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Privatising poverty

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Government plans to get more people into work will not end poverty – they are part of a drive to privatise welfare, argues Michael Lavalette
Issue 2061
(Pic: » Tim Sanders)

It’s not often that I agree with Gordon Brown, but I was amazed to read in June that he said, ‘In the fourth richest country in the world, it is simply wrong that any child should grow up in poverty.’ I couldn’t agree more.

I briefly wondered whether I had got it wrong. Was Gordon going to deal with poverty and inequality? Would he, at last, put welfare before warfare? Was he promising to invest in proper, accountable public services?

Was he now admitting that good quality services require well-paid, well-trained, frontline workers who have time to deliver good quality services rather than find their working lives shaped by over-work, stress and bureaucratic form filling?

Unfortunately the answer to all of these questions is no.

After just a few weeks in office it is clear that Brown wants to continue with the policies of Tony Blair. In fact there is evidence that the rate of privatisation of welfare and attacks on those in benefits is going to intensify in the coming months.

Last week the government published a green paper called ‘In work, better off: next steps to full employment’. It presents the government’s plans for changes to its welfare to work programme and represents further erosion of the post-war welfare state.

At its heart is the simple message that the way to end poverty is for people to work – no matter the job or the working conditions. It is clear that, for the government, the reason we have child poverty is because lone parents are failing – they are languishing on benefits, living off the state.

What is particularly worrying about the new proposals is that by October 2008 lone parents with children of 12 or over will no longer be entitled to Income Support and by 2010 this will be reduced to those with children aged seven or over. Thus those on benefits should be put to work.

The types of jobs on offer are made clear by their boast that they have managed to get a number of ‘major employers’ to enter into ‘job pledges’.

These companies have pledged to take on people moving off benefits. Those who have committed so far are Asda, B&Q, Sainsbury’s, Tesco, Carrilion, McDonald’s and Marks & Spencer.

As a councillor in one of the poorest wards in Preston, I regularly meet people who work for these companies. The one thing I can say is that working for them does not solve the problem of child poverty.

In fact if I wanted to draw up a list of companies where workers have to work long, unsocial hours for poverty pay I wouldn’t have to stray far from the government’s new choice of partners.

The government claims low pay is solved by the tax credit system. Essentially this introduces a wage subsidy which allows employers to pay poverty wages in the knowledge that the benefits system will top this up.

But, for recipients, it also introduces poverty traps where any increase in income is lost by reduction in tax credit.

Government plans are essentially about two things. First, reducing public welfare spending – by attacking some of the most vulnerable, and poorest, in society.

Second, it is part of their drive to increase the direct involvement of private companies in state welfare provision.

Of course the involvement of multinationals in welfare to work is less direct than in other areas of welfare provision. But it is clear that the government is determined to increase the involvement of private companies and large voluntary sector organisations in the provision of state welfare.

Two weeks ago Ed Balls, the secretary of state for children, schools and families, announced the intensification of the academies programme where private companies get access to state money to control local schools, set their curriculum and determine teachers’ pay and conditions.

In the NHS various private companies (including the South African multinational Netcare) have been given ‘preferred bidder’ status which gives them access to state funds to carry out various medical procedures for profit.

Even regional probation services have been told that 40 percent of all service providers must now come from the voluntary or private sector, with companies like Group 4 desperate to move in.

It is now possible to find yourself in a Group 4 private prison on remand, transported to court in a Group 4 van, and get a probation officer employed by…Group 4.

There has been a change of leadership in the Labour Party, but the policies have stayed the same – and this means the welfare state is simply not safe in their hands.

Michael Lavalette is Respect councillor for the Town Centre ward in Preston and joint editor, with Iain Ferguson, of International Social Work and the Radical Tradition available from Bookmarks bookshop »

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