Poverty of thought

Written by Mandy Rhodes on 28 April 2014 in Editor's note

Our welfare bill starkly illustrates an economic strategy that has gone wrong, and the way to fix it is to think radically about the economy in which we operate. 

Dubbed the Easterhouse epiphany, it was the day in 2002 when Iain Duncan Smith, then leader of the Conservative Party, now Work and Pensions Secretary, walked around the Easterhouse estate in Glasgow with local activist Bob Holman and saw poverty at first hand.

IDS was so shocked by the deprivation, squalor and human life being laid waste that he decided there and then to go on a crusade to change our approach to welfare. And make work pay. His compassion, reportedly, drove him to establish the Centre for Social Justice and to an evangelical fervour in tackling societal breakdown and informed his politics. IDS was, says the story, a man on a mission.

Fast forward 12 years and his so-called epiphany is on a rerun and, well, in reverse. As Work and Pensions Secretary, he is responsible for the Tories’ programme of social reform: blamed for the bedroom tax, the risible introduction of Universal Credit, the demeaning work capability assessment interviews that have, quite literally, ended in death, and swingeing cuts to housing benefit which could see a return to Thatcher’s approach to young people i.e. cut them off and kick them out. Duncan Smith’s dream of eradicating the deprivation he witnessed in Easterhouse has been replaced with a Draconian nightmare of ongoing benefit cuts for millions of claimants and a safety net with holes so large that whole families can fall through. And this is within the Union.

So you’ll pardon me for having a wry smile when last week, the DWP published its UK analysis paper on the impact of Scottish independence on pensions and welfare. In summary, the news is dire. Scotland, says the ‘independent’ research, gets more than its fair share in social security and with independence it will, unsurprisingly, cost even more – an extra £450 a head a year more. And with spending on social security in Scotland two per cent higher than the UK average at £17.7bn in 2012-13, Duncan Smith says that SNP promises such as delaying the retirement age increase to 67 – because frankly we die sooner – cancelling the new universal credit benefit system, and setting up a separate social security apparatus would have to come from tax rises, spending and public service cuts, or increased borrowing. And, in addition, leaving the security of the UK, which has allowed higher per head spending on pensions and disability benefits, those cuts “would risk the wellbeing of vulnerable people currently supported by this system”.

And while all of this may be true, I’m sure the hypocrisy is not lost on the thousands of benefit claimants already struggling to survive, or to the working poor wondering why they bother, or to the people forced to go cap in hand to accept food parcels from our fast growing network of food banks, or to the disabled forced back into unsuitable work, or the young destined to a life on the streets, or to mothers forced back into unemployment because of the high costs of childcare. This is not a good time to be poor.

How paradoxical, then, for a man who points to Scotland as being the inspiration behind his welfare reforms, that IDS was nowhere to be seen to answer those sorts of anomalies. Instead, he dispatched the Secretary of State for Scotland, Alistair Carmichael, to be the latest prophet of doom and to allow a Scottish Lib Dem minister to defend the indefensible – why is Scotland so heavily dependent on welfare even while within the UK?

But then Carmichael painted a very different picture. He said that the Westminster welfare system is “a fantastic system, which provides support for some of the most vulnerable people in our communities”. His enthusiasm was gobsmacking in the face of the fact that it is also a system that is responsible for a 400 per cent increase in food bank use and will push up to 100,000 children in Scotland into poverty by 2020 and for which all three main UK parties have voted for a permanent cap on spending.
But then these are not all the facts.

Our welfare bill starkly illustrates an economic strategy that has gone wrong and the way to fix it is not simply to cut what we have within the matrix that exists but to think radically about the economy in which we operate.

Next month, the Expert Working Group on Welfare and Constitutional Reform, chaired by the Carnegie chief executive, Martyn Evans, and established by the Scottish Government last year, is expected to report. Hopefully, it will tackle some of the deeper issues, like why does our welfare system simply prop up market failure subsidising low-paid jobs, high rentals, and unaffordable childcare? Why do we have a third of people on disability benefits wanting to work but unable to get off the system and into employment? And why do we accept as inevitable that jobs in the care system, for instance, should be long hours and low paid? Let’s tackle these.

This isn’t a question of whether we need to be independent or not to solve these problems because Scotland is not unique and we share the same problems as the rest of the UK. But what we do have is an opportunity given by the referendum to question the society we want our economy to help create.

For some, like Bob Holman who was Iain Duncan Smith’s welfare tour guide, the answer now lies in ‘Yes’. For others, it is also clear that the answer does not simply lie in the status quo. This debate has given birth to fresh thinking. People across Scotland have been awakened and they are ambitious for change. Old structures, old solutions, old arguments haven’t worked and with the formal referendum campaign only starting for real next month, with it should come some real clarity about the Scotland we want regardless of the vote. That will make this an historic time.

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