Red Tories Blowin in the Wind: A Chronicle of Welfare Cuts Foretold

 

Sometimes calling them Red Tories is being too kind. Labour’s £6 billion pounds’ worth of cuts to disability benefit, which threatens the “ability of low-income families to meet basic needs like food and shelter, potentially endangering lives”, is going somewhere even the Tories under Iain Duncan Smith’s regime of conscious cruelty did not tread.

The cut means that from next year new claimants in the Limited Capacity for Work-Related Activity group (LCWRA) will only get £47 a week to ‘live’ on, £50 less than they currently do. Existing claimants will have their benefit frozen at £97 a week, a real-terms cut. And if you’re under 22 you won’t be able to get anything at all.

Additionally, it will become harder to claim Personal Independence Payments. Under Kendall’s plans you have to ‘score’ more points on daily activities, such as incontinence, washing and dressing, and communicating.

For context, LCWRA is the old Support Group under pre-Universal Credit Employment & Support Allowance (ESA). These are people officially deemed to have such severe health problems there is no current prospect of them being able to work, notwithstanding Labour’s insistence that those with the harshest, ‘life-long’, conditions will be exempt.

Even Iain Duncan Smith left them alone. His attention was taken up with applying the Work Capability Assessment – introduced by Labour in 2008 – to existing ESA claimants, to turning the screw on those declared unfit for work but placed in the Work-Related Activity Group  (the equivalent of the Limited Capacity for Work group under Universal Credit), and ratcheting up sanctions on Jobseekers’ Allowance claimants (over a million sanctions were imposed in 2013).

Not that he wouldn’t have got around to it had he not abruptly resigned as Work and Pensions secretary in 2016. Although it’s illuminating to recall why he resigned from Cameron’s Cabinet. It was, he claimed, because he couldn’t stomach cuts to Personal Independence Payments*, which would have made it harder to qualify for PIP and meant some people wouldn’t have got anything at all. Last year, nearly half of all claims for PIP, around 300,000, were rejected.

The Starmer/Kendall/Reeves cuts are on top of the cuts that Duncan Smith found so intolerable he had to resign. This means that the current Labour government are significantly to the right of Iain Duncan Smith. When Rachel Reeves promised to be tougher than the Tories on benefits (not as tough as, mind, but tougher), she was telling the truth for once.

But with all due respect to the innate genius of IDS, Kier Starmer, Liz Kendall, Rachel Reeves, Therese Coffey or Yvette Cooper (that’s irony by the way), you can see what is going to happen to disability benefits simply by observing what important think tanks and corporate ‘thought leaders’ are saying.

The fact the Labour are introducing these cuts is, in a sense, irrelevant. Labour are, at present, the British government (probably for one term admittedly) and this is simply what the British government wants to do.

So let’s look at a chronicle of disability benefit cuts foretold.

In November 2014, Paul Litchfield, chief medical officer of the BT Group, published the fifth and final independent review of the Work Capability Assessment. This was, as John Pring notes in The Department, the very time that claimant deaths were reaching a peak under the first round of austerity, but Litchfield wasn’t interested in that. He recommended that the government look “as a matter of urgency” into why there had been such a substantial rise in the proportion of claimants placed in the Support group.

In a curious twist of fate, that is exactly what Starmer’s Labour government is doing.

In 2016, the neoliberal Reform think-tank proposed slashing the weekly benefit given to people in the Support Group by £58 so as to equalize it with the rate of Jobseeker’s Allowance. The thinking was that having a higher rate for sick and disabled people encouraged them “to stay on sickness benefits rather than move into work”. The chimes perfectly with Labour’s claims that the benefit system represents a “big discouragement to work”.

Reform (the think-tank not Farage’s company masquerading a political party that is currently leading in the polls) also described the benefits system as “broken” which uncannily is the exact word chosen by Sir Kier Starmer.

Interestingly, though, while Reform advocated putting the money saved from removing the additions to standard unemployment allowance into an enhanced Personal Independence Payment, Labour is cutting PIP as well. And the benefit levels for disabled people and the main body of claimants aren’t being equalised, the former is being significantly reduced.

Also in 2016, the Social Market Foundation proposed abolishing the ESA Support Group entirely.

The writer, who in 2016 analysed the output of these think-tanks, made a prophetic statement: “Policy change can often be explained by reference to changes in background ideas about the state, society and the individual, held and promoted by influential individuals, groups, political parties and … multinational companies,” she said. “It turns out that you can predict such a lot by simply watching the way the wind blows.”

Dominic Cummings, who apparently is informally advising Starmer’s government, used to refer to the educational ‘establishment’ – made up of local authorities, teaching unions and even the Department of Education – as the ‘blob’ because they were, allegedly, always thwarting his plans for schools.

In reality, the blob, consisting of “influential individuals, groups, political parties and … multinational companies” is always at work ensuring governments, as in the case of disability benefits, keep to the neoliberal script.

It is so huge it is very difficult to exist outside of it. The blob has a very keen sense of its own self-interest, and can always provide useful advice on what to say on any given subject, meaning its members don’t have to expend too much energy on thinking.

Corbyn wasn’t part of the blob and look what happened to him. But the blob has devoted acolytes at the helm of all political parties (and also in the backwaters of all political parties). Reform, the ‘party’ that is, might present itself as anti-establishment but it is right at the heart of the blob; its former leader, Richard Tice, handily on message in attacking “shirkers and skivers”.  The Greens might appear to be the one political party that is resisting the blob but should they ever hold the balance of power and enter government, I predict the blog will emerge victorious after a short scuffle.

To adapt the old anarchist canard, and song, no matter who you vote for, the blob always gets in.

* Duncan Smith was a tyrannical advocate of the notion that work is good for you, a zealotry shared with fellow blob dwellers Starmer, Reeves and Kendall. So it’s revealing that he was so opposed to cutting Personal Independence Payments. Perhaps that’s because, in recompensing people for the additional costs of disability, PIP enables people to work. But this realisation is apparently lost on the geniuses in the DWP.

André Gorz and the importance of refusing work

Twenty years ago the French philosopher André Gorz warned of the crucial difference between a basic income that enabled its recipients to refuse work and one designed to prompt them to take any on offer.

At a time when basic income advocates were a novelty, Gorz foresaw the dangers ‘inherent in demanding continuous income for discontinuous work’. Basic income was, according to one contemporary conservative advocate, not an end in itself, but the means for everyone to ‘fit themselves into this new system’.

The idea, said Gorz, was ‘to enable employment to become intermittent, and [it] may even encourage such intermittent employment’.

But a ‘sufficient’ unconditional basic income had precisely the opposite logic. “The aim,” he wrote in 1997’s Reclaiming Work, “is not to force the recipients to accept any kind of work on any terms whatsoever, but to free them from the constraints of the labour market. The basic social income must enable them to refuse work [my italics] and reject ‘inhuman’ working conditions.”

Far from encouraging work and entrepreneurship, Gorz wanted a basic income, in line with the ideas of libertarian communists and socialists of past eras, to lead to ‘less employment and less selling of labour and services’. He looked forward to the ‘elimination of work as the dominant form of activity’ and its replacement by myriad forms of ‘personal activity’.

In the late ‘90s, few policy-makers paid serious attention to proposals for a basic income. Now, by contrast, basic income pilots are springing up like mushrooms after a cloudburst. Experiments are planned, or are in progress, in Finland, Canada, the Netherlands and Scotland.  The kind of basic income they embody, however, is closer to Gorz’s nightmare than his dream of liberation.

Intermittent employment, through zero hours contracts, extreme part-time work, freelancing and the burgeoning gig economy, was only just emerging into the sunlight in the 1990s. But now it is an established fact of life for millions of people. And all the basic income pilots, without exception, take intermittent employment as a given, even a desideratum. Basic income, in other words, becomes a means for people to ‘fit themselves into this new system’.

In Finland, the centre-right government hopes the basic income pilot will help participants ‘take short-term jobs’ and ‘encourage people to seek and accept work’. The BI pilot in Ontario, Canada, though set at a more for generous level than in Finland, aims to ‘strengthen the incentive to work’.  In the Dutch city of Utrecht, the ruling socially liberal D66 party, which has initiated a BI experiment directed solely at the unemployed, is committed to ‘strengthening the economy for entrepreneurs, be they big multinationals or small-scale freelancers.

This all suggests that these basic income pilots, besides being more humane that punitive welfare systems, will be good for the economy. But ‘sufficient’, Gorz-style basic income, aimed at facilitating the refusal rather than the acceptance of work, while sounding utopian, may in fact be more economically beneficial. This is because it works to a counter western societies’ now permanent over-supply of labour.

A basic income that is i) substantial and ii) paid to everyone, not just the unemployed and the poor would, according to one article on radical implications of basic income, ‘simultaneously push up the wage rate for unattractive, unrewarding (which no one is now forced to accept in order to survive) and bring down the average wage rate for attractive, intrinsically rewarding work (because fundamental needs are covered anyway)’.

Or, as one of the organisers of the Swiss group, Generation Basic Income (which advocates a monthly ‘basic income max’ of nearly £2,000 a month), puts it: ‘Income from labour will be renegotiated ….Good work that people like to do, will be cheaper. Poor work that people do not like to do, will be better paid, because no-one can be blackmailed with their existence to do it.’

Many basic income advocates stress the inexorability of automation as demonstrating a ‘like it or not’ justification of an unconditional income. But so-called advanced economies, certainly the UK, are de-industrialised without being fully automated. In many ways, they are running on the easy availability of abundant cheap labour. There are now 20,000 hand car washes in Britain, while the automated version – rollover car wash machines – have halved in number in a decade.  This is reverse automation.

 A substantial basic income, that enabled the refusal of work, could turn off the labour tap and spur automation in a way that ‘incentivising employment’ basic income won’t.

In short we don’t need to create more low paid work but this is just what the intermittent employment model of basic income is predicated upon doing. A ubiquitous justification of this model is that it gives the recipients the confidence to start their own business because they won’t face starvation if they fail. It’s hard to argue with the logic except that the last thing we need is more small businesses. Self-employment in the UK, in the most un-basic income conditions imaginable, has already increased by 26% in the last ten years, and now encompasses 15% of the workforce. Simultaneously, since 2008, the income of the self-employed has dropped by a quarter.

The reason is that the ranks of the self-employed have been boosted by a legion of small-scale service businesses – cleaners, gardeners, dog walkers, website designers, personal trainers, nutritionists – that are often barely able to keep their head above water financially. Introducing an insufficient basic income would boost the number of these services immensely and – because they would be many more freelance dog walkers for busy dog owners to choose from – would water down self-employed income even more.

Ventures like Task Rabbit, which matches freelance contractors with people seeking help with tasks like moving or cleaning, have spread across the US and are now growing in the UK. According to the chief executive of one ‘crowdworking’ US company, technology now enables employers to recruit people for ten minute tasks, pay them a tiny amount of money and then ‘get rid of them when you don’t need them anymore’. This is as good a description of a capitalist dystopia as I can find, and it’s an economy that would be massively emboldened by the guilt erasing incentivising employment model of basic income.

The above may seem churlish in the context of a welfare state that has morphed into a punishment state, and relishes denying income to the sick and disabled, forcing them to beg at food banks. Compared to this, unconditional income is little short of an epiphany. But when I think of the future in the light of a basic income predicated on incentivising work, I can’t help but envisage millions of self-employed task bunnies meekly serving the myriad whims of the elite. Labour will have never been so cheap or so abundant. No-one will starve but everyone will be exploited.

The EU and the permanent over-supply of labour

Regardless of the result of Thursday’s EU Referendum, I would suggest that politics in the UK and Europe won’t be able to drag itself out of the racist and murderous cesspool it is descending deeper into until one issue is honestly faced – the now permanent over-supply of labour.

As is obvious, the vast majority of people require a paid job or jobs to physically survive and make sure their retirement is barely tolerable. Government policy has in the last two decades, and especially since the Great Recession, made entering the labour market under any terms inescapable. Sanctions, workfare, the compulsion applied to sick and disabled people to seek work and the new “in-work conditionality” of Universal Credit, represent an iron cage of labour coercion from it is impossible to escape. All that is impeding an utterly Dickensian race to the bottom is minimum wage legislation.

Meanwhile, retirement ages have been increased across Europe, increasing the ‘pool’ of available labour, and ‘structural reforms’ hawked by economic ‘experts’, like the OECD and the IMF, advocate increasing labour market ‘participation’ by reducing ‘generous’ welfare benefits, and thus, theoretically, trimming government deficits.

At the same technological change will make, and is making, labour far more dispensable and insecure. Research from the US indicates that for the bottom fifth of society a greater than 30% month on month change in total income is already the norm. In the UK, the charity Citizens Advice estimates that 4.5 million workers are in insecure work, defined as zero hours, variable hours and temporary or agency work. This figures does not include the 15% of the UK workforce in self-employment, by nature an insecure form of work, and whose income has plummeted by a quarter since 2008. The self-employed are not the digital whizz-kids of folklore but more likely to be freelance dog walkers and gardeners – pseudo-jobs whose owners are living with income precarity and poverty.

This structural over-supply of labour has been aggravated by the EU’s single market. The proportion of foreign-born workers in the UK working age population is now around 20%, compared to a steady 8% between 1984 and 1995.

The effects of an over-supply of labour has exacerbated by other changes in UK society. The secure tenancies and controlled rents of council housing have become a utopian dream for most people. The private rented sector, with tenancies that can be ended at a moments’ notice and rents that may eat up 60% of pay, has become the only alternative for millions, while lifetime tenancies for new council house tenants are being abolished.

“Human beings do not thrive in an atmosphere of relentless change over which they have little control,” says Anthony Painter of the RSA.

Internationally, the over-supply of labour has been a boon for multi-national corporations who scour the globe looking for the cheapest source of labour (a process misleading called ‘globalisation’). Between 1980 and 2007, the global labour force (people whose livelihood depends on working for pay) increased by 63%, from 1.9 billion to 3.1 billion.

“Not only has the growth of the global capitalist labour force (including the available reserve army) radically altered the position of third world labour, it has also had an effect on labour in the rich economies, where wage levels and stagnant or declining for this and other reasons,” say the Marxist economists, John Bellamy Foster and Robert W. McChesney. “Everywhere multinational corporations have been able to apply a divide-and-rule policy, altering the relative positions of capital and labour worldwide.”

The effect of this process on countries like the US, has been devastating. According to the behavioural economist Daniel Kahneman, US manufacturing and middle class jobs have been decimated in recent decades. “There are places where real incomes have dropped 30% over the last thirty years,” he told the Daily Telegraph. “There used to be a concept that if you do your job, and live your life properly, things will be fine. People don't think that anymore.” These places provide Donald Trump with his core constituency.

But the political consensus, the centre-left as well as the Right, is in purposeful denial about these developments. The resolution of governments has been to push people into any kind of work, while eulogising the benefits of free trade, immigration, deregulation and lower tax for corporations. “Public institutions should push against a dangerous tide rather than accentuate it,” says Painter. “We’ve done precisely the opposite.”

The question is, if the ‘relative positions of capital and labour’ have been altered, how do you redress the balance in favour of labour? As Painter and many others have pointed out, Basic Income could imbue labour with a measure of bargaining power that it currently sorely lacks. People who now can’t say no because anything is better than nothing, would be empowered to refuse low paid, insecure work. This change would also give a shot in the arm to automation if armies of desperate people were no longer available on tap. It would spell the end for an economy feeding off cheap labour.

An expansion, not a contraction, of social housing, together with secure tenancies, would also take some of the bite out of the structural over-supply of labour.

This, however, is only half the equation. Do you need a global basic income to really make a difference to the over-supply of labour? Is that remotely feasible? In its absence, there are things you can do, such as reducing low-wage EU migration into private sector jobs. The danger is that countries lapse into isolated, regulated national economies, or worse. But forgetting the fact that you live in an exploitative, capitalist economy, and that an international free market in labour is no more conducive to human welfare than a free market in capital is, is not a safe haven. Neoliberalism, inside or outside the EU, does not work.