The new Work and Pensions Secretary Stephen Crabb will vow to tackle the “root causes of poverty” in a speech this Tuesday. This will come just a day after he introduces changes to universal credit- which take up to £2,400 per year from tens of thousands of hard-working British families.
Taking over from Iain Duncan Smith within just 13 hours, the pro-austerity, pro-EU ‘yes man’ was a no-brainer for the Conservative leadership. Cameron hopes Crabb’s working class background will authenticate branding him a saviour of the poor. From a council estate to the Conservative cabinet himself, he is the perfect person to sell the idea of “social mobility”.
However, this authentication is a total sham of monumental proportions. Crabb’s effortless audacity is likely the key to his appointment. He will champion a “relentless focus” on preventing poverty after taking up to £200 a month from hard working low paid people literally the day before. The gulf between speech and action has never been so wide. Crabb is shamelessly, hand-on-heart telling people he will tackle poverty, while increasing poverty by taking money from poor people.
And not just any poor people. Whatever your opinion on the flagship conservative argument that removing benefits gets people back to work, the position is totally void here. These people are already working.
What about Osborne’s ‘national living wage’?
The government will triumphantly thrust their so-called ‘living wage’ in the face of any criticism of austerity. A Department for Work and Pensions spokesman said:
We are simplifying the work allowances under universal credit and giving people extra help to progress in work. This is alongside the increase in the national living wage and personal tax allowances which are helping to move us to a higher wage, lower tax, lower welfare society.
The government argues that people can make up for the loss by working longer hours. However, Conservative policy is apparently so incompetent it is even oblivious to the number of months we have. The Child Poverty Action Group (CPAG) estimates that a full-time single parent on the new £7.20 ‘national living wage’ would have to work a 14 month year to make up for the cuts.
Perhaps because this so-called ‘living wage’ is another scam. The government has hijacked the buzzword ‘living wage’ and appropriated it onto their own substandard version:
- It is way under the real living wage of £7.85.
- It pretends London does not exist by offering the same pay in the capital. Due to much higher living costs, the real living wage is £9.15 in London.
- Arbitrarily, it is not applicable to under-25s. Despite poorly paid jobs typically being low-skilled – a few extra years will hardly make you better at stacking shelves.
Imran Hussain, the charity’s policy director, said:
Asking parents already working full-time to magic up more days in the year to recoup the cut just isn’t an option.
The chasm between governmental policy and the real world grows larger by the day. These people are already working full time, yet the motivation is apparently to make them work even more. A motive so at odds with reality seems quite unbelievable. The cuts will net the treasury a projected £3bn per year until 2020. It is more likely these cuts are to help pay for the juicy tax breaks for the well-off announced in Osborne’s March 2016 budget.
In work benefits should be cut as much as possible
A common misconception is that it is the workers who are on ‘benefits’ if their earnings are topped up by the state. The opposite is true. It is the company that is on the benefits because it is not paying working people enough. In-work benefits are corporate, not social welfare.
Huge corporations could pay a real living wage with tremendous ease, yet they do not. To illustrate, British company Monsoon has failed to pay even the current minimum wage, yet in 2013 reported pre-tax profits of £18.1m.
Corporate welfare such as tax credits or universal credit should be cut- but only if a real living wage is introduced to make up (or increase upon) the shortfall. Thereby cutting our corporate welfare bill and making real work pay properly in one swoop.
Significantly, a one size fits all living wage (like Osborne introduced) would always be problematic because it equates small businesses with huge multinationals. Small businesses may struggle to pay a proper living wage and therefore should be able to apply for state aid if they want more employees but cannot afford to pay the real living wage.
Meanwhile, Crabb is only doing one-half of the transition: the cuts. He is following through with cutting corporate welfare but not making up the shortfall with a real living wage. This will amount to grabbing up to £2,400 a year from poor hard working people. And the day after he will have the cheek to champion himself as a hero of the least well-off.
Corporate welfare – like universal credit – is vital as long as companies fail to pay their workers enough to live on. Pay them enough, and we can end the corporate handouts.
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Featured image via Wikimedia.
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