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
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There's just one future for the left: Jeremy Corbyn

Labour's new leader is redefining Labour for the 21st century, argues Liam Young. 

The politics of the resurgent left comes down to one simple maxim: people are sick and tired of establishment politics. When one makes this statement it is usually met with some form of disapproval. But it is important to realise that there are two different types of people that you have this conversation with.

First there are the people I surround myself with in a professional environment: political types. Then there are the people I surround myself with socially: normal people.

Unsurprisingly the second category is larger than the first and it is also more important. We may sit on high horses on Twitter or Facebook and across a multitude of different media outlets saying what we think and how important what we think is, but in reality few outside of the bubble could care less.

People who support Jeremy Corbyn share articles that support Jeremy Corbyn - such as my own. People who want to discredit Jeremy Corbyn share articles that discredit Jeremy Corbyn - like none of my own. It is entirely unsurprising right? But outside of this bubble rests the future of the left. Normal people who talk about politics for perhaps five minutes a day are the people we need to be talking to, and I genuinely believe that Labour is starting to do just that.

People know that our economy is rigged and it is not just the "croissant eating London cosmopolitans" who know this. It is the self-employed tradesman who has zero protection should he have to take time off work if he becomes ill. It is the small business owner who sees multi-national corporations get away with paying a tiny fraction of the tax he or she has to pay. And yes, it is the single mother on benefits who is lambasted in the street without any consideration for the reasons she is in the position she is in. And it is the refugee being forced to work for less than the minimum wage by an exploitative employer who keeps them in line with the fear of deportation. 

The odds are stacked against all normal people, whether on a zero hours contract or working sixty hours a week. Labour has to make the argument from the left that is inclusive of all. It certainly isn’t an easy task. But we start by acknowledging the fact that most people do not want to talk left or right – most people do not even know what this actually means. Real people want to talk about values and principles: they want to see a vision for the future that works for them and their family. People do not want to talk about the politics that we have established today. They do not want personality politics, sharp suits or revelations on the front of newspapers. This may excite the bubble but people with busy lives outside of politics are thoroughly turned off by it. They want solid policy recommendations that they believe will make their lives better.

People have had enough of the same old, of the system working against them and then being told that it is within their interest to simply go along with it.  It is our human nature to seek to improve, to develop. At the last election Labour failed to offer a vision of future to the electorate and there was no blueprint that helped people to understand what they could achieve under a Labour government. In the states, Bernie Sanders is right to say that we need a political revolution. Here at home we've certainly had a small one of our own, embodying the disenchantment with our established political discourse. The same-old will win us nothing and that is why I am firmly behind Jeremy Corbyn’s vision of a new politics – the future of the left rests within it. 

Liam Young is a commentator for the IndependentNew Statesman, Mirror and others.