Changes to a single universal benefit – bringing together income support, jobseeker’s allowance, employment support allowance, housing benefit, and child and working tax credits – follow the cuts in child benefit voted through at Westminster last week, aims at reducing the UK’s welfare benefits bill. The universal credit is an attempt to simplify the complex benefits system into one new single payment.
A report, by public policy expert Dr Jim McCormick, says the new universal credits system, to be introduced over the next two years, contains “serious design flaws” and will plunge far more Scots into poverty than expected. The Scottish Council of Voluntary Organisations (SCVO) warns one in four Scots will be living in poverty by the end of the decade if the coalition government forges ahead with “criminal welfare reforms”. SCVO chief executive Martin Sime said: “The UK government’s £2.5 billion cuts in benefits must be seen for what they are: an assault on families, communities and the economy of Scotland. These callous cuts masquerading as reform represent an active choice taken by the UK government, which is hurting the most disadvantaged people in Scotland.”
Universal credit is seen as an “all-or-nothing” reform, says McCormick, which means that getting payments wrong would leave people facing delays, errors or cuts to their only source of income. Women are at particular risk from the move to a single payment into households. John Dickie, head of Child Poverty Action Group in Scotland, said: “Time is running out for UK ministers to respond to the mounting evidence that any positive impact of the new universal credit is being fatally undermined by design flaws, underinvestment and a lack of advice and information support for the hundreds of thousands of families who will rely on the new benefit.”
A vision of a poverty-free capitalism was shared by many during the post-war years of steady economic growth. Some still cling to that forlorn hope. The need for an efficient system of ensuring that workers' very basic needs was one of the main motives behind the introduction of the welfare state. The return of world recessions has made the welfare state more difficult to finance out of sustained economic growth at exactly the time the burdens of poverty and unemployment placed increasing demands on it. Demographic shifts (such as the rise in the elderly and single parents) also increased the welfare burden for governments. Hence recent years have seen cutbacks in welfare payments and services in most industrialised countries on a scale that would have been considered politically unacceptable by Tories much less Labour politicians years ago.
It is unlikely that welfare services can ever be restored to what they once were. Capitalism runs on the profits made in the profit-seeking sector of the economy and most of the state’s income comes from these profits, either through taxation or through borrowing. The state is in this sense parasitic on the profit-seeking sector and which is presently in difficulty. The private sector's message to governments everywhere is that the proportion of national income commandeered by the state must be reduced if profits are to be restored to adequate levels. The hope of those on the Left to pay for expanding welfare services out of sustained economic growth is becoming increasingly remote. The welfare state of the future is likely to be only a shadow of what it once was.
It is another demonstration that the reforms promised by politicians in order to obtain votes, far from removing the problems that they claim to remedy, merely ameliorate them at best. The social problems that give rise to reforms—in welfare as in other spheres—are inherent to the capitalist system and can only be ended by ending capitalism. To fight the same old welfare reform battles over several decades is demoralising enough, but when previous reforms are put into reverse the case against the system is stronger than ever.