Is ‘Getting people back to work’ the way to end poverty, as Iain Duncan Smith claims?

by richardhutton

In response to the Archbishop of Canterbury and other Anglican Bishops’ criticism of welfare reforms, the man primarily responsible declared that:

“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% to £200 billion. That means they have to pay for that under their taxes, which is simply not fair. That same system trapped huge numbers, millions, in dependency, dependent on the state, unable, unwilling to work”

Furthermore:

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

Are either of these statements accurate? No.

Firstly, according to poverty researchers Save the Children, and the Joseph Rowntree Foundation, 61% of children who live in poverty have at least one parent who works. Reduction of social security is one of the primary reasons for poverty continuing among these families. So, even if it was true – as Duncan Smith implies – that those in receipt of state aid were all unemployed, employment is not an automatic solution to poverty. Moreover, unemployment support comprises only 7.6% of welfare expenditure.

This is why the first statement is equally false: many benefits are paid to people in work, because their incomes are so low, they are insufficient to meet the cost of living in Britain. Nearly 1 million working people would lose their homes without housing benefit. Social security offsets the high cost of housing, along with low wages. It supplements the finances of disabled adults – the majority of whom work – because disability adjustments add to the expense of daily life. It compensates the cost of unpaid care. Nearly half of ‘the welfare bill’ provides pensions to those whose age leaves them incapable of work. These are people who paid taxes life-long.

Also, the total expenditure on welfare actually slightly decreased under the Labour government, up until the economic crash of 2008. It was 11.6% of GDP in 1996/97; but averaged 10.7 % up until the onset of recession ten years later; following which benefits for children and working age adults rose from an average 4.9% of GDP up to 6% by 2007/08 (as Red Pepper Magazine wrote in an excellent myth buster). According to the Institute For Fiscal Studies and the BBC, the welfare bill did not increase “by some 60%” under the previous government – it rose by 32%, which is slightly less than the average 40% it increased by every decade since 1945 – and half the rate of Duncan Smith’s exaggeration.

Without social security, Britain would experience a major social crisis, as has already burgeoned following cuts, caps, sanctions, and removal. Homelessness, poverty, and hunger have increased dramatically since the onset of economic recession – particularly since 2010, when the present government came to power. All told, social security does not trap people: it is a lifeline, and is the only remedy for the successive failures of governments, economics, and society. The Archbishops are clearly right to say that:

“As a civilised society, we have a duty to support those among us who are vulnerable and in need. When times are hard, that duty should be felt more than ever, not disappear or diminish. It is essential that we have a welfare system that responds to need and recognises the rising costs of food, fuel and housing. The current benefits system does that, by ensuring that the support struggling families receive rises with inflation.These changes will mean it is children and families who will pay the price for high inflation, rather than the Government.”

They were also justified in saying politicians have a choice in the matter.

Advertisements