Notice


I now write on law and regulation facing the pensions sector for Professional Pensions and this portfolio will no longer be updated. Please read all my new articles on the Professional Pensions website.

Waging War on the Welfare State

Welcome to April. At the next possible opportunity, make a U-turn.

Today is the day of the implementation of further dreaded cuts. As April arrives, we can only optimistically hope that it is some well-organised April Fool’s joke, but unfortunately we know better of a Conservative Government. Lambasted as the “nastiest” ever Government by the TUC, it is difficult to ignore the harsh effects of the benefit changes that are begin from today; from our beloved “bedroom tax” to the loss of legal aid. All of these seem set to only make the poor poorer in the name of deficit reduction.

While Iain Duncan Smith claims that they changes are “fair”, the shouts of society are in stark contrast and looking at the policies, we can understand why. Firstly, and most prominently argued, is the effects of the incoming “bedroom tax” which will force families out of social housing simply due to the number of rooms their house has. Two-thirds of the people who will be hit by this tax are disabled. People will be coerced into moving into smaller homes which may not meet their needs, in order to remain financially sustainable.

Perhaps in an attempt to pin some blame on the local councils, the Government are now offloading council tax benefits into local control (with a 10% reduction already imposed). Whilst local councils are already being forced into making cuts by the Government, there is little leeway for them to increase the spending in these areas and we are likely to see further reductions by local councils in order to meet the other demands required of them.

At the end of the month, the Universal Credit will be piloted in the area of Ashton-under-Lyne, intended to merge many different benefits together into one means-tested payments. However, this will undoubtedly reduce the amount of money that claimants will receive, pushing those with no alternatives further towards or below the poverty line. Furthermore, with the software for the pilot not yet looking ready, this reform is looking set to fail.

The U-turns and amendments of the Government on planned policies have simply demonstrated how ill thought-out their work is. With regards to the “bedroom tax”, it is a sorry state of affairs that the public and Labour must point out how the policy would disproportionately impact the elderly, disabled and military families, before the Government can realise what is wrong with their policies. It changes little though and many policies continue to pass through the Houses and into legislation without being properly scrutinised and surrounded by public and opposition doubt of their practicalities, effectiveness and, most importantly, impact.

However, the welfare system is far from perfect and its reform is not a topic we should just shy away from. There are things about the system which are fundamentally unfair; for example, that some families can be better on benefits than if they worked, but the battle plan of the Government is waging war on the wrong side. Rather than ensure that companies pay their employees wages which make living comfortably possible, therefore ensuring that people on benefits do not have more money than their working counterparts, they are simply reducing the amount of money they dole out to help those in real need of help.

The fiscal year of 2013/2014 will definitely hit hard, and those who need the most financial support will see it unfairly dwindling away whilst their rich counterparts receive a tax break. It is unfair, it is harsh and it is ill thought-out but these are reforms we will be forced to suffer the consequences of, simply so that we try and get rid of those minus signs in our bank balance.

Read more in Comment