By Dave Sewell
Downloading PDF. Please wait... Issue 2517

The real cost of the Tories’ war on welfare reveals the truth behind it

This article is over 5 years, 11 months old
Issue 2517
Gone but not forgiven - Iain Duncan Smith
Gone but not forgiven – Iain Duncan Smith (Pic: Crown copyright)

David Cameron and his crusading work and pensions secretary Iain Duncan Smith made a mission of “reforming” benefits.

They imposed a bedroom tax. Their benefit cap drove poor families from their homes. They expanded “sanctions” for unemployed people and humiliating disability tests.

These policies caused immense suffering to the poorest and pitted “strivers” against supposed “skivers”.

This wasn’t about attacking “dependency culture”. Rather it was about using nasty attacks on the vulnerable to produce a shift away from the idea of poor people’s right to welfare.

That would in turn entitle them to slash the total welfare bill.

So how much did this save? The total welfare bill is now £26 billion a year lower than it would have been without Tory changes, according to the House of Commons Library. That’s a 10 percent cut in welfare spending, which is set to reach 15 percent by 2021-22.

The change that cut spending the most was switching the inflation rate for calculating benefit increases. The Tories changed it from the RPI inflation measure to the usually lower CPI in 2011-12.

Second was a three-year below-inflation freeze on most working age benefits from 2013-14.

Third was removing child benefit from higher earning families.

The Tory attacks on disability, sickness and unemployed benefits contributed to the deaths of thousands of people.


They were just cruel and ideological, rather than effective at cutting overall spending.

Duncan Smith’s attempt at further-reaching changes gave us the unworkable Universal Credit scheme. Its rollout was delayed for the seventh time last month.

The resilience of welfare spending exposes a myth about what it goes on.

There’s no minority underclass of claimants sponging off the rest of us.

Benefits have become integral to how the whole working class pays the bills. Unemployed, disabled and sick people have every right to state help. But the majority of working age claimants are in work.

By far the biggest component of the welfare bill is the state pension, followed by tax credits and housing benefits.

Costs are rising partly because more people are living longer—surely a good thing—and partly because housing privatisation and speculation have sent rents rocketing.

But mostly the rising benefits bill is the flip side of the declining wage share.

The proportion of Britain’s national income that goes to workers has plummeted. Between 1980-2010 this drop cost the average worker £7,000 a year, according to the TUC.

New Labour used benefits to let bosses off the hook for fleecing or discarding workers.

The economic crisis makes bosses keener to boost flagging profitability by taking more from workers. The welfare state takes part of the strain.

Politicians focus on out of work benefits partly because those claimants seem easier targets.

The Tories know cutting pensions is a huge electoral risk, and George Osborne’s last attempt to cut tax credits was part of his undoing.

But it’s also because if they can’t abolish welfare, they’ll settle for weaponising it.

Bosses have always used unemployment to scare workers into taking worse wages and conditions.

By adding to the pain, poverty and stigma of being out of work, the Tories are waging a class war against those in it.

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