Professor Jonathan Bradshaw. Poverty and a 21st century welfare system. Invited presentation. Involve Yorkshire & Humber Annual Lecture 2013, Alcuin Research Resource Centre, University of York, York , 29 November 2013.
2. The 21st century began before the crisis. So I
will remind you of the world before austerity
The Coalition austerity strategy
The false claims of fairness
Consequences
The beastly rhetoric and lies
Welfare reform
The future
3. Labour did not “throw money at welfare with little
effect”
Invested in education, health, child care, housing
quality and neighbourhoods
Social spending as % GDP increased – but only to
the middle of the international league table
Labour had reduced child and pensioner poverty
and stabilized inequality
Improvements in almost all outcomes
Faced with the banking crisis and deficit
Response broadly anti cyclical and redistributive
Economy growing in 2010
4.
5. Aspiration to reduce the deficit (£81 billion) by 2014 – too
fast
Crucial decision: 20% from increased tax and 80% from
cuts in services and benefits. Actually now 15/85
300,000 public sector already jobs gone – plan to reach
1million by 2017
Unemployment 2.5 million – 21% youth unemployed
Public sector pay limit
£20 billion cut from transfers
Working age benefits fall in real terms (CPI and 1% cap
- latter takes £3.8billion from poor)
Prices rising faster than incomes = falling living standards
Real incomes fall by 10%
6. Cribb, J., Hood, A., Joyce, R. & Phillips, D. (2013) Living Standards, Poverty & Inequality in the UK:
2013, London: Institute for Fiscal Studies: http://www.ifs.org.uk/publications/6759, p 78
7. Chart 2.D: Overall impact of public service spending, tax, tax credit, and benefit changes
on households in 2015-16 (£ per year), in 2010-11 prices
500
0
-500
-390
-1,000
-930
-210
-700
-880
-1,500
-2,000
-2,160
-2,500
Bottom
Quintile
Q2
Q3
Q4
Top
Quintile
All
Households
Change in tax ___________________________Change in tax credits and benefits
Change in public service spending
Net change
Source: HM Treasury estimates based on a range of models and data sources
Chart 2.E: Overall impact of public service spending, tax, tax credit and benefit changes on
households in 2015-16 as a per cent of 2010-11 net income (including households’ benefits
in kind from public services)
2
1
0
1
-0.5
2
-1.2
-2.5
3
-2.6
-4
-3.9
-4.0
5
Bottom
Quintile
Q2
Q3
Q4
Top
Quintile
All
Households
Change in tax ___________________________Change in tax credits and benefits
Change in public service spending
Net change
Source: HM Treasury estimates based on a range of models and data sources
8. Cuts loaded on poor families with children
(Children’s Commissioner 2013) i.e.
Educational Maintenance Allowance
Future Jobs Fund scrapped
Child Benefit frozen
Working aged benefits/tax credits increased by CPI and
then 1% - unprecedented. Pensioners protected by triple
lock
2013 budget - raising the tax threshold does not help
the poor with incomes below it
That cut+fuel duty, beer and corporation tax cut =
£28 billion given away
Abolition of 50% tax rate
Devastating cuts in services.
9. No growth, no recovery, nearly triple dip
Deficit targets missed, lost AAA rating
Fresh round of (unfair) austerity in spending round 2013
Unemployment and youth unemployment
350,000 helped by food banks
Falling living standards 2008-2015
Absolute child poverty up 2% points 2011/12. Relative 17%
now - 24% in 2020 (IFS)
Majority of poor children (67%) now have a working parent
Outcomes deteriorating – child subjective well-being,
staying on rates, NEET, suicide, relationship breakdown …
Waste – the costs of child poverty £ 29 billion
10. George Osborne speech on welfare
David Cameron “doing the right thing”
Iain Duncan Smith eliding child poverty with 200,000 “troubled
families”/drugs
Misuse of statistics and evidence
Bizarre attempt to redefine poverty concept
Supported by chorus from the gutter press
Deeply wrong (about real nature of the Welfare State),
unpleasant and unforgiving
Influences attitudes and beliefs
Heroic churches, NGOs, academics and other “vested
interests”
? Labour Party
11. Three elements
Cuts
Bedroom tax affecting 600,000
Benefit cap affecting 75,000
Abolition of Social Fund
Abolition of Council Tax Benefit
Now PIP deliberately designed to save £2.2 billion (20%)
Welfare spending cap – gimmick or disaster
Work programme and toughened conditionality, seven days
waiting and weekly signing. Despite unemployment. Failing.
Social Security reform
Incompetent and flawed ESA reassessments – 40% win appeals
Universal Credit – delayed/suspended
12. Take it more slowly - £25 billion cuts planned
after 2015
13.
14. Take it more slowly
Anti cyclical policies – Australia, USA, Iceland
Take more from tax less from benefits/services
Priority to poor children not rich pensioners
(me)
Don’t trade-off expenditure on benefits for
services
15. Continue to be outraged, but stay calm
Continue to respond to the needs of the vulnerable
Document the evidence
Support NGOs that stand up for the poor =
CofE, CPAG, Children’s Society
Nothing is likely to change in the short-term
16. Not much of it going on - CPAG
? Back to Beveridge – bigger role for contributory
benefits
Universality
Jobs
Youth guarantee
Low pay – Living Wage
Housing supply – public investment falling!
Progressive taxation
A new settlement in favour of children