Britain’s benefit madness

LONDON — Mahatma Gandhi probably never said, “The greatness of a nation can be judged by how it treats its weakest member.” But that doesn’t make it any less true. And nowadays, the United Kingdom is in danger of receiving a failing grade.

According to the Joseph Rowntree Foundation, 14.5 million people, or 22 per cent of the UK’s population of 65 million, live below the “poverty line” (defined as less than 60 per cent of median income). Of a working-age population of 42 million, some 5-6 million, or about 12 per cent, are either unemployed or underemployed (working less than they want to). About 8 million working-age citizens, or 20 per cent of the total, qualify for what the British call “benefit”, whereby all or part of their income is paid by the state.

These figures are approximate, and some of the details are disputed. But the broad picture is that, even setting aside COVID-19, the UK’s capitalist system normally cannot provide a living wage for about one-fifth of the country’s working-age population.

This represents a huge change from the late 1940s, when Britain established its redoubtable welfare state. The philosophy that inspired it, reflected in the 1942 Beveridge Report held that the state would guarantee full employment, that work would provide the income for a decent life, and that the welfare system would deal with “interruptions” to work caused by unemployment, sickness, and maternity.

By the 1960s, the interruptions had become much more frequent, not because unemployment had risen, but because the number of claims for so-called national assistance (benefits not covered by insurance) rose faster than the working-age population. The initial growth stemmed largely from an increase in the number of single mothers and an additional entitlement to disability benefits. Later increases in the number of claimants, including in the early 1980s, were fueled by a rise in unemployment and precarious work.

The current situation, with about 20 per cent of the working-age population “living on the state”, has existed since the 1990s. The growing numbers inevitably resulted in the spread of means-testing and conditionality, which, together with demands to simplify an increasingly fragmented system, led to the introduction of the current Universal Credit regime, whose long rollout began back in 2011. The new scheme consolidated six benefits for working-age people, in or out of work, into a single monthly payment.

But the key move had come earlier, in 1995, when the UK’s then-Conservative government replaced the unemployment benefit with a Jobseeker’s Allowance. In contrast to the era of Keynesian full-employment commitments, claimants would receive the allowance in return for undertaking a mandatory “job search”, defined as “work activity”. Every claimant had to prove that they were spending 35 hours a week — the equivalent of a full-time job — looking for work. Failure to engage in the necessary “work activity” would result in their allowance, or “wages”, being docked or cut off.

The philosophy behind this parody of the work contract was clearly explained by Neil Couling, a senior civil servant at the UK’s Department for Work and Pensions (DWP), in his evidence to the House of Lords Select Committee on Economic Affairs in March 2021. “The system does require the 2.5 million people on universal credit to engage with work search as a condition of receiving universal credit,” Couling said. “You have to look for a job if you are going to get a job.”

As the DWP explained, “deliberately mirroring a contract of employment, the claimant commitment makes clear that welfare is no different from work itself”. This means that “just as those in work have obligations to their employer, so too claimants have a responsibility to the taxpayer”.

Pronouncements like this one reveal that insanity — the inability to distinguish fantasy from reality — has taken over a system. It is true that you have to look for a job in order to get one. But you will not find one, even if you search overtime, if there are none available. The fantasy behind the scheme (which also underpins neoclassical economics) is the assumption of full employment, with unemployment being simply a consequence of able-bodied workers’ preference for leisure.

Likewise, the UK’s benefit system assumes, insanely, that all claimants are digitally literate. The moving film “I, Daniel Blake”, about an unemployed carpenter who had recently had a heart attack, portrays Blake’s increasingly desperate efforts to submit a benefit claim online. Although his cardiologist has said he is unfit for work, the authorities say he lacks enough “points” to qualify for disability benefits. So, Blake has to apply for a Jobseeker’s Allowance, which means he is forced to attend a CV workshop and be coached to apply for jobs that he is medically unfit to do.

Blake, who is digitally illiterate, goes to a public library to use the computer there. When the librarian tells him to “run the mouse up the screen”, he takes the mouse and moves it across the monitor.

He then writes a CV by hand and gives it to various employers, who tell him that there is no work to be had. But the officials at the Jobseeker’s Allowance office are unimpressed. “That’s not good enough, Mr Blake — how do I know you’ve actually been in contact with all these employers?” says one. “Prove it.” This is pure Kafka, the algorithmic grinding of a senseless machine.

There is of course a method in the madness: Universal Credit can be seen as a deliberate tool to shape a currently redundant segment of the workforce into the forms required by low-skilled labor markets. But the disease is misdiagnosed: the problem is aggregate under-demand for labour, not a surplus supply of the wrong kind of labour.

The only escape from such a system is to replace fantasy with reality. If the UK’s private sector cannot in normal times provide decently paid jobs for all those willing and able to work, the state should step in with a public-sector job guarantee. That would immediately halve the number of Universal Credit claimants “searching for work” and, by eliminating Marx’s “reserve army of the unemployed”, substitute upward for downward pressure on wages.

Community-provided work, however dire, is more rewarding than a soul-destroying slog from firm to firm in search of non-existent jobs. Work is the ultimate escape from poverty, but the futile sort demanded by the UK’s benefit contract puts many of society’s weakest members on a path to nowhere.

Robert Skidelsky, a member of the British House of Lords, is professor emeritus of Political Economy at Warwick University. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour Party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999. Copyright: Project Syndicate, 2021.  

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