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.

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.