Without tough opposition to Osborne’s welfare cuts Labour risks becoming an irrelevance, says John Percival
Following the General Election defeat Labour leadership contender Liz Kendall warned that the Labour party it had “no God-given right to exist”. As the leadership contenders compete to define the party’s raison d’être under their leadership, it is worth recalling that the party first existed to give representation to the then voiceless working class. Anyone doubting that a party is needed to do the same today needs look no further than Tory Chancellor of the Exchequer George Osborne’s July budget and in particular the latest round of welfare cuts. Osborne’s budget hits the most vulnerable hardest. Most benefits, already devalued by the switch from the indexation used to calculate annual uprating from RPI to the lower CPI and the subsequent 1% up-ratings cap, will be cut further in real terms by a cash freeze. Children in large families previously affected by measures such as the household benefit cap will now see it cut by a further £3,000 to £23,000 in London and by £6,000 to £20,000 across the rest of the United Kingdom. The Government’s own impact assessment states that 59% of those affected by this change will be single mothers. Research from IPSOS-Mori has also indicated that 37% of those currently affected by the cap come from a minority ethnic background; almost triple the percentage of the non-white population across the whole of the UK according to the 2011 census. Larger families in future will also have their child tax credit restricted to the first two children, essentially a two-child poverty for the working class.
The coalition’s welfare cuts brought progress made by the previous Labour Government in slashing child poverty to a halt. Two million children were taken out of absolute low income after housing costs were taken into account between 1997 and 2010. Since David Cameron became Prime Minister, the number has increased by 500,000. Osborne and Work and Pensions Secretary Ian Duncan Smith, well aware of the implications of their latest policies have abolished the former Labour government’s child poverty reduction targets and are seeking to redefine poverty so that it is no longer just linked to income. BME families are disproportionately hit by increases in child poverty with research for the Department of Work and Pensions (DWP) estimating that different minority ethnic groups have child poverty rates six to 30% above the national average with Pakistani and Bangladeshi children worst affected. Arguably, however it is disabled people who will be hardest hit.
As a result of measures such as the bedroom tax, which two thirds of households affected include someone with a disability, real terms cuts to Employment and Support Allowance (ESA) and the closure of the Independent Living Fund, disability poverty increased under the coalition. Since 2010, the percentage of families in which someone is disabled living in absolute poverty after housing costs are taken into account has risen from 23% to 30%. One of the nastiest elements of these cuts has been the way in which the Tories have sought to divide and rule. ESA appears to have been divided into a ‘deserving’ support group and ‘undeserving’ work related activity group. All the while they have cut support for both in real terms by capping the personal allowances paid to both groups at a below-inflation 1%. The work-related activity group is now hit further with new claimants seeing their entitlement cut by 30%. It is worth remembering that this is a group of people who have been assessed under the Work Capability Assessment and been found not fit for work. Poverty reduction was one of the last Labour Government’s finest achievements. The party’s response to this latest round of cuts is therefore disappointing. Even more concerning than the decision to abstain on the 2nd Reading of the Government’s Welfare Reform and Work Bill, which introduces many of the cuts, was the acceptance in principle by acting Labour leader Harriet Harman on BBC TV’s Andrew Marr show of the lowering of the household benefit cap and cuts to child tax credit for families with more than two children. In effect this was accepting the Tories artificial division between “shirkers” and “strivers”.
Across Europe those stung by austerity are abandoning social democratic parties that fail to speak up for them. There is a very real potential for this to happen in the UK. In Scotland voters simply did not want to listen to Labour’s message at the last General Election feeling that the party had abandoned them for too long. In England and Wales we have seen an increase in direct action groups by-passing traditional party politics which they see as of offering nothing for them. Kendall is right that Labour has no divine right of existence. Should Labour fail to stand up for those who need a voice they will either find it themselves or elsewhere. If the next leader allows this to happen Labour risks becoming an irrelevance.