Capitalism isn’t Working

The government’s Universal Credit scheme will replace housing benefits, jobseeker’s allowance, tax credits, income support, employment and support allowance with a single payment, there will a maximum of £350 per week (including rent) paid to single claimants and maximum of £500 (including rent) for a family of no matter what size. Meaning a family of three and family of ten will get a maximum of £500 (including rent) a week.

Families with children are the new hate-group. Blogs and comment sections of the newspapers are full of Malthusian bile about there being too many people in the world and how people who can’t afford to have children shouldn’t have them, so initially the government thinks it won’t get too much flak for reducing the standard of living, health and life chances of families with children.

They also think they won’t get too much flak, at least altogether in an organised way as this new universal credit scheme won’t come in for everybody at the same time. It will first be “piloted” in parts of north-east England from next April 2013.

The northeast takes in a lot of poor areas with high unemployment but rents are much lower than they are in the south east and only families with children are likely to see a real drop in income. And families with children don’t count as the whole Malthusian faux left who read The Guardian to the Daily Mailers all hate them.

To go back to Universal Credit. Six months after the Northeast pilot, in October 2013, Universal Credit will come into force across Britain for new claimants. Existing claimants will be transferred to the new Universal Credit system in stages up until 2017. By that time Tweedledee may have replaced Tweedledum and this new system may have been replaced by some other benefits cutting plan, but let’s continue looking at Universal Credit for now.

£350 a week welfare (including rent) really does not represent a drop for most single claimants even in London living in a private flat (most of it would go on the rent of course); but £500 a week (including rent) is a real threat to families with children living in the south east (and a few other high-rent spots) . Families with children require a bigger flat/house and a private rent in London would really eat away at the £500 a week, leaving very little over.

What’s a poor unemployed family in London to do? Well sit tight is one option, economise on food, heat and clothing and hope an adequately paid job (or two) will turn up. Move to a smaller  cheaper flat (with too few bedrooms for the number of children). Another option is to move well away from London to Oldham or some other low-rent town (though the jobs will be pretty thin on the ground), or fourthly there is the subversive option (and only works if the family is two parent): in this scenario the parents can officially split up, divide the children between them, rent two different flats and collect a maximum of £500 for each separated parent making a total of £1000 Universal Credit between them; granted most of that would go on the two rents, but there would still be about double the money for food, heat and clothing.

It will be interesting to see when Universal Credit comes in how people with children begin to shift the pieces round the chessboard so they can manage.

News might seep out slowly as opposition to Universal Credit is likely to be muted, partly because it is being introduced in dribs and drabs and partly because it will affect different groups very differently.  Clever bit of Divide and Rule on the part of the bourgeoisie.

A couple of other benefit changes coming in next April (2013) might make more noise. The cutting or removal of council tax benefit has not attracted much attention, It seems pensioners will still get council tax benefit on the present basis, but everyone else (and that includes the working poor as well as the unemployed and disabled) will get their council tax benefit seriously reduced. As this cut is being introduced in one fell swoop, it has a potential to unite, or at least focus the mind.

As for housing benefit, it is being removed completely for under 25’s unless they have a child, whether the threat of being forced to go home to Mummy, sleep on some-one’s floor, (or even out in the street) might make some under 25’s decide to have a quick baby remains to be seen, but it may.

There is another cut to housing benefit; anyone previously on full housing benefit who has an extra bedroom will get their benefit reduced. This largely affects older tenants whose children have grown up and left and some people see this cut as fair because there’s a housing shortage. But please whose fault is it that there is a housing shortage, not the granny with an extra bedroom that’s for sure, and as there is a housing shortage, even if granny would be OK about downsizing how can the granny move into a smaller council flat when there aren’t enough of them to go around either

The one and only answer to the housing problem is more housing, either by building new housing or renovating unused housing. The government is talking about private companies being encouraged to build a few tens of thousands new “units” This country needs 3 million new homes and it needs them now. What the country is actually getting is lots and lots of cuts.

Capitalism anyone? No thanks, it doesn’t work.