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.

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.

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

Sarah Ditum is a journalist who writes regularly for the Guardian, New Statesman and others. Her website is here.

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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.