Welfare reform is not only cruel but chaotic. Theresa May must address this
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Version 0 of 1. The most charitable interpretation of Theresa May’s evasive responses to questioning on the impact of the government’s social security policy during TV appearances at the weekend is that on this topic she is clueless. She appears to have no idea what is happening in the chaotic new world of universal credit and the lower benefit cap. One might advise a little more prime ministerial curiosity: as the gruesome details emerge it is clear that the George Osborne-Iain Duncan Smith-era welfare reform, largely left untouched by May so far, is shaping up to be one of the great Conservative policy catastrophes. It is a shame the imminent general election has forced the Commons work and pensions select committee to curtail its inquiries into the impact of these two policies before reaching a formal conclusion. But May could still read the evidence submitted to the committee from claimants, welfare advisers, housing associations and councils, which is brutally clear: the benefit cap is not just strikingly cruel but, predictably, an abject failure on its own terms of getting people into work; and that universal credit continues to be as expensively dysfunctional, poorly designed and complicated as many feared it would be. Unsuprisingly, the committee heard that benefit-capped claimants were experiencing “drastic and abrupt” cuts to their income as a result of the new lower benefit cap limit of £20,000 a year (£23,000 in London). No surprise there. Instant impoverishment is supposed to be a cunning “incentive” to force people to move into work (freeing them from the cap) or into cheaper housing. Yet in the real world, too often claimants can’t work even if they want to – they have small children and no accessible childcare; they are ill (and in many cases have been found unfit to work); or there is nowhere cheaper to move to. For these people, like the capped mentally ill woman in Dorset cited by Shelter in its evidence, the only practical options are debt and starvation. “In order to make rent repayments,” Shelter writes, “[our client] stopped eating and had lost so much weight that she was down to six stone.” One assumes this is not the kind of claimant behavioural change ministers had in mind when they designed the cap – which combines a number of benefits, including income support, child tax credit and housing benefit, and puts a limit on the amount that can be received. But it is not the only (presumably) unintended consequence. The debt and poverty advice charity Turn2Us told MPs that over the last few months it had experienced a cap-related surge in calls from pregnant women requesting a benefit check “to ascertain what they would be entitled to if they continue with the pregnancy, citing that the outcome will help them decide whether they continue with the pregnancy or terminate it”. It expects this kind of call to become more frequent as the two-child tax credit limit takes effect. It will not surprise anyone familiar with universal credit that the 150-plus evidence submissions to the committee about the government’s flagship benefit reform programme raised a “near unanimous set of concerns” about its day-to-day operation. Briefly, these are: design flaws that make universal credit a turbo-generator of claimant debt and rent arrears; and profound problems of access caused by its digital-only nature, both for claimants trying to sign on or report changes, and for advisers and landlords trying to rectify its numerous faults and glitches. Cuts have stripped universal credit of the financial incentives that were originally meant to get people into work or work more hours, while design hubris has created an unresponsive system that, far from simplifying the benefits system, appears to have added fresh layers of complexity and delay. Surveying the mess, committee chair Frank Field MP noted acidly: “Changes that actually did save money and help the strivers get into proper, gainful employment would be very welcome, but that is not what we are seeing.” Ministers might also note that the inquiry evidence suggests these policies actively undermine their aspirations to reduce homelessness. To be credible as a social justice warrior, May needs to offer more than weary cliches about work being “the best route out of poverty”. The reality is much more complex, and as a start requires a measure of acceptance that, in its current manifestation, welfare reform – costly and largely ineffectual – isn’t working very well. |