Comprehensive Spending Review: Seven days is a long time in poverty

It is entirely appropriate that I have waited seven days before posting a blog on the Comprehensive Spending Review. As part of the increasingly “tough” rhetoric about welfare the main story from the review was a seven-day wait until you can apply for benefits.

As the chancellor put it: “And we’re going to introduce a new seven day wait before people can claim benefits. Those first few days should be spent looking for work, not looking to sign on.”

The implication is that unemployed people need to be threatened into looking for a job immediately after being made redundant. What it took some time to come to light, and what was not announced in the speech, was that benefits would not be delayed for seven days, but rather not paid at all for a seven-day period. This will take an estimated £¼ billion a year from the unemployed.

The dispiriting thing about listening to the review was that every crafted phrase played into the myth of the lazy unemployed person who needs to be intimidated into getting off their backside and going to work. People do not need to be forced and threatened into looking for work. The Department for Work and Pensions and many others have strong evidence that people delay claiming benefits as long as possible, that people start their job search quickly, and they tend only to apply for benefit quickly when they have few financial reserves to fall back on. The data is clear but it doesn’t fit the “tough rhetoric” so it is ignored, and the poorest are misrepresented again.

The actual effect of this policy is to exquisitely target the poorest low paid workers – strivers if you buy-into that unpleasant narrative. You may be surprised that such a small measure with take away so much money – £¼ billion – from the poorest: the reason is the “low-pay no-pay cycle”.

Huge numbers of people go into low paid insecure jobs each year – and huge numbers of people lose those jobs – often many times in a year. It is these people who will lose a week’s benefits every time they transition into and out of work. It is those people who are living hand to mouth trying to stay in work and will find it hugely difficult to save a week’s wages in order to be able to get through their next churn round this nasty cycle. Poverty campaigners are appalled; Wonga should be rubbing its hands together and preparing some more of its characteristic small loans charged at 5853% APR. ^[1]5853% was the actual rate advertised on the Wonga frontpage 08/09/2013. There is no decimal point.

It is important to note that although only unemployed people were mentioned, when Universal Credit is introduced people seeking help with high rent, disability, sickness or their children’s needs will also have to wait a week.

Although the chancellor said, “We’re doing these things because we know they help people stay off benefits and help those on benefits get back into work faster.” As usual what the minsters “know” about benefit claimants, and what they have evidence to support, bear no relation to each other.