Like their European counterparts, the British bourgeoisie and its new coalition government faced with a massive deficit have unleashed an unprecedented attack on the benefit system. On 22 June George Osborne initially announced an £11 billion cut in an emergency budget trying to find £40 billion worth of ‘savings’ over the next six years.
On October 20 this budget will be consolidated with a further range of attacks in a Comprehensive Spending Review. Alongside these massive proposed cuts will be the biggest ‘reform’ of the welfare system since the 1940s. Under new proposals which will be introduced as a white paper in a matter of weeks, the present framework for claiming benefits will change completely. Welfare benefits for the unemployed and low paid will be brought together under a new universal credit system planned by the government. The aim is to move everyone off the old benefit system over the next 10 years.
Disability living allowance (the main target for the cuts) would be separate from ‘universal credit’ with the new system allowing carers to take part time or short time work. Here, the government is deliberately separating these cuts as they will make it almost impossible to claim these benefits. These changes are being brought in to tackle perceived long-term welfare ‘dependency’ by unemployed workers. In a touching note of concern Iain Duncan Smith said that the long term unemployed and sick would be “better off working than depending on benefits.” The reality is that this new government wants to cut the benefit system to the bone. Osborne and Duncan Smith “agreed on an affordable investment package to reform the welfare system which was ‘broken and wildly expensive and often traps the very people it is meant to help’” (BBC online 3/10/10)
After detailed examination of the budget measures, the Institute for Fiscal Studies said that the UK faces the longest, deepest sustained period of cuts to public service spending since World War II. It is the first time that a British government has proposed six consecutive years of spending cuts.
The government has targeted the public sector, imposing a wage freeze for the next two years with a projected job loss of 725,000 jobs planned over the next five years in the sector. This and an increase in VAT from 15% to 17.5% - an increase designed to help pay for the budget deficit - will ensure that there will be a massive increase in unemployment. The government understands this and wants to have the right type of ‘universal benefit’ ready for those thrown onto the scrapheap of unemployment.
We can see that the most important target of the government cuts is the massive cost of the benefit system, in particular invalidity benefits and housing allowances.
One million people face eviction from their homes. 900,000 people in private rented accommodation will lose their housing benefit under Osborne’s plan to cut housing allowance in this sector by 40%. If you are living on benefits then it’s obvious that it is impossible to pay that rate of short-fall in your rent.
Labour’s former Chancellor Alistair Darling has said that Labour would have not made such drastic cuts. He’s a liar! Labour had already promised across-the-board cuts of 20%. In addition some 70% of the fiscal consolidation measures contained in Osborne’s budget had already been identified by Labour and were in train when the coalition came to power. Across the whole political spectrum of the bourgeoisie there was no secret of the need to make such drastic cuts. And it was always clear that they would hit hardest the poorest and most vulnerable sectors of the population:
• Workers receiving Job Seekers Allowance who have claimed for more than 12 months will have their Housing Benefits reduced by 10% from 2013.
• Non-dependant deductions will increase, this is the deduction made to housing benefit when there are adults staying in the household, including grown up children.
• Disability Living Allowance (a notoriously difficult benefit to access) will be subject to more stringent medical assessment. Its here that there will be a wide scale reduction in those claiming this allowance.
• Child benefit will be frozen over the next two years.
• Child tax credits will be reduced; currently families earning over £40,000 a year will lose their entitlement. In 2012 this upper limit will fall to £30,000 and those earning £25,000 will experience a benefit cut (most families with two or more earning will have an income over £30,000).
• All welfare benefits will increase by the consumer price increase rather than the retail price index which will effectively lower the value of any increase.
The British bourgeoisie has no choice but to carry out these attacks. They are the most savage since the 1930s. The same attacks are being conducted around the world as capitalism attempts to make us pay for their crisis.