Chancellor's spending cuts - unemployed suffer further

Wed, 26/06/2013 - 16:21 -- nick

Chancellor George Osborne today released details of his most recent spending review, the review that shouldn't have happened.

When it came to power in 2010 the coalition believed its policies would lead us to a stronger economy, a confidence that has proven misplaced with growth going nowhere and unemployment falls grinding to a halt this year.

So the £11.5 billion cuts announced today are a cruel bonus, the dividend that came through failure.

The Chancellor, speaking to the House of Commons, trumpeted successes in jobs, with the private sector creating three times as many jobs as the public sector has cut.

If only the population wasn't growing, he must be thinking, the unemployment rate might even look respectable.

And there was no change of course on worklessness and benefits, even as new cuts and policies were announced.

We had a nod to the same divisive characterisation of the deserving - the old and sick - and undeserving - unemployed people and non-English speakers - poor, in an attempt to justify a raft of new welfare policies designed to bear down on the poorest in society.

The most radical of these was the new cap that will be put in place for benefits from 2015.

This will exclude Jobseeker's Allowance (JSA) and state pensions, but housing benefit will be included, taking money away from the large majority of workless people who live away from home. Future governments will need to ensure welfare costs keep within this or explain why they aren't.

The exclusion of JSA from the cap is welcome, but most unemployed people will suffer falls in income through the range of benefits that are included.

The benefit cap is doubly important because the Labour opposition has committed to sticking to the previous cap if it gets into power in 2015. The Shadow Chancellor made a welcome call for more government-funded job creation to as the best way to undercut a cap but the existence of it went unmolested by his rhetoric.

A number of other changes can be placed under the general title 'tightening the rules for JSA claimants', showing the government is still stuck ideologically in the belief that unemployment is the result of laziness and character flaws rather than its austerity cuts sucking money out of the economy.

These new policies include:

  • A new 'Upfront Work Search' programme which will demand unemployed people start looking for work from the beginning of their claim;
  • Half of jobseekers being required to attend their jobcentre weekly for support;
  • Non-English-speakers having benefits withdrawn if they refuse to learn the language; and
  • A seven-day wait for benefits instituted for all new claimants.

The last of these is the most concerning. A wait of seven days before an unemployed person can access JSA is apparently designed to ensure they spend their first workless week looking for work rather than going through a benefit claim.

But a person who spends a week without income isn't going to be focusing on jobseeking. They will have to be focused on finding money for food, on putting off creditors and generally fighting financial fires in their lives.

Perhaps those who go into unemployment holding savings or who have family support - we might guess at the kind of social backgrounds they might come from - can deal with that week without hardship, but that is unlikely to include the majority.

The savings that are supposed to accrue from this change have been put by the government at £230 million, and the size of this saving shows why it is so unnecessary.

If the waiting time for benefits rises only four days and saves so much, this surely shows that many people are getting another job within a week of becoming unemployed.

Why, the Chancellor might ask himself, does he want to punish these strivers?

Those who have children will need to start preparing for work when the child is three rather than five. But, again, those without family support are likely to struggle, and without a huge increase in childcare funding this policy is likely to erode both family life and the chances of the parent getting work.

An extra £50 billion of capital spending on new roads, railways and other infrastructure projects should help to boost construction job creation, and this is welcome. UnemployedNet has called on the government to prioritise job creation, and we would like capital expenditure to be brought forward to now when it is most needed.

It is unclear whether this will balance out the Chancellor's announcement that 144,000 further public sector jobs would be cut by 2015-16. This information was imparted with no thanks for previous service, no tributes to their commitment, just a cold statistic which encompasses none of the hardship this horrible news contained.

Ministers at the departments of defence, business, health, education and others have been fighting hard to protect their budgets, and we have heard stories of some, like Vince Cable, fighting into the night to head off more extreme cuts.

No such opposition seems to have been provided by Ian Duncan Smith, Secretary of State for Work and Pensions, if benefit cuts are any guide. A 9.5% cut in the DWP budget at a time when jobcentre staff will be asked to provide more support to unemployed people, and when extra money needs to be found for English lessons, looks very difficult, and the government must be hoping that the move to providing more services online, including benefit claims and jobsearch through Universal Jobmatch, are significant cost savers.

'Trust people to make their own decisions, and they will usually make better decisions' said Osborne when trumpeting an increase in Local Enterprise Partnerships' funding. We have used this same argument to promote the change to a voluntary Work Programme, which could save the government money through improving success rates, but this appears to be a saving too far for Osborne. The competition and freedom ideology of this government needs to be spread more widely to empower unemployed people to take charge of their jobseeking and support if it is serious about using the best possible methods to ensure successful outcomes.

The political cycle means the changes announced will come into force one month before the election in May 2015. The coalition is playing politics with the unemployed, challenging the Labour Party to back policies, including the benefit cap, that have a short-term populist appeal, or say why it won't.

The unemployed and other benefit claimants, again, will be the losers in this game.


Submitted by gdominey on

The Chancellor says that increasing the number days without benefit at the beginning of a JSA claim from 3 to 7 is because the job seeker should be looking for work rather than claiming benefit in the first week. However, this measure merely increases the number of Waiting Days from 3 to 7 AFTER the claim has been made.

The job seeker still has to sign on immediately they are out of work. They just have 4 extra days without being paid. If a person were to wait 7 days before starting their claim, they would then wait a further 7 days after their first date of claim before receiving JSA.

The Chancellor either knows this and is lying or he is lamentably ignorant.