.

This mass “reform” of the system means, like Jay and Ken, many disabled and chronically ill people are having to simultaneously go through both benefit processes – so, with delays in both, all sources of income are taken at once.  

Ken tells me that despite “many phone calls and emails”, it was in contacting their local MP, Christopher Chope, in March 2014 that they finally got somewhere. Within two weeks, PIP paid out and another two weeks, ESA arrived too.

“We have to thank Christopher Chope but what a shame that’s the route we had to take,” Ken says.

This sort of “last ditch” effort is one I hear from many people going through the coalition’s disability “reforms”, whether it’s writing to local MPs – and hoping for a response – or attempting to gain the attention of someone higher up. Jayson Carmichael tells me a television reporter recently challenged David Cameron on his and Charlotte’s case.

“He said he'd look into it and we did get a letter from him. He said that DHPs were available to vulnerable people,” Jayson says. “We know now Cameron won’t change anything.”

Against a backdrop of media reports – and ministerial rhetoric – of the apparent ease of gaining disability benefits, the reality is often a long, desperate attempt for someone in authority to listen.

Jay Henderson has been battling the process without being able to say more than one or two-word sentences. Her lack of movement in her right side means she’s also unable to write. Ken describes it as her knowing “what she wants to say” but struggling “to express it”. When I speak to them, it is Ken that talks – often attempting to get across what Jay wants to express. Without his help, it’s hard to imagine Jay wouldn’t still be left without state support.

“The system still hasn't changed,” Ken says. “The system is seriously broken and if any company was to operate like this they would surely go out of business. No one is accountable. It's immoral.”

“I feel sorry for the people still going through what we went through. The benefit system’s affecting so many vulnerable people, how can it continue? Iain Duncan Smith should be ashamed but instead tries to justify his actions.”

“Is there a real answer to this problem?” he says. “Things seem to be getting worse.”

*Some names have been changed

Frances Ryan is a journalist and political researcher. She writes regularly for the Guardian, New Statesman, and others on disability, feminism, and most areas of equality you throw at her. She has a doctorate in inequality in education. Her website is here.

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

***

In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt