Archive article from The Socialist Issue 380
Incapacity benefit: New Labour hits the poor and vulnerable
THE GOVERNMENT'S own survey showed last year that only 0.3% of the Incapacity Benefit paid in the UK is fraudulently claimed. You wouldn't think there would be much room for cuts in those figures. But New Labour plans massive cuts in the Incapacity Benefit payment system.
It's not easy to get Incapacity Benefit. Last year 2.7 million people applied for it, but only just under 1.5 million received it. A recent TUC study shows that the vast majority of those receiving Incapacity Benefit are either too ill to work or people whose health problems make employers pass them over as job candidates.
Incapacity Benefit is paid at three rates, starting at just £55.90, rising at the six-month point and then rising to £74.15 after a claimant has been on the benefit for a year. With additional allowances, the average payment is £84.51 a week.
New Labour intend to put all claimants back on £55.90 a week. An extra payment would go to those who could prove they were actively seeking work. A fixed 20% of the most severely incapacitated claimants would receive a top-up, so their total benefit would be higher than the current rate.
Cuts in Incapacity Benefit would cause severe hardship. As a proportion of average earnings, incapacity benefit is already extremely low. The rate for a single person fell from 17.4% of average earnings in April 1995 to 15.2% in April 2003. Nor is Incapacity Benefit a growing problem for government. The number of those receiving Incapacity Benefit has fallen by almost 400,000 since 1995.
No one wants to be on Incapacity Benefit. The vast majority of those on the benefit worked for years and once out of work, a significant number suffer from depression. That makes it even harder to get work - where there is any. So do long NHS waiting lists.
Unsurprisingly, the areas that have seen the most dramatic loss of jobs over the past 20 years are those with the highest level of Incapacity Benefit - areas of South Wales, Glasgow, Yorkshire, Durham and Liverpool.
According to a Merthyr Tydfil council report from 2004, "approximately 30% of the population (of Merthyr) have a long-term limiting illness". Those actually receiving Incapacity Benefit number 10,000 out of a population of 56,000, which amounts to 22.8% of those of working age.
This earned Merthyr the title of "sickness capital of Britain". But Merthyr's figures are matched by 22.1% in Blaenau Gwent and 23% in Easington in County Durham. And of course, where underemployment is high, those with health problems have even less chance of getting a job.
New Labour claim that they want to remove "disincentives" to people getting jobs, but they themselves admit that Incapacity Benefit fraud is almost non-existent. In fact, they are simply further impoverishing some of the poorest and most vulnerable people in society.
All out 23 March leadership wriggle over pension action