Cuts to Welfare, Subsidies to Corporations – The hidden welfare state

The Black Triangle Campaign was founded to support the human rights of disabled people and to oppose the Government’s “Work Capability Assessments”, which re-classify sick and disabled people as “fit for work”.

 

The hidden welfare state that the U.K. government dares not speak of

The UK has two welfare states. There is one that is reported and endlessly discussed, and another, which is rarely mentioned. Whilst the first is suffering enormous cuts under the Tory/LD coalition, the other just keeps expanding.

Governments on the left and the right can always justify welfare cuts by pitting, for example, mobility scooters against needle exchanges, or the soft-play area in children’s playgrounds against an old people’s home. Who deserves it most, they say, students or cleaners? Old or young? But when we’re running not one, but two welfare states, that’s a totally fake scenario. The real choice is between playgrounds or gas rigs; between Meals on Wheels or The City of London Currency Speculators’ Maintenance Allowance.

There’s a connection – never mentioned – between, let’s say, Britain’s eight new deep-water gas rigs and its new food banks. The connection is that the $4.5 billion subsidy package being doled out to transnational gas corporations is a very big slice of the welfare pie. And to keep the gas transnationals on the benefits to which they are addicted, hungry humans have to queue for tinned food that is too close to its sell-by date to be kept on the shelves of supermarkets, many of which are themselves massive recipients of corporate welfare.

Not only does the UK pay out unemployment benefits less generous than Romania, Albania and the US, but the wages of the employed have simply not kept pace with productivity over the last 30 yrs. Tory Ideology is all about Handouts to the Wealthy paid for by the Poor.George Osborne has cut £18bn from benefits plus a further £81bn from public services in the name of unavoidable austerity, whilst at the same time providing huge subsidies, tax cuts and removing regulation for the hidden ‘welfare’ system that benefits the private sector.

No goods or services are directly returned to the government in exchange for these expenditures, although of course, politicians will argue that they’re stimulating the economy, helping struggling industries, creating jobs or funding important research but actually this is just a corporate welfare system.

The Cato Institute, for example, estimated that in the US, $93 billion were devoted to corporate welfare in 2002. This was about 5% of the federal budget, and nearly twice the amount spent on social welfare ie. feeding people, housing the homeless, raising children out of poverty etc.

There is no reason to think the situation is different in the UK. However, overall statistics for the UK corporate welfare budget are hard to discover, and the variety of different subsidies are staggering. Needless to say, the Tories focus their attention on fraud and waste in the social welfare budget.

Welfare fraud and waste is never far from the top of the UK’s news agenda – but the real figures often bear almost no resemblance to popular belief. The British public, for example, think around 27% of the welfare budget is lost of fraud, according to TUC research.

The Department for Work and Pensions’ latest data on fraud and error in the benefit system shows a very different reality: fraud exists, but at a far lower level than the public believes – and is outweighed by errors from claimants and officials alike. The DWP estimates £3.5bn has been overpaid due to errors and fraud in the system; 2.1 per cent of the overall benefit expenditure.

The corporate welfare budget arises from four main sources: Paying little or no tax – Tax havens; tax breaks; enjoying huge subsidies and the removal of employment and environmental protection regulations.

Tax Havens
 The UK’s 100 biggest public companies are running more than 8,000 subsidiaries or joint ventures in onshore and offshore tax havens, according to research. The figures, published by the charity Action Aid, show that only two of the companies listed on the UK’s FTSE 100 have no subsidiaries in tax havens – while companies such as Barclays and Tesco own hundreds. http://www.guardian.co.uk. The UK Crown Dependencies and Overseas Territories constitute half of the world’s most frequently used tax havens.

Tax Breaks
Almost one in four of Britain’s biggest listed companies paid no corporation tax in this country last year – and almost half fail to disclose their tax payments to the UK at all, according to research by The Mail on Sunday.  According to the annual reports and accounts of all the companies in the FTSE 100, 47 companies gave no obvious figures for tax paid in Britain.  Of the 53 who did, 12 showed they paid no tax at all and, six actually received a tax credit.Tax Avoidance
 Treasury minister, David Gauke, admitted in reply to a parliamentary written question that only four employees of HMRC are working to capture 124 tax fugitives. The amount of uncollected tax rose again last year. A Labour MP pointed out that the four officials dedicated to the tax fugitives compares with the 450 HMRC staff involved in administering the withdrawal of child benefit from higher-rate taxpayers.

Subsidies
Currently, it is estimated that the government has already provided £43.5bn in various subsidies including the National Infrastructure Plan, the Equity Loan and Help to Buy schemes, the Enterprise Finance Guarantee and the Regional Growth Fund, with nothing to show for it. Far greater sums are in the pipeline, up to £310bn.

Meanwhile supermarkets get an enormous subsidy to help with one of their major overheads, staffing costs. This is because many employees in these large and successful companies are paid only the minimum wage. And because the current minimum wage is not a living wage, nearly everyone on it has to claim tax credits to be able to make ends meet. Those tax credits are funded by the taxpayer. The supermarkets are effectively state subsidised industries.

In addition to the recent unprecedented public support for the financial sector The NEF (New Economics Foundation) identified at least three significant hidden subsidies:

* The ‘Too Big to Fail’ subsidy: The government now provides a public guarantee, effectively insurance against banks going bust. This gives banks a huge commercial advantage over other firms in a market system. It means banks are able to borrow money much more cheaply than if they were not ultimately underwritten by the public. Exchanges with leading auditors in front of the House of Lords Select Committee on Economic Affairs in January 2011 confirm this. A conservative analysis reveals that this hidden subsidy could be worth £30 billion annually. It means that bonuses to senior staff for ‘performance’ and dividends to institutional investors are at least in part a straight transfer from the taxpayer.
* The quantitative easing windfall subsidy: When it was decided that the economy needed more liquidity, the Bank of England pumped money in using the technique called ‘quantitative easing’. To meet various, and sometimes self-imposed, requirements, it did by purchasing government bonds through investment banks. Merely for being passive conduits for this ‘risk free’ arrangement the banks took a cut of every trade. Here nef analysts found that banks enjoyed a significant windfall, but that lack of transparency keeps the likely amount hidden.
* The ‘make the customer pay’ subsidy: Since the baking crisis of 2008, the banks have been increased the gap between what they have to pay to borrow money, and what they charge people to borrow from them. This is the so-called interest rate ‘spread’. This is because they can borow money from the Bank of England at virtually 0%. As it is, the taxpayer is subsidising the banks twice over: once through taxpayer funded public support to the banks, and secondly through paying much higher interest to borrow than the banks do. This hidden subsidy amounts to at least another £2.5 billion each year.

Workfare: Another Voice Of Anti-Capitalism in Guildford Investigation. – Plus March 3rd Day Of Action Demonstrations and Events List

Workfare – The Facts & The Figures: Another Voice Of Anti-Capitalism in Guildford Investigation.

See bottom of the post for a list of events and demonstrations in London. 
It must be the ultimate dream of capitalists. You get free workers. After all, as Tesco is fond of saying ‘every little helps’. But people have finally begun to rebel over the stigmatisation and demonisation of people on the dole. The new Tory Work Program has a core underlying philosophy. The unemployed are to blame for their own predicament.

Was it the unemployed who dealt in derivatives and financial instruments based on fraudulent risk assessments? Did the unemployed gamble with billions of pounds of other peoples’ money? Have unemployed people caused the recession?

Working for your £67.00 a week dole in a climate of no jobs simply means exploitation. And if someone gets a job at the end, then it means someone else doesn’t. All it teaches people to do is to compete more effectively against each other.

The government claims that “Work Experience”, “Community Action Programmes”, and other slave labour schemes are helping people “back to work”. But the truth is, companies availing themselves of these slave labour schemes are replacing paid staff with unemployed forced labour, creating more unemployment. Why would companies pay for staff when they are being provided free at the taxpayers’ expense?

Furthermore, there is a large body of research that indicates that shelf-stacking work only leads to more low paid shelf stacking work. Even highly qualified graduates, once they embark on low paid, low skilled jobs, find it much harder to gain skilled employment.

We need to get the message across that unemployment is endemic to capitalism. That demonisation and finding scapegoats is essential to a system that is desperate to blame any and everyone, except those who are most responsible.

Tesco, Burger King, Poundland and many other businesses are pulling out of the “Workfare” programme, as well as the other slave labour schemes. These schemes are in crisis. Now is the time to pile on the pressure.

March 3rd will see the next day of action against Workfare, and it promises to be the biggest yet. Workfare and the other slave labour schemes affect us all. They increase unemployment and reduce wages for the rest of us. Companies such as Poundland are paying their workers less and less whilst making huge profits because they know there is an ever-increasing pool of unemployed labour threatened with doing the same work for nothing.

Before pulling out of the scheme, Tesco reported that over the past four months some 1,400 people have worked for them without pay. Meanwhile, its profits for the first half of 2011 were £1.9 billion. And Tesco CEO Philip Clarke is on target for £6.9 million this year.

Steve Short, from the Boycott Workfare Campaign http://www.boycottworkfare.org told The VOAG; “It is staggering that while unemployment continues to rise, the government is replacing paid work by pushing out workfare on a massive scale. The organisations profiting from free labour can afford to pay a wage but are choosing not to. Actions this weekend will show that they risk their reputation if they do not withdraw from workfare.”

It is our duty – as trades unionists, activists, workers and youth to join in the day of action on March 3rd. These schemes are teetering on the edge. One more push and we can close them down for good. Below is a list of demonstrations in London on Saturday March 3^rd. Please consider joining one near you or come to the main demonstration in Oxford Street. Details below. 

There are several government forced labour schemes – and no matter what the government says there is an element of compulsion to all of them.The Work Experience Scheme –
This scheme is designed for 16 to 24 year olds. The government admits that young people who refuse to go on the eight-week placements will loose benefits. It intends to create 250,000 Work Experience placements. Once the placement is completed, benefit claimants can be forced to go strait on to another scheme. The placements can be never ending.

The Mandatory Work Activity Scheme –
This scheme is for claimants aged 18 or over. The scheme mandates four weeks’ work unpaid for 30 hours a week. Although the government claims it is “community work”, its definition of this includes private companies. 24,010 people were mandated to take part in MWA between May and November last year.

Community Action Programme –
Jobseekers are referred for up to 30 hours unpaid work per week for six months. They can be stacking shelves or tossing your burgers. The government says the Community Action Programme is designed for the benefit of the community. It is a clear sign that the government intends to use forced labour to replace the gaps left in public service delivery in the wake of service cuts. Provider guidelines suggest that a community placement would be appropriate at Local Authorities and Councils, Government Departments and Agencies, Charities and third sector organisations, Social Enterprises, and Environmental Agencies.

The Work Programme –
370,000 people were referred to the Work Programme between June and November 2011. 850,000 people are expected to be forced on to the programme by the end of the year. Ingeus, which administers Mandatory Work Assignments in the East Midlands and the North-East (owned by city financiers Deloitte) force people to do six month workfare placements. The Work Programme, is expected to cost the taxpayer £5 billion pounds. Claimants loose all benefits if they refuse to go on the scheme or drop out before its completion. Once the six month programme is concluded, job seekers can be required to immediately start another work placement. For more information on these schemes and for tips on how to avoid them visit: http://www.boycottworkfare.org

Workfare Doesn’t Work
On the 1st of April 2011, the Social Security Advisory Committee advised the government not to introduce Mandatory Work Activity. Its report said there was “no evidence that workfare increases the likelihood of finding work”. It continued: “there is evidence to suggest that by limiting the time available for job search activities, Mandatory Work Activity can in fact reduce the participants’ chances of finding employment.

The Committee stated “it appears to us to signal that being mandated to mandatory work activity is regarded as a punishment rather than an opportunity to learn and develop new behaviors and skills”. The report continued: “there is a risk that the presence of Mandatory Work Activity on a jobseeker’s CV could stigmatise a jobseeker when applying for a job in the future.
The report went on to say that the Committee is “very concerned that this is an exploitation of people who have no choice” and there is no provision to “monitor employers or to end their involvement should they be found exploiting participants or requiring them to undertake inappropriate work.

There is no requirement for “employers” to provide equipment, for example clothing. There is no provision for job seekers to take time off for illness or to attend medical appointments, or to look after a child if it falls sick. There is no requirement for the employer or placement administrator to reimburse expenses for travel or childcare. The lack of childcare costs will make it impossible for one-parent families to participate in the programmes, leaving them vulnerable to benefit sanctions.

This 18 page report by the governments own Social Security Advisory Committee ends in big bold letters in a text box, copied and pasted from the report below:A4E and Emma Harrison
These schemes don’t come cheap. They are administered by private companies. A4E is one such company. Emma Harrison, the chair of A4E has had to step down from the company she founded, together with her government post as “Back to Work Czar”, after being caught with her hands in the till. Ruling-class scum like Harrison preach about benefit scroungers, whilst they take home millions. Whilst her company is mired in fraud and corruption scandals, Harrison paid herself £8.6m last year.

The only revenue A4E earns comes from our taxes. It is paid by the government according to the numbers of job seekers it manages to force on to government schemes. The Guardian reported on 22^nd February that A4E was under police investigation. It had been forcing job seekers to work unpaid in its own offices in order to get the “placement” commissions. Jobseekers were forced to work in their offices in Woolwich, Camden and Holloway or have their benefits stopped. The investigation, reported the Guardian, also revealed that from the 12 months to late June 2011 the company sent people to work unpaid in Asda, Sainsbury’s, Oxfam and a host of other businesses.

A “company official, who did not want to be named” was quoted in the Guardian, as saying; “that in addition to the revenue from the commissions and the free labour, sending jobseekers to work in its offices helped A4e cut down on its overheads as it didn’t have to spend time on organising placements”.

So far four A4E employees have been arrested, and the head of the Commons Public Spending Watchdog has demanded the government stops working with A4E until the police investigation is completed. The Public Spending watchdog has highlighted that A4E has been named preferred bidder for a £15 million contract with the Skills Funding Agency to provide education to prisoners in London.

A4E admitted that the present police investigation was only one out of a total of ten cases of corruption that had been referred to the Dpt of Work and Pensions. As a result, the company has been forced to repay public funds on five separate occasions due to “irregularities”.

The  Dept of Work and Pensions has also criticised A4e for paying £11 million in dividends last year, 87% to Ms Harrison, despite all its £180 million UK turnover resulting from Government welfare to work contracts. In addition to these incredible sums of public money, Emma Harrison also received nearly £2 million from leasing properties she owned or controlled back to her business.

The allegations against A4e are unending. Jobseekers report being made to sign blank time sheets, and of government vouchers—intended to help the jobless buy adequate clothing for interviews—being stolen by advisers. Its also been accused of claiming that jobseekers have found full-time work placements, when their jobs lasted less than 24 hours.

According to the Mail On Sunday, A4E receives a fee of £400 for every jobseeker referred to it. When that person finds work for 26 weeks—whether it is continuous or in breaks—it receives £1,200, followed by a monthly “sustainment fee”. It is estimated that A4E earns approximately £13,000 for every successful placement.

A dossier compiled on A4E includes the complaint that the firm was “nothing short of a gravy train”, in which fraud was “systemic” and “common practice”. In response, an unamed Labour MP contacted the Guardian to say Labour MPs were concerned that the MWA programme had not been scrutinised by the Commons and had passed into law with the “tick of a minister’s pen” last year.

Other Workfare providers include REED, SERCO and Atos – and they are being subsidised by the taxpayer to the tune of billions. It is they who depend on state handouts not the unemployed. Seetec made £53 million last year from its involvement in the Work Programme, while Ingenus was awarded contracts worth £727 million.
Social Security Advisory Committee Report, April 2011: Condemming the Workfare programmes. Read Here.

Where to go on the March 3rd Day Of Action Against Workfare
Islington            10am         Outside Angel Islington Tube

Brixton              12pm         Outside Tesco, 13 Acre Lane, Brixton

Brixton              12pm         Outside Brixton Job Centre

Kingston              1pm         Outside Starbucks, Kingston

Oxford Street    11.30am      Outside BHS

Ealing                 1pm          The Arcadia Center, 50/52 Broadway

Lewisham            1pm         Outside McDonalds, Lewisham High Street

Walthamstow     12pm         Outside Nat West bank, Walthamstow Town Square

Hackney             12pm         By St Augustines Tower, Mare Street

Stratford             12pm         Westfield Center
For a comprehensive list of Workfare demos and actions around the country visit: http://www.boycottworkfare.org

Day Of Action Against Workfare. Kingston Town Centre, February 22nd, 2012

The VOAG (Voice Of Anti-Capitalism in Guildford) joined the Kingston SWP for a  demonstration against Workfare. Kingston Town Centre, February 22nd, 2012.

Below is a quick Powerpoint report on the evenings events together with a few pictures.
Please click on the picture below.For more on this story, click: https://suacs.wordpress.com/2012/02/20/workfare-demo-kingston/

The next National Day Of Action aginst Workfare will be on Saturday, March 3rd. Protest outside BHS, Oxford Street from 11.30.  http://www.boycottworkfare.org/

For more about Workfare and tips on how to avoid being trapped in to it by the Job Center, go to  http://www.boycottworkfare.org/

National Day of Action Against Tesco’s Workfare Scheme. Kingston Upon Thames. 22nd, February.

Tesco is boosting it’s £4 billion profits by using the slave labour provided by the Government’s ‘Workfare’ schemes. Take the fight against Tesco into the streets of Kingston on the National Day of Action against Tesco. Wednesday, 22nd, February. 5:30pm until 6:30pm, Kingston Station

From Corporate Watch
The campaign against workfare has claimed some major successes over the last month, with Sainsburys, Waterstones and TK Maxx bowing to pressure and pulling out of some (though not all) of the government’s workfare programmes. Other companies now face a dilemma: do they also withdraw to avoid further bad publicity, or do they continue to enjoy the free labour that workfare brings? Corporate Watch finds the benefits of workfare for retailers such as Asda and Argos make it difficult to say no to.

Over the Christmas period for example, the government’s eagerness to send unemployed people on unpaid placements meant stores did not need to go to the trouble of hiring and paying temporary workers as they would normally. Joe Wilson, a 21 year old on Jobseekers Allowance, worked a four-day week, unpaid, for six weeks from the middle of November at the Asda superstore in Harrogate, Yorkshire.He told Corporate Watch: “There were about 15 of us on placements. The manager said they had overspent on stocking Christmas stuff so they’d got people in on placements [to save money]. The paid staff told us they were being asked to leave before they’d ended their shift as we could do the work. I worked Christmas Eve and New Year’s Eve. They arranged it so everyone came in those days.”

 His Jobcentre had said that if he didn’t attend the placement his benefits could be stopped: “The Jobcentre had got a group of us in for CV writing training. It was really obvious stuff – don’t use a crayon and so on. When we were there they said some people had come to speak to us about a work experience programme. Then a few days later I got a letter saying that, as I’d expressed an interest they’d be organising a work placement. The letter said if I didn’t go they’d stop my JSA. I’d never said I wanted to do a placement in Asda.”

A spokesperson at Asda’s head office told Corporate Watch that the company hadn’t received any reports of workfare placements replacing paid staff and they would “investigate further,” adding the placements were “not designed to substitute colleague roles”. Despite several follow-up calls and emails, we have not heard anything since.

Argos: discount products, discount labour
A claimant in Bristol told Corporate Watch how paid Christmas work in the Argos store in the Galleries shopping centre disappeared when the company realised it could get people in for nothing on workfare placements. ‘Jason’, who wishes to remain anonymous, said Seetec, the ‘provider’ company that he was sent to by the Jobcentre, had arranged an interview for him and 13 others for temporary work. They were not hired because the store instead took people on unpaid placements organised by Prospect, another employment provider company, which ironically has its Bristol office in the same building as Seetec.

Argos told Corporate Watch that its stores had “liaised over our peak Christmas trading period with local job centres to offer working opportunities to job seekers through initiatives called work placements or work trial”. The retailer went on to say it is currently assessing whether its trials over the Christmas period will continue and that it “endeavoured to offer permanent roles to young people” after the placements. Corporate Watch asked how many permanent roles had been offered but we have not received a reply. Prospect did not reply to any of our enquiries.

You’re supposed to find me a job, not turn me into a slave!
Workfare does not only replace paid work at Christmas. ‘Chris’ was sent to do a three month placement in Booker Wholesale in Bath. He told Corporate Watch that when the placement commenced the manager said that if he worked hard he would get a job, but he soon found out that this was unlikely:

“I asked the manager about jobs and he said: ‘keep working as you are and you will be fine’. The turning point came for me about two months in, when two part-time employees were laid off for stealing some alcohol. I thought there would be a job for me but they hired the brother of an employee already working there. I went to see the manager and he said that there were no positions. He suggested I could continue doing four days a week unpaid. I left in disgust and took my last two days off. They had the nerve to say: ‘what if we are counting on you to be there?’ Then hire me! You’re supposed to help me find a job, not turn me into a slave.”

Paid employment ‘unlikely’
Workfare is becoming such a popular way for retailers to staff their stores that they are finding it hard to keep count of how many workfare staff they have. A spokesperson for entertainment retailer HMV told Corporate Watch its placements are organised on “a more localised basis” so it is difficult to “fully track all the placements in place across the chain at any one time.” But at least the company is less coy than Argos and Booker about the likelihood these placements will lead to paid work, admitting: “it’s unlikely that [a] large number will go on to achieve full time paid employment with the company.”

Have you been sent on an unpaid work placement or do you know someone who has? Contact Corporate Watch on 02074260005 or contact corporatewatch.org

National Day of Action against Tesco.
Wednesday 22nd, February
5:30pm until 6:30pm Kingston Station
Wood Street, KT1 1TG London, United Kingdom

Riots & Revolts: Record levels of unemployment for Europe’s youth

The VOAG (Voice Of Anti-Capitalism in Guildford) Looks at the latest figures on youth unemployment.

According to the latest figures from the German Statistical Office and Eurostat, youth unemployment across Europe has increased by a staggering 25 percent in the course of the past two and a half years. The current levels of youth unemployment are the highest in Europe since the regular collection of statistics began.

In the spring of 2008, prior to the collapse of Lehman Brothers and the financial crash of that year, the official unemployment rate for youth in Europe averaged 15 percent. The latest figures from the German Statistical Office reveal that this figure has now risen to over 20 percent.

In total, 20.5 percent of young people between 15 and 24 are seeking work in the 27 states of the European Union. At the same time, these numbers conceal large differences in unemployment levels for individual European nations.
In Spain, where the social-democratc government led by Jose Luis Zapatero has introduced a series of punitive austerity programmes at the behest of the banks and the IMF, youth unemployment has doubled since 2008 and now stands at 46 percent. In second place in the European rankings is Greece, the first country to be bailed out by the European Union and to install austerity measures, with a rate of 40 percent. In third place is Italy (28 percent), followed by Portugal and Ireland (27 percent) and France (23 percent).

In Britain, where youth have taken to the streets in a wave of riots and protests in a number of the country’s main cities, unemployment hovers around 20 percent. A recent report from Britain’s Office of National Statistics reported that joblessness among people between the ages of 16 and 24 has been rising steadily, from 14.0 percent in the first quarter of 2008 to 20 percent in the first quarter of 2011—an enormous 40 percent spike in just three years.

According to the latest statistics, Europe’s biggest economy, Germany, has one of the lowest official rates of youth unemployment (9.1 percent), but these figures are deceptive. Due primarily to the policies introduced by the former Social Democratic Party-Green Party coalition government (1998-2003), Germany has one of the most broadly developed low-wage job sectors in Europe.

In 2010, no fewer than 7.84 million German workers were employed in precarious so-called “atypical types of employment”—i.e., agency work, temporary work and part-time jobs involving less than 20 hours of work per week. Many of these workers earned €400 or less per month. Recent figures show that the wage levels of such workers have actually declined in recent years, thereby compounding the pool of so-called “working poor” in Germany.
The German Statistical Office notes that nearly 40 percent of young Germans able to find work are invariably employed in such forms of precarious work, which pay badly and are strictly temporary. Exact figures on underemployment in Germany are difficult to obtain, but the extreme situation for youth in the country is reflected across Europe—i.e., the official statistics for youth unemployment would swell enormously if they included the millions who are underemployed.

The growth of long-term unemployment for a broad layer of European youth, including very many highly educated young people with academic qualifications who are unable to find work, has led a number of commentators to refer to a “lost generation”.

The social problems encountered by the young unemployed are compounded by the social cuts and austerity packages being introduced across Europe. All of these measures aimed at restocking the vaults of the banks and the swelling the portfolios of the European capitalist elite hit youth the hardest.

It is no coincidence that the suburb of London where protests and riots began last weekend—Tottenham—has the highest level of joblessness in London, and the 10th highest in Britain as a whole. Just to the south of Tottenham, the London borough of Haringey has already slashed its youth services budget by 75 percent this year. These cuts are part of a package of measures aimed at driving down the borough’s budget deficit along the lines advocated by the Conservative government headed by David Cameron.

The closure of youth facilities, including libraries and sports clubs, together with the slashing of welfare payments, such as youth allowances and housing subsidies, means that unemployed youth are condemned to poverty and denied any opportunity of using their leisure time creatively. Such conditions are not exclusive to London and Britain. They prevail across Europe and have been engineered by governments of all political colours—conservative, social-democratic and Green.

In Britain, leading politicians and both the gutter press and so-called “quality” press immediately sought to deflect attention from their own criminal activities by demonising protesting youth as “yobs” and vandals. For significant sections of the European press, however, the link between what took place in Britain this week and the complete lack of a perspective for millions of young people in modern Europe is evident.
Two commentaries in the German language press make clear that some sections of the media are concerned that the systematic wiping out of jobs and social protection for youth could have not merely explosive, but also revolutionary social implications.

On Thursday, the German Der Spiegel wrote that August 12 is International Youth Day, and posed the question: “This should be a day of celebration and joy…. But is there something to celebrate? Hardly.”
The article continues: “The numbers are so alarming, because they give a face to the European debt crisis. They show that the crisis in the euro countries is not just a problem for the treasuries of bankrupt countries, but has fatal consequences for the population. And, as is so often the case, it hits youth first.”
The article then draws attention to the hundreds of thousands of youth who took to the streets of Athens and Madrid to protest against austerity programmes and makes a parallel with the most recent protests in Britain, concluding, “In London it seems there is no holding back this hopeless generation.”

In Vienna, the Austrian Der Standard writes: “Governments are showering billions into the markets with one hand to keep our resident devil, the Dow Jones, happy. With the other, they’re slashing social benefits. That policies of this sort are received as pure cynicism in countries like Spain, Greece and Britain, where youth employment is around 44, 38 and 20 percent respectively, is a puzzle for the minuscule elite, who discuss the difference between frustrated protesters and criminals over tea while worrying only about the state of the money markets.”

The article continues that the solution is not “extra police and empty phrases, but action. And quickly”. The article concludes, however, by warning: “But who knows whether the generation demonstrating in the streets will see that day come.”

Plans to introduce “work for your dole”. – Guildford Against Fees And Cuts

                                     Workfare to be imposed in Britain

Britain is being subjected to a savage programme of social engineering, designed to create an economy where millions work for much less than the present £5.93 an hour minimum wage. This centres on plans to introduce workfare for the long-term unemployed, who will be forced to work for their benefit plus a £1-an-hour top-up.

Work and Pensions Secretary Iain Duncan Smith is set to introduce US-style compulsory “workfare”, under threat of withdrawal of benefits to entire families. A new “claimant commitment” will include sterner conditions, notably the threat that unemployed people who refuse community work or the offer of a job may lose their jobseeker’s allowance for three months; if they refuse twice, six months; and three years on third refusal.

The £30 or £40 a week, or £1 an hour, those forced to do such work will receive is one sixth of the present minimum wage and sets a new benchmark that will see it effectively nullified.

The meagre £65 a week unemployment allowance will be removed for three months on a first “offence” of refusing work, six months the second time and three years after a third breach. People will also be subject to penalties for failing to turn up on time or not working hard enough. Those convicted of benefit fraud could also have their benefits stopped for three years. There will be no right of appeal.

The net result will be the mobilisation of the unemployed, including single mothers and over a million of the sick and infirm on incapacity benefits, as a “reserve army of labour”. They will either directly replace existing workers’ jobs or be used to depress wage levels.

This exercise is being sold first of all by whipping up populist prejudice against the supposedly “workshy” and the “feckless”, who are unemployed as a “lifestyle choice”. Prime Minister David Cameron declared that “a life of benefits will no longer be an option”. People “don’t pay their taxes to pay for people to stay on benefit”, he said.

Secondly, the government is packaging the measure together with a pledge to introduce a single universal credit that will replace at least 30 existing benefits, including jobseeker’s allowance, housing benefit, child tax credit, working tax credit, income support and employment support allowance. This is claimed to guarantee that those who move into work but still need to claim benefits will be penalised less heavily than at present for the wages they earn above benefit level. Presently this penalty can be as high as 90 percent.

Smith also played the anti-immigrant card, saying that it was “a sin” that 70 percent of the extra jobs created over the last 14 years had been taken by immigrants. He claimed that this was because British people were not “capable or able” to do them, when for the most part the issue was they were so poorly paid.

The supposed “carrot” cited by the government is nothing of the sort. “Making work pay” in fact means a subvention to employers who pay poverty wages. As for working while claiming benefits, people coming off welfare into work would still lose 65 pence of each pound they earn on top of their benefit. The Economist pointed out, “Even when the universal credit is introduced, claimants earning enough to pay the basic rate of tax will face a marginal deduction rate of 76 percent.” Around 300,000 people in work earning below the tax threshold would also face an actual increase in the rate at which they lose income in benefit abatement and taxes.

An additional iniquity is that the new system will be based on making claims and checking payments online. An estimated 1.5 million unemployed people do not currently have Internet access, according to the government’s own figures.

The provisional timetable for introducing a universal credit will not begin until October 2013 and will not be completed until October 2017. In contrast, punishing those who “refuse” jobs will start immediately.

This potentially will have a direct impact on 5 million people—1.5 million on unemployment benefit, 700,000 single parents and 2.6 million on incapacity benefits.

The chancellor has already cut the welfare budget by £18 billion, which has hit the poor the hardest, including not only the lowest paid but all working families with a household income of less than £30,000, who, after the October Spending Review, are worse off by between £700 and close to £2,000.

The impact was spelled out by the heads of various charities. Oxfam’s director of UK Poverty, Kate Wareing, warned that the changes “will expose people to the risk of destitution”. Richard Hawkes, chief executive of disability charity Scope, said the “white paper does not address the state of the employment market today, nor take into consideration the reality of people’s lives.” He said the “regime of sanctions” would affect “disabled people who do play by the government’s rules …Who try repeatedly to get work but are not successful.”

Sally Copley, head of UK policy at Save the Children, said, “It is hard to see how Britain’s poorest children are going to be helped using sanctions creating a climate of fear. It is children who will suffer when a single mum is told to take a job, but there is not suitable childcare available. It is the children who will suffer when the safety net is withdrawn for three months, living in homes where mums and dads already struggle to put a hot meal on the table or buy a winter coat.”

Almost 2 million children are living in workless households.

The full impact can be measured by Duncan Smith’s claim that his reforms will reduce the number of workless households by 300,000, meaning at least that many will be forced into low-paid employment. But many more will be forced off benefits because they will be penalised for not taking jobs that are simply not there to take! Duncan Smith asserted that there are 450,000 vacancies for jobs, “even as the country is coming out of recession”. But there are 5 million out of work and this is set to rise by at least 1.6 million as a result of the impact of government cuts and an incalculably greater number in the event of a widely expected second recessionary wave.

Even now, the number of long-term unemployed alone has more than doubled since 2008, to 797,000—outstripping by 330,000 the 467,000 job vacancies.

An insight into the long-term aim of these measures—targeting broad layers of workers—can be gleaned from the comments of Professor Lawrence Mead of New York University, one of the main influences behind “workfare” reforms in the US, who was consulted by the government on its planned reforms.

He told the Guardian, “People in the UK still think it is normal to go onto welfare. In the US they don’t. In the US it is a last resort. … They wanted me to talk about Wisconsin and New York. They really wanted to know how to do it”. The Guardian reports that he told the government to change people’s “mindset … so that they do not see welfare as a viable alternative”. This had been achieved in the US because benefits have been driven so low. In Texas, for example, the average monthly benefit is around £46 per person.

There is no precedent for such profound shifts. This would take Britain back to a situation before the welfare state was created, to the conditions that existed during the Hungry Thirties, when people starved on the streets, homeless and destitute. It is equivalent to the “shock-therapy” imposed in the Soviet Union and Eastern Europe following the downfall of the Stalinist regimes—which facilitated an economic crisis twice as intense as the Great Depression.

In the face of this assault, the working class is leaderless. The Labour Party has pledged its backing for workfare, with Shadow Work and Pensions Secretary Douglas Alexander declaring, “We support the underlying principle of simplifying the benefits system and providing real incentives to work”—barely bothering to add the caveat that there must be jobs for people to take up for the scheme to work.

Meanwhile the trade unions continue their efforts to prevent any opposition to the government being mounted. Duncan Smith made his announcement the week after the Fire Brigades Union called off the strike by London firefighters and the same week as further strikes by BBC journalists were cancelled. The Trades Union Congress is not mounting a national protest against the government’s £83 billion cuts until March 26 next year.

The struggle against austerity must be waged as a united offensive to bring down the hated Tory/Lib-Dem government and replace it with a government answerable to working people and pledged to socialist policies. It means rejecting all attempts at pitting one section of workers against another and mobilising the employed in the public and private sector, the unemployed, students and pensioners. Achieving this demands a political and organisational break with the rotten organisations of the misnamed “Labour Party” and “trade unions” that are more properly understood as a specialist arm of management in disciplining workers into accepting “sacrifice”.
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By Chris Marsden
13 November 2010
WSWS