Iain Duncan Smith. Secretary of State for Welfare Pensions. Still. Photo: Getty Images
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What would real welfare reform look like?

Britain's welfare bill can be reduced without eliminating the safety net - but not with a series of crude caps or freezes, explains Spencer Thompson.

Today’s public finance statistics show progress towards reducing the deficit. Net borrowing has fallen by almost a quarter on a year ago, partly driven by better than expected income tax figures. But the Chancellor of the Exchequer will not be able to reach his fiscal targets with a few months of above-average receipts. Indeed, outside of its claim that £5bn can be raised from tax avoidance, the government’s so-called ‘tax lock’ will largely prevent him from using tax levers to close the deficit. Instead, he is going to have to cut deep into public services and the welfare bill in order to come up with the required savings. The upcoming budget and subsequent spending review, where we will get more detail on his plans, are where the real business of deficit reduction will happen.

The centre-piece of the Chancellor’s fiscal strategy is an aim to cut a sizable chunk (£12bn) off the welfare bill by 2017/18. The options floated so far, of a freeze in the value of working-age benefits, a reduction in the benefit cap and the withdrawal of housing benefit from 18-21 year-olds, are likely to save only a little over £1bn. That leaves more than £10bn of welfare reductions unaccounted for. Even if the chancellor were able to reduce this figure by arguing that low inflation has reduced the need for cuts, this may also impact on the OBR’s receipts forecasts, meaning they are still going to need huge savings.

The UK currently spends around £220bn on welfare. Just less than half goes towards pensioners and child benefit, both declared off-limits by the government. This means that the cuts will need to make significant in-roads into the remaining £113bn, of which the largest items by far are tax credits (£30bn), housing benefit (£26bn), disability benefits (£22bn) and incapacity benefits (£15bn). Some combination of cuts to these benefits will be required if the government are to achieve their £12bn target. Focusing exclusively on out of work benefits wont cut it – we currently spend just £5bn a year on jobseeker’s allowance and income support, the two key working-age benefits for those not in a job.

The IFS have taken a look at some of the specific choices the government could make to these benefits to generate savings; the government could require housing benefit claimants to contribute 10 per cent of private sector rents (a saving of £0.9bn), or they could abolish housing benefit for all 18-25 year-olds (saving £1.5bn). If they started to tax the key disability benefit (formerly Disability Living Allowance, now the Personal Independence Payment), they could raise £0.9bn. More sweeping changes could generate larger savings; if they reduced the basic amount of child tax credit families can claim to its 2003/04 levels (in real terms), they could save £5bn.

If these options sound harsh, that’s because they are. Every pound saved will be a pound in lost income for an eligible family, with predictable consequences for living standards and child poverty. While these options may be presented as generating incentives for families to move into work, remember that around 80 per cent of benefits outside pensions go to families in work, meaning that cuts are likely to hit the working poor. But it is changes of the kind listed above that the DWP and Treasury will currently be looking at in their search to identify savings. If, as has been rumoured this week, they are exploring a further £3bn of welfare cuts on top of the £12bn already mooted, the impact will be even more severe.

IPPR has argued consistently that the working-age welfare bill can be sensibly controlled, but not by a crude process of freezing or cutting entitlements. This does nothing to combat the economic and demographic forces acting to increase demands on the welfare system; rising rents increase the need for housing benefit to paper over the cracks in our broken housing market, endemic low pay inflates the tax credit bill, and the need for both parents to work in order to reach a decent standard of living puts upward pressure on the price of childcare to meet caring needs. There are more examples, but the overall picture is of a system that does little to tackle the underlying causes of welfare receipt.

Instead what are needed are very difficult choices about where public funds are best spent. Rather than lining the pockets of landlords through housing benefit, we should be unlocking those same funds to invest in social housing. Similarly, instead of topping up the pay of working parents so they can afford extortionate childcare fees, we should recognise the need for more hours of cheap or free childcare at all ages. Across a range of policy issues, we throw good money after bad instead of investing in more sustainable solutions for the long-term.

Realising these opportunities to switch money from cash welfare into services and investment requires some long-term leadership and vision from policymakers. The upcoming spending round represents a perfect opportunity to be thinking of creative solutions to reduce the welfare bill in a way that is both fair and sustainable. But the overwhelming focus on cutting to meet a self-imposed target of a balanced budget by 2017-18 is likely to take precedence over genuine reform.

Spencer Thompson is economic analyst at IPPR

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On World Aids Day, let’s end the stigma around HIV for good

Advances in treatment mean that being HIV positive is no longer a death sentence, but attitudes still lag behind.

Stigma is a dangerous human construct, principally based on unfounded prejudices. None more so than the stigma surrounding HIV. The condition has been a recognised health issue in the UK for more than 30 years, and the advances in treatment have been staggering. Unfortunately attitudes seem to have remained in the 1980s.

A recent Terrence Higgins Trust poll asked people who are living with HIV for words that they have heard to describe their health condition. “AIDS”, “riddled”, “dirty”, “disgusting”, “promiscuous”, “dirty”, “deserved”, “unclean”, “diseased” – were the most cited.

Imagine turning to someone, who lets say has a long term health condition like high blood pressure, and branding them “lazy”, “fat”, “deserving”. Or someone who has just been diagnosed with diabetes being dismissed as “greed”. Of course, I’m not saying that these health conditions are without their own stigma. Rather I doubt that Charlie Sheen would have been subjected to such a vitriolic witch hunt, had it transpired he had either of those.

Once the nausea of that coverage subsided, it was telling to note the absent voices from most of the media debate around HIV and stigma. The thing that struck most was the total lack of understanding of the condition, the treatment, and the lack of representation of those who are living with HIV.

There was little written about the stigma women living with HIV face. That which those within the black African community, or the trans community, or the over 50s – the first generation of people living into old age with HIV – are subjected to.

Such is the stigma and the shame of HIV in black African communities that it can divide families. HIV positive people can be asked to leave home, resulting in separation from their family and isolation from their community. We know of a woman from the black African community who felt so stigmatised for not breastfeeding her baby – due to her HIV treatment – that she stopped her drug regime. She died unnecessarily of an Aids-related illness. After her death, her medication was found in the attic.

While living with HIV can be stressful for all ages, ageing with HIV can introduce challenges to mental health and quality of life. When compared to their peers, older people living with HIV are disadvantaged in a wide range of ways – from poorer health, to social care and financial security. We’ve found that older people fear that social care services will be prejudiced about their HIV diagnosis. One man shared that he feared hugely going into a home – the attitudes towards HIV that he might find, and ignorance from the staff. This fear is rooted in many people’s historic and continued experience of HIV-related discrimination.  

Often considered to be a lower risk group than gay men, women are sometimes forgotten in HIV discourse and yet women are stigmatised as much as any other with HIV. Women living with the condition face a unique stigma. Some are mothers and have been accused of being “irresponsible” and “putting children at risk”.

For the record, taking antiretroviral medication (ART) lowers the amount of virus in your blood to “undetectable” levels. When the level of HIV in your blood is so low that it can’t be picked-up in tests it is undetectable. This means there is an extremely low risk of passing on HIV.

Because of ART, undetectable women have a very low risk of passing on HIV to their babies. New-borns are given their own short course of ART to further reduce their risk of developing HIV, and undergo a series of tests during the first 18 months of life.

Many transgender people are on a difficult gender journey, which includes lots of access to GPs for onward referrals to specialists, and still they worry about HIV stigma. Some deny their HIV status in settings where possible, as they look at it as a barrier to achieving their goal. Gender specialist clinics are embedded in mental health departments, and some positive trans people worry that the stigma of diagnosis might be seen as an indicator of promiscuity, which they feel might work against their cases.

And what of stigma in the gay community? The poll mentioned earlier found that of 410 gay men living with HIV, 77 per cent experience stigma – with more than two thirds experiencing this most from within the gay community.

Those gay men who take the plunge and live openly with their status are often heckled, and sent abuse on dating apps like Grindr, even receiving messages that they shouldn’t be using it because “they’ll infect others”. It’s all too easy in the digital age for stigma to persist, and ignorance to remain faceless.

Stigma is best countered with fact. But there’s a clear lack of education amongst many – both positive and negative. Growing up with sex and relationship education lessons that only teach the reproduction cycle is not enough. Young people should be given clear and detailed information about the risks of HIV, but also how living with HIV in the UK has changed, and it is now an entirely manageable health condition.

Officially, stigma is defined as a mark of disgrace associated with a particular circumstance, quality, or person. Let’s turn that around today, and use the red ribbon to stop stigma. Let’s use it a mark of solidarity, compassion and understanding.

Let’s start a conversation about how we speak and write about HIV. Let’s stand together, today of all days against HIV stigma. Start now – join the solidarity on social media by taking a selfie with your red ribbon and #StopStigma.