Using Myths about Poverty to Defend the Welfare Benefits Up-Rating Bill

The Welfare Benefits Up-Rating Bill, currently going through Parliament, risks driving 200,000 more children into poverty. Churches have called for benefits which specifically help children to not be cut. For this reason Churches and church leaders, including the Archbishop of Canterbury, have asked the Government to reconsider and exempt the benefits targeted at children.

The Government response to these challenges has been aggressive but failed to address the substantive points or the underlying issues. More troublingly the response is grounded not in robust evidence but in the popular myths about those in poverty and receipt of benefits.

The quotes below are taken from an interview by Rt Hon Iain Duncan Smith, Secretary of State for Work and Pensions, in an interview on ITV on Sunday 10th March.^[1]As reported http://www.itv.com/news/story/2013-03-09/archbishop-of-canterbury-condemns-government-on-benefit-changes/ and … Continue reading

A false divide between those in work and those on benefits

 “This is about fairness. People who are paying taxes, working very hard, have hardly seen any increases in their salary and yet, under the last government, the welfare bill rose by some 60 per cent to £200 billion. That means they have to pay for that under their taxes, which is simply not fair. “

The rhetoric used creates a politically convenient, socially destructive and demonstrably false divide between “hard working families” whose taxes pay for benefits and “the welfare dependant” who do not work or pay taxes.

The majority of children in poverty are in working families. The majority of working age families in poverty work. The majority of people whose benefits will be cut by the Welfare Benefits Up-Rating Bill are in working families.

In the UK living in poverty goes hand in hand with doing paid work. Needing benefit payments to get by goes hand in hand with doing paid work. People in poverty including those whose incomes are topped up by benefits pay taxes at a higher rate than the richest in society; they are taxpayers too. ^[2] http://www.ons.gov.uk/ons/rel/household-income/the-effects-of-taxes-and-benefits-on-household-income/2010-11/etb–table3-sb.xls Most recent Govt Data: poorest pay 38.2% of their income in taxes … Continue reading

Obscuring these facts will not make them go away. This false distinction between “hard working families” and those in poverty has been at the heart of repeated statements around welfare and should be challenged at every opportunity.

A laudable aspiration undermined

“Getting people back to work is the way to end child poverty. That’s the moral and fair way to do it.’

This is another false premise – that children experiencing child poverty are in workless families. The majority of them are in fact in working families.

It is a welcome aspiration that work should be a route out of poverty, but cutting in-work benefits – which the Welfare Benefits Up-Rating Bill intends to do – makes this aspiration harder to attain. Welfare policy is not the only tool available to relieve in-work poverty; encouraging or enforcing better pay for those at the low end of the labour market would also be effective, but the only policy proposed currently is to reduce the financial support available to low-paid working families.

With the current levels of wages and government support, work is a route out of poverty only around half of the time. From the DWP’s own figures when a person living in poverty without a job starts work the chances of the family moving out of poverty are only 56 per cent. The other 44 per cent continue to live in poverty despite taking on work. This Bill is likely to make this situation worse.^[3]http://www.jrf.org.uk/blog/2012/10/work-best-route-out-poverty explanation including a link to raw data.

Conflating “unable to work” and “unwilling to work”

“That same system trapped huge numbers, millions, in dependency, dependent on the state, unable, unwilling to work. What is either moral or fair about that? That’s my challenge to the bishop.”

Iain Duncan Smith’s response conflates those unwilling to work and those who are unable to work. Again this reinforces the impression that the Welfare Benefits Up-Rating Bill, a measure which most affects those in work, is about the problem of people not working.

It also makes a more fundamental statement suggesting a number of people on benefits, comparable to those unable to work, are lazily cheating the system and do not wish to work – and that the root of the problems of both groups is “dependency on the state”. The implication that worklessness is caused by substantial numbers of people being lazy (possibly encouraged by the benefits system) is utterly groundless and flies in the face of the available evidence.

The minister does not state what positive effects he believes the indiscriminate cut in benefits proposed by the Welfare Benefits Up-Rating Bill will have in reducing the numbers of people who are unable or unwilling to work, therefore the relevance of this challenge to the Bill is not immediately clear.

Large numbers used without context

“People who are paying taxes, working very hard, have hardly seen any increases in their salary and yet, under the last government, the welfare bill rose by some 60 per cent to £200 billion.”

While the numbers are broadly accurate it is important to note their context. During the 13-year period where expenditure increased by 60 per cent, national income, national tax-take, and other government expenditure increased at roughly the same rate. Simply put, the proportion of taxes being spent on welfare stayed relatively static over the years the Minister is talking about.

It is also important to note that pensioners are exempted from any cuts from the Welfare Benefits Up-Rating Bill but make up over half of the £200 billion budget. The expenditure on pensions increased faster than the benefits targeted at working age families and children. Yet these latter benefits are the only ones that the Bill proposes to cut.

The reference to wages is interesting as over the time period where welfare expenditure increased by 60 per cent, average wages increased much faster than benefits. It is correct that over a shorter time period since the Banking Crisis the average wage has not increased in line with inflation or most benefits. The wages of higher earners have continued to increase in real terms.

The Government’s response to the Bishops’ letter has been to restate its views on the problems of the welfare system as a whole. Sadly the response by the Government has emphasised the comfortable myths about poverty in the UK. It lacks any substance as to how the widespread reduction in levels of support to the low paid and those unable to work will do anything but make already difficult lives more difficult.

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