SNP-led Glasgow City Council’s latest move for its poorest residents sets a worrying precedent. It’s planning to restrict how people can spend a coronavirus (Covid-19) payment. And while this is happening on a small scale, it should be denounced now. Because the potential for the Department for Work and Pensions (DWP) and the UK government to take this to the extreme is there already.
Scotland loves… gift cards?
The Scottish government has allocated £80m to a Covid Economic Recovery Fund. It’s distributing it to all local authorities who then get to choose how to spend it. In Glasgow, the city council is giving low income households a gift card. As it said on its website, the council:
has been given over £9million by the Scottish Government to allocate Scotland Loves Local gift cards that can only be used in the city by residents from low-income households.
This funding… means that over 84,500 households in the city will each receive £110 worth of the gift cards to be spent in registered businesses in Glasgow
The gift cards are part of the Scotland Loves Local scheme to promote people shopping on their high streets and in the local area. But there’s a catch. Because people may not be able to spend the gift cards on just anything, or anywhere.
As Glasgow Live reported, a Tory amendment to the plans was passed at an SNP-led city council meeting. It noted that:
Conservative councillors put forward an amendment saying there should be restrictions on the use of the gift cards “to ensure they cannot be used for the purposes of purchasing tobacco.”
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Their amendment also wants officers to look at excluding national chains from the shops participating in the council scheme to boost regional businesses.
The Conservative politicians also called for the card to be used in person or for delivery from local retailers to encourage footfall to neighbourhood shops.
The SNP administration accepted these amendments, despite Labour opposition. And there’s several issues with them.
Firstly, people can currently only use the gift card in 184 shops in Glasgow with plans to expand this. Of course, this element is by design – as the SNP’s idea for the gift card is to promote local businesses and high streets. But when you look at it in the context of a one-off, almost social security-like payment, this presents problems.
Considering Glasgow is the UK’s largest retail district outside of London, 184 shops is a tiny number for people to choose from. So, the council is restricting poor people with this payment. If the SNP-led council accepts the Tory plans to exclude national retailers, then it will restrict people even more.
Also, the card would need to be accessible for chronically ill and disabled people. So, all shops would need to offer a delivery option. It’s currently unclear if that’s the case.
But moreover, it sows the seed that authorities can restrict how poor people spend their social security.
A Labour councillor called the restrictions “paternalism in the extreme” and “a 19th century concept”:
we can’t trust the poor to spend their own money without putting restrictions on them that they are not allowed to buy a packet of rolling tobacco.
But the idea of controlling what social security claimants spend their money on isn’t new. As researcher Sue Jones wrote in 2016, the UK government was already looking at digital currency and smart cards for social security claimants. As far back as 2012, Conservative MPs, including Universal Credit architect Iain Duncan Smith, were pushing the idea. The Telegraph reported that he said:
I am looking… at ways in which we could ensure that money we give [social security claimants] to support their lives is not used to support a certain lifestyle.
It noted that the “smart cards“:
would only be able to pay for “priority” items such as food, housing, clothing, education and health care.
DWP: tracking claimant’s spending
Jones noted in 2016:
Lord Freud, one of the main architects of the welfare “reforms” said:
“Claimants are using an app on their phones through which they are receiving and spending their benefit payments. With their consent, their transactions are being recorded on a distributed ledger to support their financial management.”
The Department for Work and Pensions (DWP) has been working with Barclays, Npower, University College London and a UK-based distributed ledger platform startup called GovCoin to create an app which tracks people’s benefit spending.
In other words, the DWP would track what people spent their social security on. It ran a trial of GovCoin, but the department concluded:
that it was not viable due to limited take up potential and the expenses it would incur.
But that could soon change.
The current Conservative government and the Bank of England (BoE) are looking at introducing “Britcoin” – a government digital currency. So far, plans are in the early stages. The BoE has said that it would not roll out the crypto currency until at least 2025. And while neither it or the government have mentioned Britcoin in the context of social security, it could eventually become a reality.
In 2019, the DWP was already discussing using distributer ledger technology (DLT) for social security payments. Blockchain, on which many crypto currencies are based, is one type of DLT. It may well have been looking at this as part of a reconsideration over the failed 2016 trial of GovCoin.
So, if the BoE was to introduce a government crypto, then this would go some way to limit the DWP’s previous concerns over cost if it wanted to use a version of it – as the roll-out and tech expenses would be met by the BoE and or Treasury. Also, the DWP would likely know what wallet social security claimants would be using. Therefore, within the blockchain it could check on how you spent your payments. It’s important to note that because of the way crypto currently operates, the DWP would probably need to police any system more than it does the current one. This is because claimants would have workarounds to avoid it monitoring their use of their payments – like using a different wallet or converting the crypto to physical currency.
But overall, the potential implications of governments using crypto can be seen in China.
China already has a state crypto called e-CNY. China also has a “social credit score” system, where blockchain technology is used to ‘rate’ people. Both local authorities and private companies use the system. As Business Insider wrote:
Like private credit scores, a person’s social score can move up and down depending on their behavior.
The exact methodology is a secret — but examples of infractions include bad driving, smoking in non-smoking zones, buying too many video games, and posting fake news online, specifically about terrorist attacks or airport security.
Other potential punishable offenses include spending too long playing video games, wasting money on frivolous purchases, and posting on social media. …
China has already started punishing people by restricting their travel, including banning them from flights.
Authorities banned people from purchasing flights 17.5 million times by the end of 2018…
They can also clamp down on luxury options — many are barred from getting business-class train tickets, and some are kept out of the best hotels.
As writer AnonMcPleb wrote, central bank cryptos (but also all crypto currencies):
also have inherent surveillance capabilities which, if combined with a Social Credit Score system as implemented in China, can have frightening implications on human rights, freedoms and free speech when combined with AI monitoring and where political detractors can easily have their voices and funds frozen.
In other words, if the UK government combined Britcoin with the DWP and data gathering, then the civil liberties implications could be disastrous.
A dystopian, crypto future?
The Conservative Party has consistently breached the human rights of welfare claimants and created a culture where they’re viewed as scroungers. Currently, under its administration, the UK is descending further into authoritarianism and corporate fascism via legislation – like the so-called police bill. Moreover, the government already forces refugees to accept inhumane social security payments via a pre-paid card along with no choice over accommodation.
So, it’s no stretch of the imagination to think that the government could in the future use Britcoin to monitor what people spend their social security on – more so given the DWP and its architects wanted to previously. The government could also create what’s known as a “hard fork“. This would be where a part of the Britcoin blockchain would split from the original and effectively create a new crypto. The government could do this to create a separate Britcoin for social security.
As Jones summed up:
Are we going to see people claiming social security being named and shamed for buying Mars bars, a bottle of wine or a book? Or birthday and Christmas presents for their children? Will the state be sanctioning people that make purchases which the government deems “unnecessary”?
It may seem a stretch to think that the SNP restricting a coronavirus benefit could lead to this. But the point is that any step on a path towards the state controlling how people spend social security is a step too far. By placing caveats on its spending, the SNP is giving the green light for this kind of approach to be rolled out further. And that could potentially be utterly dystopian – as if the future of the UK wasn’t looking that way already.
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