Link to this page: https://www.socialistparty.org.uk/issue/571/7063
End the 'benefits trap'
Fight for a living wage
IN JANUARY, two similar cases came before Liverpool Magistrate's Court. They both concerned women who had claimed benefits they weren't entitled to. Both were married to security guards; both had several children; both had separated from their husbands when they had claimed benefit, and had kept claiming when their husbands returned.
One, who lived on the Wirral (seen as the "posher" side of the Mersey) and who was overpaid £59,000, was told "Go back to your family... you are a good woman who works hard for your family." She was given a 36-week sentence suspended for two years.
The other woman lived in Norris Green; previous issues of The Socialist have described the desperate conditions for many on the Norris Green estates. She was paid £53,000, £32,000 of which she was entitled to. The judge accepted she had not spent the money extravagantly but said: "there needs to be a deterrent effect for this sort of offence." She was jailed for 18 months.
Bank presidents on £4 million a year - more than most of us would earn in five lifetimes - can be given billions in handouts in return for a pathetic "apology". But the law's harshest sentences bear down on those so desperate to feed and clothe their families that they try to use the benefits system in their favour.
The disgraceful disparity between these two women's treatment condemns the postcode lottery that faces many. It also highlights a growing feature of the lives of thousands: people forced to claim benefits just to make ends meet.
Meanwhile, the government is changing the rules, making it harder for people to get the benefits they are entitled to, and forcing people into low-paid jobs. Frank Field, Labour former welfare minister, says the government has not gone far enough. He says all young single people between 16 and 24 should have to work for their benefit, losing all benefits if they do not find work after a certain time.
Further, he says, if benefits claimants turn down a "reasonable" job offer, all their benefits should stop. What a prospect during a period of job losses and recession: a return to the darkest days of 1930s America, with camps of unemployed and the starkest poverty.
Field and the government spread the lie that people do not want to work, that the young unemployed are work-shy. The truth is far more disgraceful. Thanks to the government's tax credits system, a culture of massive subsidy to employers has grown up.
Employers know they can pay the lowest wages possible as these will be enhanced by tax credits. Money we pay in taxes will be used to compensate the low wages paid by employers and boost their profits. Rather than raise the minimum wage to a living level, the government makes the poorest pay for capitalism's problems.
The "benefits trap" shows how far wages have sunk. For many, coming off benefits and into work can mean a substantial drop in income. Although benefits rates are set as low as possible, many employers pay below these rates. No wonder many workers, whose priority is feeding, clothing and housing their families, are forced to stay on benefit rather than go into work.
Research by organisations such as the Citizens Advice Bureaux shows that most people asking their advice on returning to work would either be no better off at all, or only marginally so. A major government target is single-parent families, with draconian methods used to force single parents back into work.
However, while a single parent on Income Support with one child would be around £2 - £3 a week better off working and claiming Tax Credits, they could lose Housing Benefit and Council Tax Benefit. Their rights to other benefits such as free school meals would be lost, and they would face the extra costs of travel to work.
Similar problems with Housing Benefit and Council Tax Benefit apply to people on long-term incapacity benefit. Returning to full-time work would leave many thousands of people on Incapacity Benefit worse off working than staying on benefit.
Another problem faced throughout industry is that of short-term contracts. This growing feature of employment leaves thousands working with no certainty as to the future and unsure of having a job at the end of the year.
For workers who come off benefits, there is the fear that, given the slowness of the benefits system, there would be some time before they get any benefits at all when their contract finishes. Even worse for people on Incapacity Benefit or Disability Living Allowance; re-applying after a period in work could see their benefits refused completely, leaving them worse off than before they started work.
Many people on benefit find themselves in debt with catalogues, credit cards, etc. While someone is on benefit, many creditors will accept a token repayment of these debts; if working, however, creditors tend to demand a much higher repayment rate, reducing an individual's available income even more.
All these facts show that people are often no better off on benefits than working. They are a condemnation not just of the paltry level of benefits, but of the scandalously low level of wages. Just an 'overhaul' of the benefits and tax credit systems will resolve nothing.
We must demand the right to a living wage or benefit. Scapegoating the poor and those on benefits, the TV adverts criminalising people desperate to make ends meet, are part of a government campaign to make the poorest pay for capitalism's crisis. The real criminals get away with a slap on the wrist and billions of pounds poured into their coffers.
In The Socialist 19 March 2009:
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