Backlash brewing. Let’s give it a stir.


The John McDonnell Column

JMcDOsborne is widely believed to be keeping his promise to include in his Autumn Pre- Budget Statement an announcement of a further round of £10 billion worth of cuts in welfare spending.

Don’t think that this is just another panic measure in the face of a prospective triple dip recession by January. No, this is a much more considered long term plan that, we can see from the evidence available, has been discussed at least since the mid -1990s by right wing Tory policy wonks like Osborne.

In May 1997 the right wing think tank, the Social Market Foundation, published a booklet by Robert Skidelsky entitled Beyond the Welfare State. It was the month that Labour was elected, replacing the Major Government after 18 years of Conservative Party rule. The booklet gave a taste of the thinking on the political right that would have helped set the agenda for the late 1990s and early 2000s if the Tories had been re-elected. It depicts exactly the approach the Tories are taking now that they are back in government.

Skidelsky wrote, “my argument is that the Welfare State is a tax on efficiency, liberty and morality. It has slowed down the growth of wealth. It has created permanent budget deficits. It has diminished liberty. And it has set up a conflict between behaving rationally and behaving well. And in so far as it makes the working poor support the idle, it is highly inequitable.”

He went on to set out his proposals for what he described as, ‘a logical modern system of social protection.’ This would have three tiers.

First, a basic tax financed safety net for people who cannot contribute to insurance. This would be provided by local voluntary organisations through what he describes as matching philanthropic finance. In other words, local charities doling out very low basic benefits, matched by charitable donations for the poor.

The second element was to be low compulsory insurance, which he suggested would be the equivalent of third party car insurance to cover retirement, sickness, disability and unemployment. This insurance was likely to be bought in the private sector. The third tier was any additional voluntary insurance.

He then proposed, “education and health could be privatised, while workfare schemes directly attack the problem of state-financed idleness.” This edifice is slowly but surely being put in place.

The Housing Benefit cap, the shift from RPI to CPI, the bedroom tax, and the overall cap on benefits are resulting in the basic safety net becoming so low that child poverty is predicted to rise significantly. Survival for many families is already only ensured by the charitable giving of food parcels by local food banks.

Workfare is now creating a reserve army of unemployed who are on forced unpaid labour. Refusal to accept unpaid work is met with sanctions, ranging from loss of benefit from two weeks to six months. The numbers sanctioned has risen from 139,000 to 508,000 in two years.

The precariousness of many families is starkly illustrated by a recent HSBC survey which exposed that, “a third of UK homes have less than £250 set aside for an emergency and are therefore at risk of destitution should redundancy strike.” This is the result of what the Resolution Foundation revealed has happened to average incomes. Average incomes have stagnated for 12 years and are not likely to improve for another eight.

Insurance is not an option for most and so payday loans and debt have filled the gap. The result is the number of liability orders for debt is predicted to double from two million to four million over the next year. If this period is symbolised by anything it is the rise of the bailiff. The Citizens Advice Bureau reports that it is dealing with over 24,000 cases of people having problems with bailiffs.

To top it all, the Coalition is bringing back its own form of the Poll Tax. The administration of Council Tax Benefit is being transferred to the control of local councils along with a 10% cut in expenditure. Most councils are making up for this cut by making everyone pay some Council Tax whether they are on benefits and can afford to pay or not. Even Patrick Jenkin, the Tory who invented the disastrous Poll Tax of the 1990s, has described this as ‘Poll Tax, mark 2’ and warned of a backlash.

The various direct action campaigns that the LRC supports are feeding that anger and demonstrating to people that they can be a part of the process to expose and confront these planned attacks on the Welfare State. Disabled People Against Cuts, Black Triangle, Boycott Workfare, the Right to Work Campaign, the Fuel Poverty Action Group, the Right to Protest, UK Uncut and the National Pensioners Convention have all shown the way to harness direct action for a specific purpose.

The backlash is certainly brewing; the LRC annual conference agreed our role is to give it a stir.

John McDonnell is MP for Hayes and Harlington and Chair of the Socialist Campaign Group of Labour MPs and the Labour Representation Committee.

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