Hard times make it right to give everyone the benefit

CROYDON COMMENTARY: The “reform” of social security, or “welfare” as the government terms it in its Americanised manner, is being used as an excuse to take money away from the poorest in society. But there must be a better way, says ANDREW FISHER

From January this year, child benefit ceased to be a universal benefit. If either parent earns over £60,000, their entitlement is lost. This was a botched change, because two parents each earning £45,000 would still receive child benefit, even though their combined household income is 50 per cent higher than the £60,000 “cap”.

Hot potato: Has shadow chancellor Ed Balls found the benefits issue too hot to handle?

Hot potato: Has shadow chancellor Ed Balls found the benefits issue too hot to handle?

And it’s not just some relatively well-off households that are losing out through this government’s child benefit changes. The three-year freeze in the rate of child benefit means that a family with one child is £141 worse off this year, and a family with two children is £234 worse off.

When introduced as “family allowance” by the 1945 post-war Labour government, this benefit was not just about meeting need, but acknowledging the increased costs of bringing up children. It sent a message that all of us, collectively, have an interest in supporting the next generation.

The recent changes to child benefit were opposed by Labour when it was going through parliament. This week it was announced by Labour that the party would not restore child benefit as a universal benefit if elected in 2015.

The Labour leadership also announced it planned to means test the currently universal winter fuel payments that they introduced when in government. This is deeply problematic, as pensioners are particular hostile to means-testing.

And rightly so. Pensioners’ benefits are an acknowledgement for a lifetime of contribution to society, in an effort to ensure that everyone should have dignity in retirement.

Currently, the winter fuel payment is received by more than 90 per cent of those entitled to it. By contrast, pension credit – a means-tested benefit for the poorest pensioners – is only claimed by 65 per cent entitled to it. So more than one-third of the poorest pensioners don’t get what they are entitled to. That means there is more than £2 billion a year that the poorest pensioners should receive.

It is the most under-reported statistic in the social security debate, but every year £16billion in benefits and tax credits is unclaimed. We hear lots about the £1.2 billion of benefit fraud, but hardly ever hear that nearly 14 times as much is left unclaimed. The stigma and complexity of claiming means-tested benefits accounts for much of that lost income for the poorest households.

What was more worrying still was the Labour party leadership’s acceptance of this government’s austerity agenda: “We will have to govern with much less money around,” said shadow chancellor Ed Balls. Which of course is simply not true. The money is there, hence why Balls still advocates restoring the 50 per cent tax rate on the super-rich, whose pay rises and amassing of wealth continues unabated by the squeeze affecting the rest of us.

It is a strange situation when to gain “economic credibility”, you must adopt policies and an economic orthodoxy proven to have failed, and that this represents the “centre ground”.

Yesterday, Ed Miliband, the Labour party leader, talked about capping structural social security spending, in contrast to the brutal approach of the Tory government in capping individuals’ benefits, which is causing rising poverty and homelessness– and which is enthusiastically backed by Croydon Central’s Conservative MP.

Limiting social security spending through raising wages, reducing housing costs and by creating jobs are all good things. The same could apply to winter fuel payments – which are only necessary due to the unregulated grotesque profiteering by the energy companies.

Labour needs to be advocating more, not less, of the sort of structural societal change that Miliband hinted at yesterday – and less of the economically and electorally illiterate politics to inspire people to vote Labour again in 2015.

It is therefore vitally important that when the local Labour party in Croydon Central selects a candidate, from one of the many excellent women who could win the seat, they are strong enough to argue within the party, too, for the people of Croydon.

Previous columns by Andrew Fisher:

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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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