Tagged: benefit system

Iain Duncan Smith’s delusional world of welfare reform

This article was written by Polly Toynbee, for The Guardian on Tuesday 12th August 2014 05.00 UTC

Politicians may deal in terminological inexactitudes, but I can’t think of many black-is-white, war-is-peace practitioners as downright deceptive as Iain Duncan Smith.

Originally, the question was whether to put it down to simple stupidity, as he didn’t understand that the numbers he promised were impossible. Yesterday, poring over his big speech on welfare reform, a few of the more polite experts spoke of his “magical thinking”. But his motives and state of mind hardly matter to the millions affected by his evidence-free, faith-based policy-making.

 His speech was a paean of self-praise. To read it, no minister has done such good for so many. This was a sublime response to a battery of critics who include Treasury briefers, the National Audit Office on the failure of his work programme, the chair of the UK Statistics Authority for his abuse of figures, and the Major Projects Authority awarding his universal credit an amber/red warning.

The man does have indefatigable self-confidence: “We are fixing society,” he says. The Times, Sun, Mail and Telegraph happily swallowed it whole, rather than explore the thickets of his benefit system. His great claim is that his reforms have been the key driver in getting people back to work.

Let’s start with where he’s right: this recession has been unlike any other, as employment fell by far less and now grows by far more than economists can explain. Fraser Nelson, the Spectator editor, eagerly backed the view that IDS’s big stick has been the “game-changer”.

But Jonathan Portes, head of the National Institute of Economic and Social Research, formerly Treasury and a Department for Work and Pensions economist, makes mincemeat of the claim. Comparing numbers with charts over time, he concludes: “The idea that those on JSA are getting a job more quickly than before the recession, let alone that welfare reform has anything to do with it, has no support in the data.”

When it comes to the sick on employment and support allowance, numbers fell steadily from 2004, rose a bit in the recession and were starting to fall on trend. But now they’re rising again. Why? Portes says it’s “the result of the administrative chaos surrounding the Atos contract for the work capability assessment”.

Duncan Smith takes credit for one of Labour’s successes: Labour raised the number of single mothers into work from 46% to 58%. He says it’s higher than ever now, which is true – but only up by 2 percentage points in his time. He hurls accusations at Labour’s welfare bill: welfare expert Declan Gaffney says Labour cut the bill and kept it stable as a proportion of GDP – until the crash. It peaked in 2012 on IDS’s watch.

His universal credit was due this April to cover a million people: so far it covers just 16,000 easy households with no children, writing off £130m in failed IT. But you would never guess when IDS says it “completes the cultural shift”. Rolling many benefits into one doesn’t magically simplify them: the online form, 50 pages long, still needs to record every changing detail of every member of the household in real time.

Better incentives? Donald Hirsch, economist for the Joseph Rowntree Foundation, finds that on universal credit, families who work full-time can easily end up with less than if they worked part-time. Worse, it traps mothers at home: if one partner works, the second gains virtually nothing by taking a job. Nor does Duncan Smith say that 65p is cut from every extra pound earned. Raising income tax thresholds for the low-paid hardly applies to those on universal credit: most of the gain is lost as their benefit is cut back.

There are traps, hazards both moral and practical, in any benefit system. These deserve debate – but IDS prefers falsifications of reality. The bedroom tax, he says, is imperative. He doesn’t say that only 4% or 5% of people have moved as a result, the rest taking a huge hit, sending them to loan sharks and food banks. Nor does he tell of the doubling, by next year, of the number of working people drawing housing benefit, due to soaring rents and falling pay.

Take the disaster of his 20% cut and transfer of disability living allowance into personal independence payments (PIPs). Forced to delay existing cases to after the election, that’s a nasty gift of 3.6 million assessments for his successor. But worse, people applying now are held in a long backlog, often very sick.

Macmillan Cancer Support, campaigning hard about waits of over six months for benefits rulings, mentions one typical case: a 25-year-old father with advanced cancer waiting for PIP has almost no money. His wife has had to work while he cares for their baby. Without his PIP, he waits for carer’s allowance, severe disability premium, escape from the bedroom tax, bus pass, taxi cards to get to hospital and heating grant. Latest figures show only 24% of claims have been processed; the rest wait, and some claimants die waiting.

There is a lot of misleading talk about sanctions,” Duncan Smith says. Indeed there is, by him. Any benefit system has to prevent fraud or idleness, but he must know how his Jobcentre Plus offices have become sanction factories, his staff under unbearable pressure to cut people off. Research by Inclusion finds an unprecedented gap between the number of unemployed and those drawing JSA – invisible people living on thin air.

Last week the Guardian reported the tragic death of a diabetic former soldier, sanctioned into starvation. Go to any food bank and you’ll find heartbreaking cases. Every week, my inbox tells of people struck off unjustly – the latest, Jim, was sent on a course by the jobcentre then struck off for not signing on, as if he could be in two places at once.

Tricks abound as staff are forced to hit targets called “spinning plates”. With George Osborne taking another £12bn cuts after 2015, it’s possible Duncan Smith doesn’t know the abominations he oversees.

> Oh, I’m sure he does know, and probably revels in it. After all, he kept his job in the recent reshuffle despite everybody knowing he is incompetent – he probably now believes he can do anything, without personal consequences.

Source – Welfare News Service,  12 Aug 2014

http://welfarenewsservice.com/iain-duncan-smiths-delusional-world-welfare-reform/

Unemployed Britons To Blame For High Levels Of Immigration, Says IDS

> Call the nurses – he’s got out of his padded cell again…

The UK is attracting high levels of immigration because the benefit system in allowing too many British born people to escape work, says Iain Duncan Smith.

The Secretary of State for Work and Pensions will further demonise benefit claimants in a speech on Monday. He will say that immigrants are coming to the UK because unemployed Brits are preferring to live on benefits, rather than accepting the jobs on offer.

 In a speech to be delivered to an audience in London, Iain Duncan Smith will say:

Immigration into the UK is a supply and demand issue. Businesses needed the labour and because of the way our benefit system was constructed, too few of the economically inactive took the jobs on offer.”

He will add: “This economy can never be where it should, holding its own in this tough world marketplace, unless British families play a full productive part in that plan.”

> Situation normal – “Its not our fault, it’s yours. And we’re going to punish you for it.”

Iain Duncan Smith is also expected to say that the government’s welfare policies have cut social security by £2.5 billion. However, the claim is highly contested by Labour who argue that the government has over-spent on social security by as much as £13 billion.

Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, said:

David Cameron’s government has failed to control social security spending and is set to overspend on welfare by a staggering £13 billion.

“Under Iain Duncan Smith housing benefit spending is rising, not falling. The number of working people claiming housing benefit is set to double between 2010 – 2018 costing every British household £488.

“The Government’s flagship welfare reforms are in chaos. Millions of taxpayers money has been wasted on the £12.8billion Universal Credit which less than 7000 people are claiming.”

The Conservative Party is expected to pledge more cuts to welfare spending in their 2015 election manifesto.

The right-wing think tank Policy Exchange, who have close ties to Number 10, are also calling on the Tories to reduce the £26,000 benefit cap outside of London and the South East.

> IDS has obviously lost the plot,  he may well be insane. But all his nonsense will be lapped-up by the right-wing press, trumpted by Tory MPs  ever eagre to put the blame elsewhere…  and in a minute Milliband will be along to promise to be even harder on the worst off, because that appears to be his idea of politics.

How much longer can it go on ?

Source – Welfare News Service, 11 Aug 2014

http://welfarenewsservice.com/unemployed-britons-blame-high-levels-immigration-says-ids/

Messed Around By The Benefits System And Made To Feel Like A ‘Scrounger’

Hello, I thought I would let you know about various issues we have been having with the benefit system.

I am a 48-year-old who is very unwell. I suffer from Chronic Inflammatory Demyelinating Polyneuropathy. It’s a cross between M.E and M.S and causes terrible pain all over my body. My mobility is very poor and I have had several operations on [my] stomach due to severe problems. I also suffer from I.B.S and have seizures.

Things have become so bad that my husband has had to give up work to care for me, because I cannot be left on my own for any length of time. I need help in doing most things.

 I first started having problems with the benefit system when I gave up work and tried to claim benefits. I got turned down and had to take it to an appeal to get anything. This was bad enough, but it was nothing like we have faced over the last few years.

I was called in for a medical [assessment] three years ago, which was cancelled twice as they did not have the staff. Once we were not told it was cancelled until we had got there. I got my Employment and Support Allowance (ESA), but then about eighteen months ago I was called in for yet another assessment.

I went to the Luton office as instructed to do so. On arrival, I was then told I would have to go as I was in my wheelchair and that if there was a fire I would not be able to get out of the building. The medical [assessment] office was on the top floor. When I was asked what I should do, and could they put something in writing to say I had attended, I was ‘tutted’ at and told to wait.

In all I was kept waiting for twenty minutes, to which I pointed out [that] they could have done some of my assessment in that time. I was advised to go home [and that] it had been noted I had attended, even though they would not give me anything there and then in writing. I would be sent another appointment and advice on what to do next.

Three days later a letter arrived giving me another appointment, but again is was for the same place. I called and explained [what had happened previously] and was told this was an error and not to go – another appointment would be sent.

Another letter arrived, but again stating to go back to the Luton office. It was a nightmare and caused a lot of upset and stress. In the end, a month later, I was sent an appointment to go to another office twenty miles away. I am pleased to say my claim was upheld.

But, I am sorry to say, that was not the last issue we have had. Last year I got another form to fill in for my ESA. My husband and I eventually [completed] the form and sent it off by recorded post (I have learnt not to send anything that cannot be traced). After two months I had [still] not heard anything, so I called them to find out what was going on. I was told they had received all my paperwork on July 18th 2013 and [that] I would hear back within the next two months. Again I waited [but] by end of October [I had still not] heard anything, so I called [them] again to be told they could not find anything. I was very upset, and yes angry, about this and pointed out that I had already been told it had been received on July 18th, All of a sudden it was found. I was told should hear [something] by the new year. [To date] I have had nothing back from them and as I am still getting my ESA I have [decided] not to rock the boat. I just hope no news is good news and [that] I carry on getting my benefits.

I was advised whilst all this was ongoing, that my husband was entitled to a little bit of Income Support. We applied, received a letter saying he would get about £8 a week paid monthly and advised to check to see if he was entitled to any back-pay. We did this and wish we had not. It led to a number of phone calls from the manager of Luton Jobcentre asking why we had passed things on to my MP. I told her I had done this as I was not getting anywhere in getting the money paid to my husband, which we had been told he was entitled too.

After a couple of days Alan [received] a payment but was told that there was no back pay. Again, I questioned this. Another very nasty call from Luton Job Centre, the manager again told us that we had caused a problem, to which I asked why, and got no proper answer.

She then said she was going to stop the income support that was going to Alan. I asked why and could she do that? To which she said she could, and would do it, and if we wanted to do anything about it we would have to stop our ESA claim and put in a joint claim for Income support, but it could take up to sixteen weeks and whilst it was being looked in to we would get no money. Well,.. of course we cannot do that, so we are losing out on the small amount of income support we should and did get for a short time. This seems very unfair. If we are entitled then we should get it, surely?

I dread a brown envelope coming through the door and am desperate and very worried about the changeover from Disability Living Allowance (DLA) to Personal Independence Payments (PIP). It’s already causing worry, stress and sleepless nights.
I do not know what we will do if it is stopped for any reason as I cannot go to work. I did not choose this, the [medical[ conditions chose me. I had a good job in a company I loved working for and I did not want to go on benefits.

Like many people, I am made to feel unworthy and nothing but a scrounger.

Sorry this is all a bit long-winded, but I feel [like] I wanted to get as much information down as possible. I know there are plenty [of] others that are in a worse situation because of benefits being withdrawn. My heart really goes out to them.

If, like us, you are deemed to have a spare room, that is another worry, upset and obstacle to cope with.

This government will not be happy until we have all starved, frozen to death or back in the workhouses of the Victorian era.

We have also had to go cap in hand twice to a food bank, and I often just have soup and 2 slices of toast in a day. I try to do my best, but things are so expensive and it is very hard. I feel terrible that my illness has such a negative knock-on effect on my husband and son, as many others do. I wonder if my family would be better off with out me?

Thank you very much for taking the time to read all of this.

Alyson Fletcher

Source – Welfare News Service,  17 May 2014

http://welfarenewsservice.com/letters-messed-around-benefits-system-made-feel-like-scrounger/

Extended Benefit Sanctions Push Up Numbers Seeking Advice On Paying Bills

This article was written by Patrick Wintour, political editor, for theguardian.com on Monday 14th April 2014

There has been a 60% spike in the number of people seeking advice about paying bills as a result of increases in the length of benefit sanctions, according to the Citizens Advice Bureau (CAB).

 It came as the Department for Work and Pensions (DWP) published a new survey showing that women make up four in five people losing money from the £500-a-week benefit cap. Almost all have dependent children and 83% have three or more.

A year after the limits were introduced, Ipsos Mori research found a third of people affected have been forced to cut back on essential items. Around 25% have looked for a job after being hit by the cap, while 45% plan to do so in future. The survey looked at 1,000 people out of more than 38,600 households that have been caught by the new rules.

The government extended the period Jobseeker’s Allowance (JSA) is withheld from one week to four weeks last October. There have been repeated reports that JSA claimants feel they have suddenly lost benefit on the basis of arbitrary decisions for which they have been given no warning or little explanation.

An independent review of the sanctions regime commissioned by DWP is yet to be published, but the latest CAB figures suggest there is an urgency to the issue that ministers have yet to grasp. Polls suggest the DWP would feel under little pressure to soften any aspect of the welfare regime.

The CAB – which is a free advice service – said that since the sanctions regime was toughened, it has helped clients with over 15,000 JSA sanction problems. The increase in the numbers seeking help is disproportionate to the increase in the number of sanctions being applied by the DWP.

Under the previous one-week sanction claimants could cope, the CAB said, but a four-week withdrawal of access to benefit led people into desperate measures including approaching loan sharks.

Publishing its research, the CAB said: “People are struggling to pay their bills, rent and put food on the table. Many clients are forced to turn to food banks and even payday loan companies. With all this on their plate people are distracted from looking for a job, so they’re less likely to get into work.”

The CAB said: “From October to December last year one in four Citizens Advice clients with a JSA sanction problem had dependent children, one in four identified as being disabled or suffering from a long-term health condition, one in six also had a debt problem, and one in 10 had issues with rent arrears or threat or reality of homelessness.”

The chief executive of CAB, Gillian Guy, said: “The minimum four-week sanction is setting people up to fail and creating a barrier which can stop them from looking for work. Four weeks is a long time to go without money to get by and people are struggling to make ends meet.

“The success rate of sanction appeals reveals a culture of ‘sanction first and ask questions later’. This is not only ineffective and a huge waste of money but also has a devastating effect on thousands of people’s lives.

“People need a system that can take into account their situation, set suitable work search requirements and, where necessary, apply sanctions at a level that won’t limit their chances of employment.

“To date, work programme contractors have been responsible for twice as many sanctions on the people referred to them as they have successfully helped people find work. Combined with CAB’s latest figures this paints the strongest picture yet that the system is not working as it should.”

CAB pointed out that under universal credit – the new benefit integrating many existing benefits including JSA – Jobcentre staff are to be given greater flexibility in deciding the length of benefits. The CAB asked how it was possible to give staff flexibility for the incoming benefit system, but not for the current one.

Case study

Ian is a 43-year-old single father of two (aged nine and 12) living in Hastings. He has been on long-term sick leave for depression but, following a work capability assessment by Atos, was told he did not have enough points and was moved onto JSA.

Ian was put on to the work programme, though due to a staff mix-up by Pertemps he has not been receiving support to find work. He has been filling in his work-search forms and giving them to the Jobcentre. Then last Thursday Ian was told he had been given a four-week sanction for not giving enough work-search detail. He was told there were six cleaning jobs for which he could have applied, but he said that they were early morning jobs that did not fit with his responsibilities to his children.

He was given no notice or warning that he was doing anything inadequate about his work search. The money – £72 a week – just didn’t appear.

“I’ve been left high and dry. I filled in the work-search form as usual, but this time they’ve said it’s not enough. Thursday/Friday I was at rock bottom, I was in a total state. I was just thinking, where am I going to get money from?

“I had a water bill due on Friday, but the direct debit bounced as no money had gone in. I’m worried about my rent, as I don’t know if my housing benefit will come in now I’ve been sanctioned. Then at 5pm on Friday I got a hardship payment through so I can look after my kids. The crux of the issue is that they should give you some warning or notice that they are going to deduct some money. Otherwise the only two options at the end of the day are to borrow money or commit a crime.”

He adds that he took out a £100 emergency loan that will require repayment of £160. Ian is appealing his sanction, as he has a letter from Pertemps stating he has not been getting the support he should have due to an administrative mix-up.

Source – Welfare News Service  14 April 2014

http://welfarenewsservice.com/extended-benefit-sanctions-push-up-numbers-seeking-advice-on-paying-bills/

Church Leaders Slam “Punitive” Welfare Cuts As Half A Million Left To Go Hungry

27 church leaders, including a number of Anglican bishops, have slammed coalition benefit cuts and “punitive” sanctions in an unprecedented attack on the government’s welfare policies.

In a letter to the Daily Mirror, the church leaders warn that “one in five mothers report regularly skipping meals to better feed their children” and others are having to face the unenviable decision between eating and heating as “food prices have gone up 30% in just five years”.

The church leaders argue that half a million people are having to turn to food banks to feed themselves as their families, and that it was time for society to “face up to the fact that over half of people using food banks have been put in that situation by cut backs and failures in the benefit system”.

According to the signatories of the letter “5,500 people were admitted to hospital in the UK for malnutrition last year”.

They say that there is a “moral imperative” for society and the coalition government to act on food poverty and take immediate action to “make sure that work pays, and to ensure that the welfare system provides a robust last line of defence against hunger”.

The letter sent to the Daily Mirror reads as follows:

“Britain is the world’s seventh largest economy and yet people are going hungry.

“Half a million people have visited food banks in the UK since last Easter and 5,500 people were admitted to hospital in the UK for malnutrition last year.

“One in five mothers report regularly skipping meals to better feed their children, and even more families are just one unexpected bill away from waking up with empty cupboards.

“We often hear talk of hard choices. Surely few can be harder than that faced by the tens of thousands of older people who must “heat or eat” each winter, harder than those faced by families whose wages have stayed flat while food prices have gone up 30% in just five years.

“Yet beyond even this we must, as a society, face up to the fact that over half of people using food banks have been put in that situation by cut backs to and failures in the benefit system, whether it be payment delays or punitive sanctions.

“On March 5th Lent will begin. The Christian tradition has long been at this time to fast, and by doing so draw closer to our neighbour and closer to God.

“On March 5th we will begin a time of fasting while half a million regularly go hungry in Britain. We urge those of all faith and none, people of good conscience, to join with us.

“There is an acute moral imperative to act. Hundreds of thousands of people are doing so already, as they set up and support food banks across the UK. But this is a national crisis, and one we must rise to.

“We call on government to do its part: acting to investigate food markets that are failing, to make sure that work pays, and to ensure that the welfare system provides a robust last line of defence against hunger.”

Source – Welfare News Service, 19 Feb 2014

How the UK government hid 1 million jobless from unemployment figures

This is a few months old, but well worth reprising…

One of the purported achievements of the Coalition government’s disastrous economic policy of austerity, has been the unemployment figures.  Pundits say that at 7.8% (2.51m) they are nothing to shout about but not the disastrous rates seen in states such as Greece (26.9%) or Spain (26.3%). In reality, the unemployment rate is more than double this in many areas, while those in employment are facing ever worsening conditions to retain their non-jobs.

We have the Thatcher government to thank for the majority of the statistical trickery which currently renders the government released unemployment figures redundant.  Prior to 1979, the unemployment rate was anyone registered as unemployed, this was converted to a percentage of the total workforce and that was the published unemployment rate.  Then some changes came in:

  1. Redefining Unemployment:  originally defined as those ‘registered’ unemployed, changed to only count ‘claimants’ – this obviously reduced the number greatly as many unemployed people do not, for various reasons, claim benefits.
  2. Cutting Benefit Entitlements: By making changes to the benefit system (who is eligible and not) the government can magic away unemployment numbers by simply removing eligibility for benefits.  If the person cannot claim, they are not classed as unemployed.
  3. Training Schemes & Work Programmes: the conservative government of the 80’s began to double count those in training & work programmes.  First, they excluded them from the unemployed figures, then they added them to the total workforce figures – this means that simply by recruiting people into a work programme, the government has reduced the unemployment figures.  Prior to Thatcher, these schemes were not counted as employment.

The Thatcher government was able to show a drop in unemployment of 550,000 in July 1986, and 668,000 in 1989 by transferring those unemployed into work programmes.  They also kept an average 90,000 unemployed under 18 year olds off the books by making them ineligible to claim benefits.

Sadly, none of these changes have since been reversed, giving the UK public a much skewed view of unemployment and underemployment.  If we look at the research prepared by other bodies without such downright deceitful exemptions, we reveal a more realistic picture of the economic woe being meted out across the country.

A study put together by Sheffield University last year set out to establish the real level of unemployment in the UK, given that there has been little change in the published unemployment statistic, we can suppose they still hold relatively true.  The study found:

  • For Britain as a whole in April 2012, the new figures point to more than 3.4 million unemployed. This compares to just 1.5 million on the claimant count and 2.5 million according to the Labour Force Survey – the government’s two official measures of unemployment. The difference is attributable to extensive hidden unemployment.
  • An estimated 900,000 unemployed have been diverted onto incapacity benefits. These are men and women with health problems who claim incapacity benefits instead of unemployment benefits. They do not represent fraudulent claims.
  • Hidden unemployment is disproportionately concentrated in the weakest local economies, where claimant unemployment is already highest. The effect has been to mask the true scale of labour market disparities between the best and worst parts of the country.
  • In the worst affected districts, the real rate of unemployment is often around 15 per cent. Knowsley in Merseyside tops the list with a real rate of unemployment estimated at 16.8 per cent.
  • The older industrial areas of the Midlands, the North, Scotland and Wales mostly have the highest rates of unemployment. In large parts of the south of England the rate is still only 3-4 per cent.
  • Comparisons with similar data for earlier years shows that Britain was still a long way off full employment before the 2008/9 recession. Full employment is now still further away and the real rate of unemployment is higher than at any time since 1997.
  • The report casts serious doubt on the likely impact of the Coalition government’s reforms, notably the Work Programme and Universal Credit, which are founded on the assumption that unemployment can be brought down by encouraging the unemployed to find work. The evidence points to large and continuing shortfalls in job opportunities away from the most prosperous parts of southern England.

One of the more worrying points in the survey is the widening gap between ‘claimant count’ and unemployed , as ever increasing numbers of people fund themselves without a job or eligibility to claim social security.  For this expanding pool of people, exploitation beckons.

The government is pressurising people into ever more exploitative work programmes in order to reduce unemployment figures by threatening withdrawal of social security for non-compliance.  In 2011, the Conservative and Liberal Democrat coalition government announced a plan to increase uptake of Workfare (the term given to these schemes) by 100,000.  They also made changes to the programme they inherited from New Labour as follows:

1. A jobseeker who leaves a placement after 1 week loses their welfare payments for 6 weeks.  If they do this a second time, they lose them for 13 weeks.  The third time, three years.

2. Placements can be mandated for up to 30 hours a week for as long as 6 months.

3. The scheme has been opened up so corporations in the private sector can exploit this taxpayer funded, forced labour.

This means that someone who finds themselves unemployed must work up to thirty hours a week, for up to six months at a time, stacking shelves for Tesco or Poundland simply to receive as little as £53 per week, which they are already entitled to as part of the social contract of Britain.  Also, Tesco isn’t paying the £53; we are, through our taxes.

Although an interview is supposed to be guaranteed at the end of the term, it is not required that the workfare provider has a vacancy open.  An interview for a job that doesn’t exist is no interview at all.

Corporations get free labour, the government gets to massage the unemployment figures (Workfare victims are counted as employed) and the unemployed get shafted.

Anyone doubting this critique would do well to read the findings of the DWP’s own analysis of the performance of their work programmes.  These schemes cost the taxpayer £5bn, yet only 1 in 10 people found employment lasting up to 3 months.  The figures are even worse for the sick and disabled people forced into the work programmes – only 1 in 20 finding lasting employment.

The picture doesn’t get any rosier for those who have managed to find employment either.

Employers are less likely to provide real jobs than ever.  As the market favours the employer, there has been an unprecedented month on month fall in wages through the entire 36 months of the Coalition government, and wages were already falling before they arrived.

On top of hidden unemployment, the UK also has an ever growing problem with underemployment; the case of people unable to find jobs with sufficient hours/pay to meet their needs.

A recent paper by researchers at the University of Stirling revealed that underemployment rose from 6.2% in 2008 to 9.9% in 2012. The rate hit 30% among 16 to 24 year olds.

We have also seen the rise of ‘zero hour’ contracts. Almost unheard of a few years ago, more than a million UK workers are now under these contracts.  These contracts have no specified working hours – meaning that an employee is placed on permanent stand by until or unless the employer needs them.  While classed as employed, the person has no wage security as they cannot guarantee their pay from one week to the next.  They also receive no sick pay, leave or other basic terms and conditions.

The Resolution Foundation recently published a review of ‘Zero Hours’ contracts which found serious issues of the spike in their use:

  1. Those on ‘Zero Hours’ contracts earn less than half the average wage (£236 vs. £482 per week) of those on proper contracts.
  2. Workplaces using ‘Zero Hours’ contracts have a higher proportion of staff on low pay(within £1.25 of minimum wage) than those who do not.

These factors have allowed the UK Labour Market in recent years to combine a relatively high level of employment and an unprecedented squeeze on wages.

  1. Those on ‘Zero Hours’ contracts work 10 hours a week less, on average, than those who are not (21hrs – 31hrs).
  2. 18% of those on ‘Zero Hours’ contracts are seeking alternative employment or more hours versus 7% of those in ordinary contracts

These factors have contributed to the rise in underemployment in the UK since 2008.  An ONS survey last year revealed more than 1 million people had been added to the rank of the underemployed since the 2008 bailout of the banks.

  1. ‘Zero Hours’ contracts are hitting young people the hardest, with 37% of those on such contracts aged between 16-24.
  2. ‘Zero Hours’ contracts are more likely to be held by those without a degree, and with a GCSE as their highest level of education.
  3. Non UK Nationals are 15% more likely to be employed on such a contract than UK Nationals.

It is not difficult to see the advantages of ‘Zero Hours’ contracts to employers – they can achieve maximum flexibility of their workforce, effectively retaining them on a pay as you go basis.  It is also clear that in the short term, the government of the day also enjoy the advantage of hiding the true effects of their cut throat economic policies.  But the ordinary human being seeking to meet the rising cost of living is losing on all counts.

Between 2008 and 2012, inflation rose 17% according to the Consumer Price Index, while incomes increased just 7% – this translates to a real terms pay cut of 10% for working people.  But the Consumer Price Index measurement tracks the rising cost of an imaginary list of products and services that the poorest workers are unlikely to ever buy.  The UK Essentials Index however tracks inflation of the bare essentials that would the poorest would buy – and these have risen by an eye watering 33% during the same period.  This means that not only is the impact of unemployment hitting the country disproportionately, but underemployment and exploitative employment conditions are too – with the poorest being the worst affected.

There was a piece on the Guardian this morning talking about the triple boost to the UK economy of increased factory output, house prices and car sales, and trumpeting this as a sign of economic recovery.

But what is the point of this increased GDP if it is won at the expense of people wages and livelihoods?  Surely, if the inequality in the UK between rich and poor is growing, unemployment is rising, underemployment is rising and wages are falling – this is a recession.  It speaks volumes for the broken economic measures of growth at play here that a real world recession for the majority, is applauded as a recovery, when all that is recovered are the profits for transnational corporations and incomes of high earners, most of whom pay little or no contributions in tax.

Get Involved

Boycott Workfare – get involved in the campaign to outlaw workfare

UKUncut – get involved in demanding proper tax contributions from those corporations benefitting from these nightmare employment schemes.

DPAC – Disabled People Against Cuts do extraordinary work highlighting the state’s assault on disabled people.  Please support them

Source – BS News,  07 Aug 2013