The official line is that universal credit is being introduced to make things easier, simpler, gather a multitude of payments together to benefit people generally. As if fine-tuning bourgeois bureaucracy is a matter for anyone apart from itself and those it serves. The reality for those on the receiving-end is catastrophic to say the least.

Right from the start the scheme as a whole failed its own timetable time after time. For anyone relying on state benefits, especially new claimants, the system has become increasingly erratic, unfathomable and more and more subject to the arbitrary whims of individual bureaucrats. A sociologist might tell us that the delivery of a service, its timeliness and serviceability, are less important than the self-aggrandising machinations of bureaucrats and ministers and their staffs. Of more significance to us, however, is what it tells us about the state of capitalism in the so-called advanced world today.

Despite its name, the universal credit project runs completely against the professed ideal of the post-war welfare state: that a wage worker who becomes unemployed should be compensated with an income adequate for subsistence as a right, i.e. without means testing. Even if the 1946 National Insurance Act didn’t exactly see things in terms of basic human rights – it was conceived as an insurance scheme run by the state where the pay-outs would come from a fund based on the sizeable fraction deducted from workers’ wage packets. Anyone who had been earning a wage [well, at any rate adult males and single women] was entitled to ‘the dole’ simply by registering as unemployed. (Though this in itself was not always without stigma and unconditional payments for “interruption of earnings” did not last beyond six months or a year.) This is not a small point. The end of means testing was a key part of the post-war vision of Britain outlined in Beveridge’s famous 1942 report which gave the state responsibility for eliminating the five giant evils of want, disease, ignorance, squalor and idleness. The Beveridge Report was not just discussed by bureaucrats in some obscure parliamentary committee. Thousands of copies and summaries of it were published and widely distributed to reach a working class audience – including amongst serving soldiers and sailors. Hence the prospect of a benign welfare state capitalism in place of mass unemployment, poverty and the workhouse, became a key part of government propaganda to keep the working class committed to “the war effort”.

And so what Margaret Thatcher later called “the nanny state” came about, though it never fully matched Beveridge’s paternalistic vision. It didn’t last of course. But the reason is economic. The heyday of state-funded provision for the welfare of all citizens coincides with the period of post-war reconstruction and boom. The return of capitalism’s inbuilt structural crisis at the beginning of the 1970s undermined Keynesian economic theory and the state welfare policies that went with it. On the employment front, a more or less manageable situation of “full employment” (defined as a situation with no more than 2-3% of the work force unemployed) quickly gave way to mass unemployment on a par with the 1920s as industry after industry was restructured, dismantled and production ‘outsourced’ to cheap-labour economies in the rest of the world. This, coupled with rampant inflation [over 25% by the mid-1970s] which quickly undermined the value of unemployment benefit, put an end to any idea that national insurance could cover the cost of maintaining the unemployed, especially as many workers faced long term unemployment and could hardly be considered as ‘between jobs’. To this day, despite all the fiddling with official figures and measures to disguise it, unemployment and under-employment are intrinsic to the UK economy as in all the capitalist heartlands, as the table Unemployment and Insecurity in the UK Labour Market from the Centre for Social Investigation, Nuffield College, Oxford at the top of this article shows.

The old ‘family wage’ is long gone. Minimum wage or not, for decades now the take-home pay of a growing portion of the workforce has not been enough to live on without some form of additional state ‘benefits’. Today more people in a job than without a job are officially classified as ‘poor’. Together they make up well over a sixth of the workforce. (5.8 million out of a work-age population of 38 million people.) For decades too the state has been trying to disguise and manage the situation. Not always successfully. In 2011 riots of the dispossessed in various London districts echoed events in Toxteth and Brixton of thirty years earlier. No government dare withdraw the state support cushion altogether but nowadays nobody who loses their job is entitled to income adequate to live as a right, no matter how much national insurance they have paid. Instead a sophisticated form of means testing and monitoring by state agencies of people’s personal circumstances has become the norm.

“Means test: An official investigation into a person's financial circumstances

to determine their eligibility for state assistance.”[Oxford English Dictionary]

The whole panoply of benefits, allowances, credits claimable/available to individuals and/or families on low pay, to ‘jobseekers’, invalids, disabled … at the discretion of a state bureaucrat … has mushroomed out of the National Assistance scheme that was originally set up in 1948. Basically this was a bureaucratic afterthought to cater for a minority of people with “abnormal needs” not covered by national insurance. Anyone with an ‘abnormal need’ would have to undergo a means test. In 1966 National Assistance morphed into Supplementary Benefits. In 1988 Supplementary Benefits became Income Support. Since the introduction of ‘austerity’ following the financial crash a decade ago, the various Tory-led governments have been working on the introduction of Universal Credit.

Labour apparently does not oppose this in principle, just the details of how it is sometimes put into practice. For instance, Debbie Abrahams MP, Shadow Work and Pensions Secretary thinks

“It is absolutely vital that Universal Credit is properly aligned with other services to ensure that people can continue to access them free at the point of use. …

Labour is urging the Government to pause and fix the Universal Credit programme before it causes harm to millions of families.” [The Guardian 20.9.17]

“Free at the point of use” is not the same as recognising that everyone has the right to the basic necessities of life. Pausing and fixing universal credit doesn’t mean getting rid of it. So

What is Universal Credit?

This measure was supposed to unify 6 previous benefits –

• JSA, Jobseekers Allowance
• Housing Benefit
• Working Tax Credit
• Child Tax credit
• ESA, Employment and Support Allowance
• Income Support

At the outset the government and the class that it serves were simply looking to save money for itself and its own projects. For instance, instead of government and local government agencies paying out subsidies to various bodies, people would be responsible for making their own payments, thus saving the state the expense of employing people to do the work. For example, anyone receiving ‘universal credit’ now has to budget for housing benefit and council tax benefit for themselves. This is fine as long as they themselves get the correct amount of ‘universal credit’ and on time – neither of which are generally true. Moreover, universalising a payment which covers people in all kinds of situations, including many kinds of disabilities is not always appropriate. Someone resorting to food banks because they have been waiting 6 weeks or more for their first universal credit payment might not see sorting out how much is due to the landlord as a priority. More generally, after years of dependency, suddenly having to manage a wider budget can be a problem for those who have been used to living hand to mouth.

The results overall have been a pounding fist of tragedy, misery and complex confusion as more and more people are made homeless and suffer a lack of the basics needed to survive – food, electricity, gas and more. Right from the start, those enrolled onto universal credit are essentially placed into a situation which forces them into mounting debt.

The misnamed Welfare Reform Act of 2012 was the legislative instrument bringing us this latest turn in the capitalist screw. Under the banner of ‘simplification’ and so-called ‘fairness’ capitalism’s victims are being instructed to manage their own means testing. The measure was the pet project of Ian Duncan Smith who first announced it at the 2010 Tory conference. From the very start of the whole process it was clear that this was going to be quite distinct. The process of preparation of the legislation itself was chaotic with endless delay after delay, confusion after confusion. The initial notion was that this re-organisation of the benefits system would take 4 years for full implementation. Its supposed advantages – on the one hand people would be better off by being able to take such things as part-time work while on benefits and thus gain a foothold on the work ‘ladder’; on the other hand there would be less bureaucracy, saving money for the government – betray the agenda. Whatever the governing party the state today is faced with the intractable problem of how to manage and disguise a growing army of unemployed, under-employed and underpaid with the least cost to the state and without threatening ‘social peace’.

In reality the whole process has exposed the state’s ineptitude. Not only was there an interruption to it all courtesy of the death in 2012 of the chief officer involved in the project, followed by the next one resigning after 4 months, there were also repeated reorganisations and re-populations of the team as a whole as well as endless reviews of it all – bureaucracy at its best! Then in 2013 computer failures broke the initial test roll-outs in 4 areas with only one actually managing anything at all. Well into 2013 in the areas where some sort of roll-out had been managed, staff were having to do things manually via spreadsheets. Much was said at the time about the people used to create the computer based system as a whole. Accenture, HP and IBM were mentioned as possible recipients of a law suit or two over their mishandling of the creation of the software – at least £130m is the figure said to have been wasted up until 2013, let alone up until now.

The notion was that this new ‘benefit system’ would do a number of things:

It would be cheaper for the government because it would bring a less fragmented benefits system. So far, rather than costing £2 billion it is now rumoured to be costing £12 billion. Incidentally, major beneficiaries of this have been the corporate buddies of ministers who have palmed off computer systems onto the state that are now described as ‘unworkable’, ‘antiquated’, ‘not fit for purpose’.

It would encourage more people to take on work even if it is part-time and low paid. With the current trends towards self-employment via the gig and freelance economy this benefit does quite the reverse because it does not take into consideration fluctuations in income.

It would make things easier for people with families. Quite the reverse is true. People with more than one child are penalised which was not the case under the first drafts. Now many families are finding that they are having thousands of pounds removed from their benefits income because of these changes.

• Free school meals, currently being used by more than 1.1 million kids are under threat because of this so-called benefit. This when it is already the case that around 4 million children regularly go hungry each week, such is the benevolence of this updated system of ours.
• Food bank use tends to triple in areas where UC is rolled out.
• There is a general increase in mental health problems. Citizens Advice states that they are currently dealing with 9% more cases, mainly relating to this issue.
• Up until recently the phone number you had to call to make enquiries about your benefits under UC charged 55p per minute. For those with no income this was both ridiculous and punitive although it was an earner for the government.
• There has been a massive rise in homelessness as a direct result of this ‘benefit’.

Over the next few years the prospect is of a rise in rent arrears, housing debt and homelessness as a direct result of this measure. People are forced to wait 6 weeks for this benefit as part of its own rules, this often extends to 2 months or more. This has led to increased use of food banks. The Trussell Trust, which covers two-thirds of distribution areas, reports a 6.64 per cent average rise in referrals for emergency food in 2016/17, but a 16.85 per cent increase in universal credit rollout areas. Private landlords have all too often taken to refusing to rent to people because of this wait. In addition the element of UC allocated for housing costs is gradually being reduced. Where those in social housing used to get a better rate of assistance under the old benefits this will not be the case very soon and the amount paid to offset rent costs will be slashed. Under these conditions the numbers of homeless (236,000 in 2016) is set to rise by around 575,000 in 25 years and the numbers sleeping rough will be multiplied tenfold in the same period. Indebtedness has already risen – 75% of council tenants on the new benefit are in rent arrears, many up to 2 months behind or more.

All of this needs to be set against the continuing capitalist crisis. Capital always has to find ways to ease its own pains even if it causes misery and more to the working class. All of these measures have been a way to impose new rules on those with little. The British capitalist class and its uncivil servants have placed a new name at the head of a new set of rules designed to force people into a situation where it “pays” to work longer hours for less – the capitalist ideal! The Tories have been shown on a regular basis to be incompetent, callous, unprepared and heartless. Well, nothing new there! But the solution for the working class is not the very same system managed by pious Labour technocrats – there is no comfort zone – the solution lies in recognising that we have to get rid of capitalism, wage labour and its corollary, unemployment altogether.

Clastre/ER

5 November 2017