The Staggers

The New Statesman’s rolling politics blog

The twisted logic of making the poor poorer

Ministers seem genuinely to believe that fear and stress are the keys to lifting people out of poverty.

By Sarah Ditum Published 23 November 2012 22:41

The benefits 'lifestyle' is holding people back, says the architect of government welfare reforms. Source: Getty Images

Lord Freud thinks we have a “dreadful welfare system”. No surprise there – the peer has been trying to tinker with, pull apart and generally undermine the benefits system since the partially-implemented 2007 Freud Report – but this time, he’s getting his way with the introduction of Universal Credit. Freud’s answer to the problem of those who don’t have enough is in reach, and it’s a counterintuitive one: what those who already have little need is … even less.

Sound confusing? I’ll let Freud explain in his own words to House magazine: “We have, through our welfare system, created a system which has made [people who are poorer] reluctant to take risks.” Single parents, those with disabilities, the long-term sick – according to Freud, you’ve all just got too comfortable in the “lifestyle” that welfare has afforded you. But lucky for you, Freud’s going to help you hit rock bottom so you can bounce right back up again.

Thanks to Freud’s comments, the incoherence of Universal Credit starts to look like some sort of plan. Over the last few weeks, organisations including the Chartered Institute of Housing and the Joseph Rowntree foundation have issued warnings about what they politely suggest might be the unintended consequences of Universal Credit.

According to the CIH, Universal Credit will leave 400,000 of the UK’s poorest worse off in 2015 than they were in 2010. Families with a weekly household income of £247 will have less; lone parents, whatever their income, lose out.

Meanwhile, the JRF points out that small financial gains will be wiped out by transport and childcare costs under UC, and the withdrawal of benefits such as free school meals and free prescriptions creates a “cliff edge” – incomes will simply drop off once they pass a certain point. And all that assumes the system even works, which seems optimistic given the disaster that accompanied the roll out of Working and Family Tax Credits. With no clear plans for stand-by arrangements in case of failure, the JRF warns that recipients will be forced to start their UC claims in debt.

One might suspect that this financial hammering of those least able to take it is a clerical error, the sort of terrible disaster inflicted by careless meddling in a complex system. But Freud makes it sound as if this is exactly what he planned in the first place. The more stretched your resources, the more Freud sees a moral imperative to thin them down still further until, with nothing left to lose, you might as well risk it all.

It’s hard to imagine what kind of “risks” Freud imagines a household with less than £247 a week should take. Moving away from established support networks of families, school, friends and social workers to live wherever the council decides you can be cheaply shuffled is one risk. Moving back in with a violent ex because you can’t sustain your children alone? That’s another risk Universal Credit will force people into making. Sofa-surfing, shoplifting, streetwalking: all these are the kind of risks open to a person with nothing to rely on. Risk taking (the positive, speculate-to-accumulate kind that Freud wants you to think of when he says “risk”) is something you do when you have a surplus.

If you have barely enough, of course you live cautiously - not because your luxurious £247 a week has pampered your capitalist instincts into submission, but because if any chunk of that £247 goes to the wrong place or fails to arrive one week, you and your family go under. It’s almost as if Freud doesn’t understand the economics of risk at all; and given that he previously worked in the City, making him an industrial affiliate of those bankers whose desperate miscalculation of risk helped to demolish the world economy, it’s entirely plausible that he really doesn’t.

But there’s at least one person who won’t be risking anything under Universal Credit: Lord Freud. He promises that he’s been listening to feedback, taking advice, keeping himself covered. “I don’t skinny dip, I always have my trunks on,” he promises, summoning a hideous image of him diving into a pool full of benefit claimants and rubbing his Speedo area all over them. You can be certain that many of the worst off will do worse still under Freud’s Universal Credit: they’re the ones being left to take their chances.

Tags: Welfare Iain Duncan Smith Universal Credit unemployment

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33 comments

Wed, 2012-11-28 18:21 — New statesmancherie (not verified)

appalling state of affairs when we are continually being bombarded by less intelligent individuals who only hold thier position due to the families money..
only dumbos get into private school because the school knows that they can pay so make the entrance exame simple...what would happen if all got the level playing field ...yep ...not so many of the rich folks would get in would they?? isnt that why they really abolished the grammer school sysytem it became too much of an embarrasment for the rich folks to have thick kids!! why is it that anyone with money gets to dictate the staus quo? TO THICKO FREUD...you are not kiddin anyone......your views are based on stupid thick and lacking in foresight ideaology
exactly where would you be without your heritige?????

Tue, 2012-11-27 23:09 — Rosemarie Harris (not verified)

Like most people with little real power they have nothing to say or contribute to the world they don't have the brains to make a "better Difference" . Freud was born into money and the best he could attain was a banker hardly a thinking man is he?
He will do and say what he thinks is intelligence by his standards. He knows nothing of any merit all he has is money and without money he is a nobody. We are better than him because whatever he does or says we will be here yes poorer but still here and hopefully with our morals intact.We need to help each other out and lets start now.

Sun, 2012-11-25 23:17 — Tish72 (not verified)

If Freud really believes that having nothing encourages self reliance and risk taking then why is he subsidising his daughter Emily by paying her rent while she spends her time hanging around rock clubs trying to get off with bands?

Sun, 2012-11-25 20:08 — Tweedlesmart (not verified)

Better that we die, and decrease the surplus population.

Mon, 2012-11-26 00:47 — Incredulous (not verified)

A homeless person died in the floods in Exeter, she was 21 and sleeping in a tent near the city centre. Is this the kind of risk taking Freud means?

Sun, 2012-11-25 18:01 — ely.m.f (not verified)

Sounds like Mr Freud has been reading too much Beck and Sennet.

Sun, 2012-11-25 18:01 — ely.m.f (not verified)

Sounds like Mr Freud has been reading too much Beck and Sennet.

Sun, 2012-11-25 15:59 — Fraziel1

What was your redundancy package Tilly? Working for the NHS for thirty years you must have got a decent pay off.

Sun, 2012-11-25 16:50 — kenelmist (not verified)

Sorry, you really are a plonker. That is not redundancy.

Sun, 2012-11-25 15:06 — Tilly (not verified)

I worked for almost 30 years in Health and Social Care for Local Government,Local Authorities and the NHS. I worked hard, paid my taxes and my NI. I became ill, was found to have an incurable, progressive condition, the NHS terminated my contract of employment on the grounds of ill health and I have been unable to work. I have had to fight for almost a year to get sickness benefits. My reward for all those years work, paying my taxes and NI? Poverty.

Sun, 2012-11-25 14:49 — Zold (not verified)

of course, the most profitable risk one can take when one is desperate, which requires no outlay, high rewards, can be done in any location, with skills can be learned within a community setting, is of course crime such as burglary & theft. best build those super-prisons & draft in a load more judges & magistrates & prison guards. job creation. bonzer.

Sun, 2012-11-25 06:31 — Groc (not verified)

Freud as an ex-banker is a fine one to talk about risk. Being as it was bankers in the US, Europe and the UK taking dangerous risks then losing massively and then expecting respective Govts. to cover all those losses for them and then pay for it with on-going never-ending increasingly brutal austerity measures. On that alone we should realise he's quite, quite deluded - he certainly shouldn't be in a position of power.

Sun, 2012-11-25 06:30 — Groc (not verified)

Sun, 2012-11-25 06:29 — Groc (not verified)

Sat, 2012-11-24 23:42 — Mr Bingham (not verified)

Even Adolf Hitler was more compassionate to his own countryman !

Sat, 2012-11-24 21:53 — Hugh C Markey (not verified)

Nowadays it is impossible to throw the undeserving poor[ anyone on benefit not tax irregulars] to the lions or consign them to a dungeon and the tender mercies of an underclass torturer and executioner. These days even flogging and hanging are no-nos.
However, social sadism is a pervasion anyone can get away with. It seems a lot of right-wing moralists get their jollies in the most ordinary way. Gender doesn't come into it.
The Tories and others are shivering in anticipation. By G**, those widows and orphans are ruining the country.
The sadist always excuses his perversion by claiming that the victim quite likes it.

Deference

Mon, 2012-11-26 10:34 — miss julia blake (not verified)

Well said indeed, Hugh..I do believe you have hit the nail on the proverbial head of the projecting sick and needy, who sanctimoniously disguise themselves as saviours to the poor souls of this work hard and you'll be saved ethic!!

I guess it could blow Mr Freud's mind to think there are individuals who'd rather not suck on his dictatorship thank you very much, and live a valued life if only the greedy profit hounds were shackled and made to share that which has been extradited (in a socially conscious mindset) from the genuine hard workers, single parents included...bloody handed exploitation in more realistic words.

Sat, 2012-11-24 21:53 — Hugh C Markey (not verified)

Deference

Sat, 2012-11-24 20:51 — mrss (not verified)

I have a mentally disabled son and a sick husband. I am a qualified early years practitioner and eay years teaching assistant abd cant find a job that will keep my family. We struggle yet have no choice at the moment!!

Sat, 2012-11-24 19:13 — Fraziel1

Of course lets not forget that families with kids and receiving housing benefit are not poor, they are doing perfectly well under the current system and indeed some of them extremely well. It makes me laugh though listening and reading about the left going on about the poor. These well off liberals in their ivory towers of middle class affluence could not give a shit about the poor. If they did they would not support mass immigration as it lowers wages and crowds an already difficult jobs market for the unskilled made up mainly of the working class. All so they are not seen as racist. The last labour government was also the worst employer of civil servants in history with below inflation pay rises during boom times for a section of the workforce that have tens of thousands on poverty wages.

Sat, 2012-11-24 22:24 — Mr Bingham (not verified)

And now thousands of civil servants are losing their jobs under this Tory Led Coalition !

More people to be labelled as Scroungers, parasites along with all the other discriminatory comments.

Sat, 2012-11-24 20:11 — kenelmist (not verified)

You have personal issues. I did note appreciate you advocating BNP MPs - the statement still archived on NS.

Sat, 2012-11-24 20:15 — kenelmist (not verified)

Typo: I did NOT appreciate ...

Sat, 2012-11-24 16:54 — Rikki Baldwin (not verified)

I live by using the current benefits system. This new universal credit would absolutely destroy me, my fiancee and my 10 month old baby. The twats in parliament and the house of lords need to step out if their money shrouded bubble and look at the real world, live in our shoes, before deciding to change the established system.

Sat, 2012-11-24 15:19 — kenelmist (not verified)

I have seen IDS at close quarters, and he is inept. I would not give him a job. Even the Tories realised his dismal performance. But his constituents would vote for a donkey, with a blue rosette.

Sat, 2012-11-24 14:08 — Benjamin Rae (not verified)

People should remember that very few have got their snouts in the trough of the public purse any more than IDS or Freud. They are hypocrites on top of everything else

Sat, 2012-11-24 13:45 — Mary Bolton (not verified)

A Jacobin basket full of Tory heads. Democracy of the people rather than oligarchy of the market utopians. That's the only 'risk' I see worth taking here. And if it really does lapse into a reign of terror, at least we will have determined our own fate rather than live in grovelling servitude to these disgusting, noxious patricians. Better an obscure disaster than the ongoing drip-feed of rhetorical austerity, crisis and the never-ending economic immiseration of the people in the name of 'incentivisation'. Plebs of all stripes unite! Let's roll the dice! Who's with me?

Sat, 2012-11-24 12:34 — Natacha (not verified)

If there are seven jobseekers for every job vacancy, how on Earth is Freud's impoverishment policy going to get them into jobs which simply do not exist?

Sat, 2012-11-24 12:29 — Dark Heart of Toryland (not verified)

You will notice that people of Lord Freud's class do the utmost to make sure that risk to themselves is reduced to the absolute minimum. If Lord Freud were sacked tomorrow, his contract doubtless ensures that have to be paid off with at least a year's bloated wages, pension rights, etc. This is surely an egregious benefit dependency culture; why does Freud not address the debilitating dependency culture of the rich?
It is utterly abhorrent for this wealthy, over-privileged fat-cat to lecture the poor about risk.

Sat, 2012-11-24 11:21 — Clarion (not verified)

B***** the rich!

Sat, 2012-11-24 11:08 — Barrie J (not verified)

If a poor person takes a risk with what capital they may have, beg or borrow - and fail, they are wiped out.
If a rich person or their children take a risk and fail - no problem, there's plenty more where that came from.
I wouldn't expect any politician in Westminster to understand this.
The former walks the tightrope with no safety net, the latter has net, safety wire, private funding, healthcare, etc.
Why would a Tory Lord care, he didn't when he advised Blair?

Sat, 2012-11-24 10:45 — mike cobley (not verified)

There are few sights as obscene as a rich Tory lord lecturing the poor on their profligate, extravagant ways.

Sun, 2012-11-25 10:02 — gary170459 (not verified)

Sadly, this has always been so. And just as sadly, not enough working class people have ever cared. And even more sadly, none of the comments on this website or the millions of similar points of views on the internet generally will make any difference to the continuing excess of capitalists wallowing in the system they control.