Is the safety net now too thin?

Everyone has heard stories of — or even known people involved in — abuses of the welfare system. Some of them are hard to track back, others have grown in the telling, but there are at least enough well documented cases, reported in the tabloids, of people who took the public purse for a ride, claimed benefits they weren’t entitled to, or, worse (in the way they are reported), organised their lives so that they could use the social security safety net as a hammock on which to relax while others worked.

We’ve heard this rhetoric since the days of Thatcher, and — though I don’t recall it myself — most likely from long before then. The Victorians, indeed, were concerned to distinguish the deserving poor from the undeserving.

It’s a matter for academic discussion what the ideal economic formula for a welfare system is. Even for people (and there are few of these) who accept no moral imperative towards compassion, it is clear that a society which allows people’s lives to fall to bits the moment they lose their jobs is economically inefficient. With a minimum of twelve years investment in any individual’s education, it is clearly ludicrous to abandon someone to their fate after a downturn in the economy makes someone’s job redundant.

In a democracy, such an ideal formula is irrelevant. We choose collectively a government which will do us collectively the most good. Money may talk, but it doesn’t actually have a vote. Even the most hard-hearted recognise that a good safety net enables all of us to take more risks, to work hard on achieving things without constantly worrying about what will happen if sickness or misfortune were to make us temporarily unable to earn a living.

However, in a democracy, perceptions easily cloud good judgement. Voters have only limited mechanisms for investigating what the facts really are. If they read newspaper articles, see alarming figures, and find that these things tally at least to some extent with things they themselves have experienced, and are then offered a choice of two bleak alternatives, then at least some of them will choose something which, put forward bluntly on its own, would seem unpalatable.

The situation we are in now is that there has been substantial public rhetoric about ‘benefit-scroungers’ and other such terms for a long time. Successive governments have found it essential to announce ever tougher means of clamping down on ‘benefit-cheats’ (a term used synonymously with ‘benefit-scroungers’, even though there is a wide gap between the two, when presented non-pejoratively).

There is a law of diminishing returns as to how many genuine ‘cheats’ are caught with ever-more-draconian legislation. Government estimates put the cost to the tax payer of inappropriately claimed benefits many times lower than the cost of unpaid or undeclared taxes.

At the same time, there is a law of increasing harm. The so-called ‘bedroom tax’, no matter how laudable its aims, has at the very least caused a huge amount of grief and worry to a very large number of people. The government expects this to cost £14 a week to affected households. £14 does not sound like a great deal, if you are reasonably well off. However, for anyone already struggling to pay the bills, it is another piece of damage that may, or may not, prove too much.

The ‘bedroom tax’ is a convenient and much needed rallying cry for left-wing campaigners, though its official term, the ‘withdrawal of the spare room subsidy’ doesn’t actually do it many favours. The reality is that, on its own, the change probably wouldn’t do an enormous amount of damage. The catch is ‘on its own’, because there is no ‘on its own’ when it comes to the finances of people who are — for whatever reason — thrown onto the safety net. Payment of initial benefits is never immediate. A young couple may run up considerable debts before first benefits are paid. Without access to security, these debts will not be funded by banks or building societies — except, of course, for recent students, whom the banks are generally willing to support for a while. Payday loan companies have come in, quite rightly, for a high degree of criticism in the last couple of years, but even payday lenders are preferable to the loan sharks who exploit their own social networks in deprived communities.

At the same time, access to credit via credit-cards and shop-arranged finance creates its own issues. Those who contract debts they cannot service find them quickly passed to debt-recovery agencies. Whether the debt is actually paid or not, the result is irrelevant: a bad credit rating is logged by the bank, and is passed on to other banks.

It’s hard to measure the true impact of late paid benefits, the persistent chipping away at what is available — of which the ‘withdrawal of the spare room subsidy’ is just one element — stiffening of eligibility criteria, rising cost of food, fuel and transportation, and the corrosive effect of unserviced debt. While the Office of National Statistics will happily provide you with multiple and individual indices of deprivation, right down to the cluster-of-streets level, it is never possible to find a direct link with changes to the welfare system and the wider safety net.

One should be wary of the Facebook stories posted that claim that this person or that person died as a direct result of bedroom tax, or losing a benefit, or loan sharks. At the individual level, the story is always much more complicated, and Facebook is a notoriously doubtful source of information.

However, what we do know is that food banks are becoming an increasingly important part of many people’s lives. According to the Trussell Trust, The Trussell Trust – Statistics for finacial year 2012-2013, there was a rise of 170% in use of the trust’s food banks over a 12 month period. Trussell is not the only group providing food banks, but their data is in line with what other groups are reporting.

What is more, Trussell keeps records on where the referrals come from, and for what reason. Benefit delays were by far the most important, with around ? of those using the Trust’s food banks citing this as the main reason. Low income, benefit changes and debt followed at 1/5, 1/7 and 1/10 respectively. During 2012-13, the Trust helped 350,000 people through its food banks.

Food banks are a good measure because they relate to people who — generally speaking — continue to try to maintain household life. However, the implicit stigma of using a food bank means that people only use them because they have to, rather than seeing them as a way of reducing household bills in order to fund other activities. As Robin Aitken pointed out in the Telegraph in December, Food banks: the unpalatable truth – Telegraph, they are certainly not the only measure we should look at, nor are they a simple way of reading across to see changes in poverty. However, they do provide a genuine indication that — for some at least — the safety net is wearing thin.

The natural answer is to blame the government. If you are in the government, or associated with it, the natural answer is to blame the previous government. Occasionally politicians remember that they are all part of the same union, and blame the media. If you are an academic, or a Marxist, or even a Marxist academic, you may wish to blame the system.

The truth is that successive governments have only done what people want them to do. The media only prints stories that people want to read. Marxist and other academic analysis only analyses what society does, and society is made up of people.

We are coming up to election time, and, even though I am not standing for the local authority or for the European parliament, I know that, as usual, I will have a string of people — most of whom I barely know, if at all — telling me what’s wrong with the world. A goodly number of them will tell me that it’s time to clamp down on benefit-scroungers and benefit-cheats.

If our safety net is wearing thin — and I believe in some places it is now barely more than gossamer — it is because large numbers of ordinary people have seen fit across a generation to decry it . If we want it to be restored, it is time for we, the voters, to change our rhetoric.

To change the world, we need to change our own tune.