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Autumn Budget 2017 Universal Credit changes: what next for welfare?

What Philip Hammond’s Universal Credit changes mean, and more. 

In his Autumn Budget 2017 speech, Chancellor Philip Hammond promised to “help families to cope with the cost of living”. Many families include recipients of welfare in one form or another, including low-paid working families who receive tax credits or housing benefit.

So what’s in it for them?

Here’s what you need to know about the changes made to Universal Credit, housing benefit and other forms of welfare in the Autumn Budget 2017.

Universal Credit

There are many problems with the new “streamlined” benefit called Universal Credit, which is currently being rolled out across the country. In particular, a six week waiting period before the first payment has led to huge hardship, and rent arrears.

Hammond announced the scrapping of an initial seven day waiting period, meaning that the wait for Universal Credit should be reduced to five weeks from February 2018.

Claimants can also ask for up to a month’s worth of Universal Credit paid in advance. This amounts to an interest-free loan, which the claimant will have to pay back over the next 12 months.

From April 2018, claimants already receiving housing benefit can keep on doing so for two weeks after their Universal Credit claim, which should make it easier to cover the rent in the transition period.

Housing benefit

Hammond promised to increase targeted affordability funding, which will allow certain local authorities to increase housing benefit for tenants rising for private landlords.

This is designed to increase support where rents are least affordable - although it may also have the opposite effect, in that landlords realise they can charge more. 

Pensions

When Hammond became Chancellor there were rumours he might scrap the “triple lock” – the guarantee that the state pension will rise by 2.5 per cent, the rate of inflation, or average earnings, whichever is highest.

This has not happened. In April 2018, the state pension will rise by 3 per cent. There is however, a tinkering with pension and savings credit, an income-related benefit for pensioners. After the adjustment, there will be less reward for savings and more for those on the lowest incomes.

Working-age benefits

Unlike pensions, working-age benefits remain frozen. With prices rising, this means that working-age people will be able to purchase less and less with their payments. 

Hammond had nothing specific to say about other important benefits, including personal independence payments, jobseekers' allowance, or employment and support allowance. In other words, the harsh policies introduced by his predecessor, George Osborne, continue, as Anoosh Chakelian documented back in March, here.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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South Africa’s new dawn: How Jacob Zuma’s misrule was ended

“We are going to look back at the past ten years and think of it as a lost decade.”

On the afternoon of 13 February, as South Africa’s President Jacob Zuma was recalled by his party, the African National Congress (ANC), a popular Johannesburg radio station began receiving calls about a peculiar incident.

A truck had lost its load along the M2 highway and people were scurrying to pick up what they believed to be tiny nuggets of unprocessed gold. The highway became congested as motorists pulled over to join the search. Even for a city that rose from the dust of a gold rush, this was a bizarre scene.

The first radio caller was giddy with excitement, as was the second. The third did what South Africans do best: he made light of an otherwise confusing and anxious day in the young nation’s history. “It’s manna from heaven,” the caller said. “Zuma’s just been recalled and already the roads are paved in gold.” Nine years into the president’s disastrous rule, South Africans had not lost their sense of humour – and were awaiting a new dawn. The police cleared the scene along the M2, no one proclaimed a worthy find and the nation returned to waiting for Zuma’s next move.

Technically, the president did not have to resign as head of state, despite the opposition of the ANC, the proud liberation movement turned ruling party that Zuma led for a decade until December 2017. Realistically, he had no options left.

With an overwhelming majority in parliament, the ANC was ready to table a motion of no confidence the next day. Defiant to the end, these final hours on the eve of Valentine’s Day were Zuma’s last stand.

They called him the “unstoppable tsunami” and with good reason. Zuma damaged South Africa and the ANC in ways only history will fully capture. He wrecked a country struggling to rebuild itself under the shadow of apartheid. Under his rule, the economy stagnated, unemployment rose, poverty grew, violent crime spiked and corruption became endemic.

“South Africa was headed in the wrong direction,” says Mmusi Maimane, leader of the Democratic Alliance, the official opposition, which governs in cities including Johannesburg and Cape Town. “We are going to look back at the past ten years and think of it as a lost decade,” the political analyst Stephen Grootes concludes.

Zuma lurched from one scandal to the next. He was acquitted of rape, avoided almost 800 corruption charges for over a decade and nearly crashed the economy by recklessly firing a respected finance minister. Taxpayers were misled over exorbitant upgrades to his private mansion (a swimming pool was defended as a fire-fighting feature) and his friendship with the controversial Gupta family placed him at the heart of what became known as “state capture”: the looting of state coffers through the corruption of senior government officials.

“State and independent institutions were repurposed for the enrichment and protection of Jacob Zuma,” says political commentator Justice Malala. “He went through the guts of the framework, pulled out the institutions he needed and systematically broke them down or took away their independence.”

The institutions ranged from the tax revenue service to the public broadcaster, from the police to the prosecuting authority, and from the intelligence services to crucial industries such as mining.

Although constitutionally barred from governing beyond 2019, Zuma was widely believed to have engineered a plan to hold on to power (and avoid prosecution) through his ex-wife, Nkosazana Dlamini-Zuma, who was campaigning to take over from him. By December, when the ANC met to pick its next leader, who would go on to become the country’s president in 2019, a mood of despair and hopelessness had set in.

The race was close. In the end, 179 votes out of nearly 5,000 cast separated Dlamini-Zuma from her challenger, Cyril Ramaphosa, a former union leader and businessman who had campaigned on an anti-corruption and pro-growth platform.

Ramaphosa’s victory in mid-December was a turning point. It removed the prospect of Zuma’s continued rule, began an instant shift in political power and sparked a moment of renewed hope. Ramaphosa had his own controversies, but was viewed as largely incorruptible. He had risen through the trade unions, served the ANC and built his wealth in the private sector. 

Following Ramaphosa’s election, the extent of state capture emerged through superb investigative journalism.

Politically driven prosecutions fell away, a hugely unpopular nuclear energy deal with Russia was frozen and, as Zuma was being recalled, police cars arrived outside the home of the Gupta family.

And yet, the president refused to leave the Union Buildings quietly, prompting comparisons with Margaret Thatcher. “He was the worst possible combination of ignorance, selfishness and incompetence that could have been inflicted upon the long-suffering people of South Africa,” read an editorial in the Daily Maverick on 13 February. “Now, stripped to the bare essence of being Zuma, the final image emerges, one of the selfish man who cared only for himself.”

Journalist Richard Poplak concluded: “What is born in chaos dies in chaos.”

 Zuma’s departure allows for the rebuilding to begin. The role played by the media, civil society – which found its voice during the Zuma years – and the judiciary (particularly the constitutional court) is being recognised. New president Ramaphosa delivered an inspiring state of the nation address the day after being sworn in.

“You can survive bad leadership, but what you won’t survive is bad institutions,” Mmusi Maimane told me.

There are no delusions over the epic challenges ahead. Unemployment is at 27 per cent (and is much higher for young, black South Africans) and GDP growth is stranded at 1 per cent. However, there is optimism, too: the “lost decade” is over and the Rainbow Nation’s renewal has finally begun. 

This article first appeared in the 22 February 2018 issue of the New Statesman, Sunni vs Shia