Britain - Welfare Reform: deserving of universal discredit

Apr/Jun 2012

The ConDem's Welfare Reform Act, first proposed in November 2010, finally passed through the House of Lords on 29 February 2012. After the obligatory "Royal assent" on 8 March, it became law.

For over a year it had been in various "committee" stages and then its final version ping-ponged between the House of Lords and House of Commons over the last few months. The 7 "defeats" which it "suffered" at the hand of Church of England Bishops and a few Labour Lords, may at least have highlighted some of the most drastic aspects of this attack on welfare. But predictably, each time the "Honourable Lords and Ladies" sent an amendment back to the House of Commons, MPs there duly voted it down, claiming that this bill was outside the Lords' jurisdiction, due to "financial privilege" - apparently a debatable point! And then time ran out, just as it is meant to. So good old British democracy triumphed again.

The aim of the Reform is simple: a radical cut in welfare expenditure - and the government has never made any bones about this - ostensibly to help lower the budget deficit. But in reality, to fund all kinds of handouts to big business and the wealthy.

It will cap the total amount of benefit paid to the jobless and it will merge most income-related benefits, as well as housing benefit, into a new single "Universal Credit". The Con-Dems claim that this will ultimately "make work pay"! They do not mention where the "work" nor the "pay" will come from, however.

The idea seems to be that the simpler and fewer the benefits, the easier it will be to cut them! And if benefits are cut enough, of course, even the worst wages would look as if they "pay more". So if there are enough coercive measures in the law, no matter how bad the wages, terms and conditions, the jobless would (they hope) have no alternative but to comply.

The sick and disabled are also singled out for special attention - i.e., new cuts to their support, with more stringent tests to qualify, if that were possible - with a new benefit, called the Personal Independence Payment (PIP) to replace the old Disability Living Allowance.

Prime Minister David Cameron called his reform "a historic step in the biggest welfare revolution in over 60 years. (...) Our new law will mark the end of the culture that said a life on benefits was an acceptable alternative to work".

Though he has not specified it, we guess that Cameron's "historic" reference is to the first National Insurance Act of 1946, passed 66 years ago. However this Act brought in the very first - and at the time rather more equitable, earnings-related, unemployment benefits, plus retirement pensions, widows' benefit and death grants. And although it was by no means "revolutionary", but merely designed to rebuild British capitalism in the midst of postwar devastation - in today's context, the Coalition's law is more like a counter-revolution, meant to patch up a decrepit capitalism which is falling apart!

As for replaying the old "dependency culture" tune - as if it was not the case that this dependency is the very "culture" promoted by the capitalist system itself! After all, doesn't it rely on the presence of a certain (and today, ever-increasing!) level of permanent unemployment to keep the labour market "competitive" i.e., to keep wages down? And are not welfare benefits, first and foremost, expected to act as a top-up to low wages and high rents, so that bosses do not need to pay their workers a "living wage" and so that landlords can buy luxury yachts?

Who is "dependent" on the state's welfare, if not the capitalist class, for this enormous subsidy to their profits?

Cameron knows all of this, just as well as he knows how impossible it is for most of today's unemployed to find work "which pays".

Behind the 8.3% official unemployment rate, as many as 23.1% of people of working age in this country are "economically inactive". And of those in work, nearly 27% (and rising) are part-time workers, unlikely to manage on their restricted wages, especially if they are breadwinners! These 2.65m part-timers make up the bulk of today's "working poor".

But at least Cameron's demagogic tribute to his Work and Pensions Secretary, the "honourable" Iain Duncan Smith served the purpose of pleasing part of his own political gallery of provincial reactionaries and "entrepreneurs", apparently representative of the country's "taxpayers"! Duncan Smith had "resisted the criticism of charities and pressure groups" - like those representing the 21% of households with disabled members and 16% of pensioners already living in poverty - and "stood up against the abuse that left taxpayers footing the bills for people on £30,000 and even £50,000 a year in benefits. It's a fair principle: a family out of work on benefits shouldn't be paid more than the average family in work", said Cameron.

Yes, an "abuse" whereby "the taxpayer" pays for the ever-soaring rental payments - mainly in London - unscrupulously charged to jobless families by fat landlords. Yes, jobless families, for whom there is no socially-provided housing, since Cameron's political grandmother, Margaret Thatcher, began the big council housing sell-off and the social-home-building freeze in the 1980s, which every government, ever since, failed to reverse!

In London the weekly rent for a 3-bedroomed home can be as "low" as £390/week in Newham's Stratford, or as high as £2,000/week in South Kensington. It is indeed an "abuse", which, while paying "market rent" in the form of thousands of pounds in housing benefit directly to the aforementioned landlord, leaves poor families with children in large, but cold and damp houses because they still cannot afford their heating bills. The benefit paid directly to them which is meant to cover their living expenses inevitably leaves them way below the poverty line!

The examples seized upon of "huge" housing benefit payments come from Greater London (54% of households who will lose out as a result of the capping of this benefit are in London), plus a few other super-high rental cities in the South-East, where the one thing which could have been done over recent years, was not done - to impose rent controls!

Labour governments under Blair and Brown actually presided over the evolution of this super-whammy for property speculators, developers and upwardly mobile "investors" with their "buy-to-lets". But the irony which cannot be missed, is that the real mainstay of Cameron's and the Tory Party's support, despite all the rhetoric aimed at "taxpayers", actually comes from those who could not care less where "taxes" go, since they hardly pay any!

In this article we hope to be able to show how the new Welfare Reform will not only hit the already too poor section of society, with social consequences unseen in Britain up to now. But how it is designed to divert an even larger part of the welfare bill to yet more parasitic private "social entrepreneurs". They will be cashing in ("at taxpayers' expense"!) on all of the new administrative tasks, IT programmes, interviews, tests and coercive procedures which have been invented for their sakes, a door first opened by Blair's Labour government when the Reed employment agency (not the only one) was brought into partnership with the Department of Work and Pensions (DWP) to manage "welfare to work" (and other) programmes.

Testing the water

When the ConDems came into government in 2010, with the aim of cutting the so-called "public spending deficit", they immediately seized upon the huge annual expenditure on welfare, which, they pointed out, had risen by 45% (in real terms) in the 10 years to 2009/10. Never mind that at the same time, unemployment and housing costs combined, were increasing by just as much, if not more - and at and accelerating rate by the end of 2007, thanks to the onset of the banking crisis! And never mind either, that this reflected quite accurately the tremendous increase in poverty which the rescue of the bankers with "public money" caused and is still causing.

The £192 billion annual welfare bill, representing over 28% of total government expenditure, is, of course, by far the largest part of government spending, compared to the £98bn spent on health, the £50bn on education and the (dispensible) £35bn spent on defence (!). Government ministers announced that they intended to make "savings" out of welfare of at least £18bn per year by 2014-15.

By November 2010, they had come up with their radical savings plan, called "Universal Credit: welfare that works". This was expanded upon until it appeared in its final form as today's Act of Parliament. But other measures affecting benefits, some of which had already been legislated for by the previous Labour government, were implemented in the meantime.

It is worth summarising these, because this is what is already being bled out of the poorest sections of the population even before the implementation of the new reforms. And this will allow substantial "savings" before the new system kicks in, during the next 5 years.

First, in October 2010, there was a cut in the support for mortgage interest payments for those who had lost their jobs - from 6.08% to 3.63% regardless of the rate of interest charged by their bank, threatening at least more difficulties for those with mortgages who had lost their jobs, if not repossession of their homes. Then came the scrapping of two small universal (meaning they are paid to everybody, regardless of their incomes) grants which Labour had brought in for pregnant women (Health in Pregnancy Grant) and for children (the Child Trust Fund) - as a political gesture to highlight how "profligate" their predecessors had been.

In April 2011, when the Retail Price Index was generally replaced with the CPI, for the annual upgrading of all benefits (except, at this time, the state pension) this meant an effective global cut of 1-2%. Labour's Sure Start Maternity Grant was then limited to the first child only and the universal Child Benefit rates were frozen for 3 years. Housing benefit for those in private accommodation was cut for all new claimants, capped nationwide and limited to 4-bedroomed properties. Tax credit for a new baby (worth £545/year) was eliminated and various other cuts introduced to the tax credit for low-income families, including the subsidy for childcare, which was cut from 80% of costs to 70%.

The Child Poverty Action Group put out a press release on Good Friday called "Bad Friday: the tax bombshell hitting low income families on Friday 6th April" which explained how £2 billion-worth of cuts would hit families at the start of the Easter weekend, most of which are independent of the new legislation.

For instance, the change in the rules for Working Tax Credit (WTC) which means that couples with children can no longer claim it, unless they work at least 24 hours between them - and unless one works at least 16 hours (so if they each work 12 hours, they are not eligible!).

In fact WTC is usually paid to full-time low-waged workers - working 30 hours or more, but an exception had been made for couples with children and also for older single workers. The government itself estimates that 210,000 families (with 470,000 children) could lose all of their £74.42 per week tax credit due to this immediate rule change. A big saving for the DWP (£550m, according to CPAG), but what will happen to the families concerned? Apparently only 17% of employers surveyed by the organisation "Working Families" said they "might" be able to increase their employees' hours!

One might ask, of course why tax credit is linked to the number of hours worked in the first place? Why is it not linked to earnings? Because, says this government, (and Labour's Gordon Brown before it), this is not meant to be a "hand-out", but a "hand-up", to "increase the incentive to take on work". If there is no more work available, too bad.

Indeed, the justification used for WTC, at the time of its introduction under Blair/Brown was to get families out of the so-called benefit trap, whereby workers had little choice but to stay on benefit because if they moved into the only job on offer - a low-paid part-time one - they would end up with a lower income than they had while on benefits. And now this is once more the justification being used by the ConDems to scrap WTC and replace it with Universal Credit!

What is significant about the immediate cut in WTC for couples, is that it will in fact be reversed once Universal Credit comes in, when new rules will mean than "every hour worked will pay"! Ministers have implemented this interim cut for no other reason than to achieve their £2bn "savings" target this year! By the time Universal Credit (UC) comes in, the restored payment to such couples will be financed by taking money from other benefits which "UC" will have cut.

A special WTC "concession" for being 50 years and over has already been cut altogether. So, for instance someone who was working 30 hours and earning £10,000 a year, would have got a WTC top-up of £62 a week. Now they will only get £23 a week!

Another significant immediate cut is the cut in child tax credit, (not the universal child benefit, which was cut in Osborne's spring budget, but the income-related and means-tested credit). This will no longer be paid to families earning up to £41,500, but only to those earning less than £26,000 with 1 child or less and to those on £32,000 with 2 children. Another £465m will be "saved" to the Treasury as a result!

Falls in income due to pay cuts or loss of hours could previously also be made up by the tax credits system: but now income has to fall by more than £2,500 per year, for any kind of cushioning to be available. And there are numerous other petty cuts, like not allowing the backdating of WTC claims for more than a month - whereas this used to be 3 months. In fact, given the complexity of claims, even more backdating was actually needed!

As to those among the already poor who suddenly experience a change for the worse in their circumstances, they will no longer have access to emergency grants or loans from the Social Fund, which is to be abolished. In 2009/10 alone, it provided over 16 million "awards" to those in need, in the form of crisis loans and "last resort lifelines". This is supposed to be replaced by a non-ring-fenced grant to English local authorities - which will decide how to distribute the money, if they have it - since it is not ring-fenced! Another one of those "discretionary funding schemes" like that supposedly provided to replace council tax benefit, which probably will disappear among the local council cuts.

Also from this April, those disabled who are considered fit for work (including those who are already working) will have a time limit placed on their receipt of Employment and Support Allowance of just 1 year. We will come back to the special situation of the disabled later, given the extent of new attacks which they face.

The tabloid press has done its usual job of preparing the way for the ConDem's legislation, with "shocking exposures" of how this or that "benefit cheat" has been caught by a roving reporter, and found to be enjoying him or herself in an amusement park, or working on the side, or living in a privately-rented mansion, paid for on housing benefit! "Thrill seekers allowance" was a front page headline in the Sun newspaper exposing a woman claiming Disability Living Allowance. And it was the Sun newspaper which alleged that 100 families were in receipt of "enough housing benefit to pay off a mortgage of £1 million or more", no matter that this was twisting the truth inside out!

Reactionary politicians and their tabloid friends would never "expose" the reality of life for these families. Why let the truth get in the way of a good story - or a reactionary piece of legislation, which threatens to take us back to the 1800s and the time of the Poor Laws?

Funding the landlord's yacht

The "cap" on the total benefits anyone can receive, can be said to be the main political feature of the Act. It is intended to play to the prejudices against those who cannot work for whatever reason, that they are somehow better off than those who "choose" to work and are actually languishing in luxury ... on benefits, like Job Seeker's Allowance of £71/week!

So the Department of Work and Pensions itself says the following in its "Benefit Cap" impact assessment: "the state can no longer afford to pay people disproportionate amounts in benefit each week in welfare payments, sometimes in excess of what someone in work may take home in wages. So, from 2013, the government will introduce a cap on the total amount of benefit that working age people can receive so that workless households will no longer receive more in benefit than the average wage for working households." This was echoed by Cameron, of course, when he ushered in the new Act. Never mind that the "disposable" income from benefit, after housing costs, means that these workless households are well below the poverty line, let alone below the "average wage".

The "cap" is expected to be set at £26,000 per year for couples and lone parents with children (no matter how many) and £18,000 for single people without children. It will not apply to those on Working Tax Credit.

For out-of-work working age households, the total household benefit - comprising housing benefit, plus income support, Job Seekers Allowance, child benefit, child tax credit, and carer's allowance if that applies, will therefore be limited to around £500 per week for a couple/lone parent, and to around £350 per week for single people without children. Local authorities will apparently be expected to apply the cap via housing benefit, until the new Universal Credit comes in, although they are not clear how they will do this! Extra non-cash benefits like free school meals, but also council tax benefit as well as childcare costs will not be included in the capped amount.

Those doing some work and in receipt of Working Tax Credits will be exempt from the cap so that it will not "reduce incentives to (more) work"... Those people on Disability Living Allowance will be excluded as well. There is meant to be a 9 month grace period before the cap in implemented for anyone who has lost his or her job "through no fault of their own".

Up to now, at least in theory, there has been no limit on the total amount of benefit a household could receive in state support. So this cap is a fundamental change. What is more, it primarily targets Housing Benefit (HB) payments - the most important benefit for the poor, since it guarantees them a roof over their heads, if nothing else.

But HB has already been cut substantially in the last 2 years, and was the target of Labour "reform" before that - most significantly in 2008, when "Local Housing Allowance" rates were brought in. The object of the LHA was to cut the HB payable to social tenants who, through no fault of their own were living in private rented accommodation - and therefore claiming ever more HB to pay the ever rising rentals charged by the new and growing class of opportunist landlords. Figures published last year gave the number in private rented accommodation as 1.5m out of the 4.8m who claim HB.

LHA set the amount of HB payable at the median of the rents of similar accommodation in the area in question. At the same time single claimants who were 25 years or under, were forced to take rooms in shared flats or houses. They could no longer rent a one-roomed self-contained flat, as their rent would not be covered by their HB.

Typically for the current crop of politicians, (of whatever party) there was no question of forcing the landlords to charge lower rentals. Labour's LHA meant claimants were made to pay "in kind" by either being forced to move to cheaper homes, if their rent was higher than the set median, or else top up the rent out of their own pockets - hardly possible.

And when the ConDems came in, of course they too avoided a confrontation with landlords and just went further with the same squeeze on claimants. The age limit for single jobless forced to take rooms in shared homes was increased to 35. New upper limits for the LHA were set at the 30th percentile of the local rental "market" rather than the median as before last year in April! The maximum payable, regardless of location, would range between £250 per week for a 1-bedroomed to £400/week for a 4-bedroomed or larger home. Increases in HB were to rise according to the lower CPI rather than RPI.

It may seem paradoxical that the ConDems have now also decided (it is in the new Act) that claimants should no longer have their HB paid directly to the landlord, but rather must pay it themselves. However this means that landlords have more flexibility to end tenancies and raise rents and in fact it also fits better with a system where tenants have to top up the rents they pay, more and more from their own pockets, since HB is no longer going to cover most of the rent they owe. Anyway, landlords will still be able to apply to have rent paid directly to them.

Already last year the LHA reforms caused housing charities and political opponents of the government (but also Tories with vested interests, like London's mayor, Boris Johnson) to accuse the government of "social cleansing". That is, forcing claimants out of expensive areas like central London. A Cambridge University study predicted that by 2016, 2/3 of London boroughs would be unaffordable to those on LHA. A BBC survey done at the beginning of last year had already found 13 councils which were rehousing tenants outside of London.

After being shouted at by their own red-faced Boris, the ConDems announced a tiny measure which they say could partially compensate some households who apply for additional help from the council to meet their rising rents. The government contribution to a Discretionary Housing Payments fund, administered by councils, was accordingly increased by £10 million in 2011-12 and £40 million each year from 2012-13. It will pay for very little...

The moving out of poor families from certain areas in London is probably what the policy intends over the long term. When appraising the effect of the benefit cap, the DWP's cap "designers" wrote: "the impact on those affected will be that they will need to choose between working enough hours to qualify for Working Tax Credit (and the policy strengthens the incentive to do so); reducing their non-rent expenditure; or reducing their rent expenditure, either in situ or by moving elsewhere." As if it is a choice! As if a Job Seekers Allowance of £71/week gives you room for manoeuvre, etc., etc., but for them this is no problem because it is not their problem.

However, they also say: "the modelling suggests that in the absence of any behavioural response (!!) to the policy, around 67,000 households will have their benefits reduced (...) in 2013/14 and 75,000 in 2014/15". In fact the DWP does not expect very much "behavioural change" in the short term "as differences in rent will be small in the early years compared with the transaction costs of moving" and it only expects to "save" £250m in 2014/5. Which is chicken feed. The real target of the reform is landlords - not to penalise them, but to free them from previous constraints, so that they can market their properties elsewhere and increase rents without having to negotiate with local authorities.

We should also mention here, the further cuts to housing benefit for all unemployed, which will come into effect under the new Universal Credit.

This is the notorious "bedroom tax" which the Bishops and Lords tried unsuccessfully to get removed from the law. Already anyone renting privately had limits on the size of their home imposed. Now this limit will be extended to social housing, where households who are deemed to be "under-occupying" their homes will lose part of their HB from April next year. Children under 16 of the same gender and under 10 of the opposite gender will be expected to share a room. The cut will be 14% of HB for one extra bedroom and 25% for 2. The details are not yet finalised, but imagine the level of snooping required to implement this! The government has backed down on one thing already - so that claimants with disability, who need a non-resident carer, will still be entitled to receive funding for a property with one extra bedroom.

The other cut, meant to be implemented at the same time as the "bedroom tax", was a 10% reduction in the HB payable to those on Job Seeker's Allowance! The idea was to save £100m and "improve work incentives"! This has, however, been taken out of the legislation. For now.

The DWP's impact assessment for the "household benefit cap" has a section headed "specific impact tests: checklist" and under the heading "social impacts" including "health and well-being" it ticks the box "none"! That should say it all.

One cap-size fits all

Universal Credit, which is the centrepiece of the new Act is, to be rolled out in 3 phases, starting in October 2013 and ending at the close of 2017. It will, in a nutshell, systematically merge all the different benefits which are not contribution-related, into one "universal" benefit, replacing Income Support, Housing Benefit, Child Tax Credit, Working Tax Credit, and income-based Job Seekers Allowance, for low-paid and out-of-work over-18s and under 65s.

The ConDems say that it will remove the present "financial disincentive to work" (what used to be called the "benefit trap") which results from the "taper" - the rate at which benefit is reduced, as earnings increase. At present, different tapers apply to different benefits - so now there will be one "universal taper" which they claim will ensure that there is "never" a situation where someone is better off on benefit than in work! The taper rate is yet to be disclosed, but it is thought it will be around 65% - i.e. for every £1 earned, 65p will be deducted from benefits.

The "disregard" - which is the amount one can earn before the taper cuts in, will vary according to the situation of each claimant (couples and children, dependent adults, etc.). However, for single persons without children there will be no "disregard" at all.

The claim that no-one will be "worse off" in work, has been put into question by several organisations - including "Family Action". They want the taper rate to be reduced to 55% (instead of the proposed 65%) as they calculate that there will be at least 1.5m low-waged households which will lose even more than they do at present.

But the government itself is quite clear about the numbers who will lose out under UC. They say 2.8m households will have higher entitlements and that of these, 1.3m will get more than £25/week extra. But, after the transitional period during which UC is fully rolled out, they admit that 2 million households will lose out. But they say it will not be much more than a cut of £25/week. Not hard to draw the conclusion that this is taking directly from Peter to pay Paul!!

And what about the abolition of Council Tax Benefit? In fact the government is playing a very nasty trick, not only on the unemployed and those on low pay, but also on local authorities - because it will now be up to the latter to find ways to replace this benefit with "locally managed discretionary funds" to subsidise those who cannot afford to pay it. And if they cannot find the means to do this - given the already dire state of the cuts-ridden local government budgets all over the country - is it just "too bad"?

Of course there has to be the cherry for the private vultures to pick - and this will be, at least in part, provided by the new coercive regime which will accompany the implementation of Universal Credit. Claimants will have to sign a "Claimant Commitment".

First, they will have to agree that until they find employment, "looking for work will be their job". They will be expected to be available for work immediately; they will need to undergo a work-focused interview; work preparation, and accept placement for up to 4 weeks in workplaces for which there need be no wages paid - in order to get "work experience". Actually, this is part of the previous labour government's legislation, amended slightly from their Welfare Reform Act of 2007!

Sanctions for failing to fulfil a work-related "requirement" will include the withdrawal of benefits. But again, this was a path already well-paved by Labour. The many agencies which today "place the unemployed" in what are usually non-jobs, with zero-hour contracts and often zero-wages, like A4E or Maximus, or those who now police the disabled and sick like ATOS had already settled into their parasitic existence under Labour.

Labelling the disabled as con-artists

The main effect of ConDem "reform" on the benefit regime for the chronically ill and disabled will be to make these benefits even harder to get. There are two aspects. First, something which has been going on since 2011, i.e., the transfer of all those still on the "old benefits" like Incapacity Benefit, Income Support, and Severe Disability Allowance onto the Employment and Support Allowance (ESA) - with which Labour replaced IB in 2008.

The second change, which comes under the new Act, is to replace Disability Living Allowance (DLA) for people of working age, with a Personal Independence Payment (PIP). DLA was a non-means-tested benefit for all disabled and chronically ill dating from 1992, (the elderly got Attendance Allowance) and this had care and mobility components essential to pay for day-to-day needs for those unable to work.

The DLA is already being directly cut by removing the mobility element in it which supported people in care homes to go out.

The PIP consultation is not over, so all the regulations are not yet fixed. But what it will certainly require is the reassessment of all claimants from 2013 onwards, with the apparent aim of cutting entitlement by 20%! The government complains that there are far too many people claiming DLA - (3.1m in February 2010) costing £11bn in 2009-10. The assessment process for PIP will be based on an individual (face to face) examination, unlike DLA which only required self-reporting by the claimant (plus further evidence if needed).

Another cut brought in by the new Act is that the provision for the young disabled to apply for the higher contribution-based Employment Support Allowance (ESA) without having paid NI contributions, has been discontinued.

Imposing more and more stringent qualifying "tests" on the sick and disabled has been the main approach of governments ever since 1997, when Blair's ministers attempted to attack the phantom 1 million "malingerers" who, they claimed, were fraudulently claiming Incapacity Benefit at the time.

The Work Capability Assessments (WCAs) for ESA, administered by Atos, the French-Dutch IT giant are so stringent that it rejects 90% of applicants who were formerly eligible for IB! On appeal it has been found that the agency (Atos) has wrongly classified claimants as fit for work in 41% of cases (figures from one court of appeal in Hull, but representative of the general picture). There is an official ongoing review into WCAs by Professor Michael Harrington. But although he has made recommendations - like for Atos to have a physical presence in benefit offices, this was never implemented because, said Atos, which gets £100m a year for this job, it does not have enough staff! The assessments are by now discredited enough as unfit for purpose, but they continue to be used to designate the sick and disabled as unfit for disability benefits.

And now if ESA claimants are placed in the so-called "Work Related Activity Group" by this (computer generated, virtual, point-based!) Atos assessment, having been considered capable of some kind of work, they will only receive ESA for one year. This means moving from ESA which pays £97/week to the lower JSA rate for instance, paying £71/week - if no work is available.

Other reforms also impinge on the current benefits paid to the disabled and sick. For instance, while DLA recipients are exempt from the cap in housing benefit, they are not exempt from the lowering of the level of rents payable under housing benefit, which could force them to move to cheaper housing - without the adaptations for wheelchair access etc., needed. Obviously this does not make any sense, but no provision is made in the Act for this.

And then there are other cuts which have already been made, like the abolition of the £359m Independent Living Fund by 2015, which pays out an average of £300 a week, to help the disabled pay for carers so they can live at home and not in a care home.

It seems, in short, that nothing is safe from the ConDem knife. They have no scruples whatsoever and are prepared to kick a man or woman when he or she is "down".

It's the ConDems who deserve to be kicked!

The policy of the government with regard to welfare is straightforward, and in line with governments before it - to spend as little as possible and cut as much as it can get away with.

That the current Act provides for more fundamental changes, is consistent with the other "reforms" the ConDems have drawn up - like those for the NHS, for example.

The crisis and the "need to cut in order to pay off the deficit" are being used once more, as a convenient excuse to dismantle much of what remains of the Welfare State. Perhaps the capitalist class sees the writing on the wall for its system? Because to deflate the social cushions which were placed there in the first place (among other things) to prevent class conflict, is hardly the most sensible of options in a situation of economic crisis - with all the parallels there are, to the 1930s. But ill-advised or not, it seems they are going full steam ahead. But then greed has always made people blind!

Of course, shrinking the state has been a task bestowed upon all governments by the capitalist class, ever since the recovery of their economic system after the post-WW2 devastation was "fixed" by the "socialised" and interventionist European states. The capitalists were quite happy at that time to have a "big state" since it more or less rebuilt their fortunes.

However, after the first major economic crisis in the 1970s hit the capitalist class all around the globe, they began to utilise the state in the opposite way. All the more lucrative state facilities - whether for infrastructure, utilities or industry, which had previously been used to service capitalist needs were transferred out of the state and back into capitalist hands, via direct privatisation or subcontracting or other schemes so they could profiteer out of this "new" sphere, despite the crisis. But this meant they became even more parasitically dependent on the state.

By now, more and more unlikely parts of the state have been taken over, sold off, PFI'ed or PPP'ed to the private sector. So we get to the seemingly ludicrous situation, where even the Department of Work and Pensions, responsible for state welfare provision, is now "reliant" on private companies to carry out its most basic tasks! And yet the truth of the matter is that it is really these private companies which are totally reliant on the state. Benefit cheats? If there is a swindle being carried out against "taxpayers" this is it!

Ironically the new Welfare Bill was steered through both Houses by none other than Lord Freud, who crossed over from Labour to the ConDems and became their "Minister for Welfare Reform". In 2007 Blair had appointed him to advise DWP secretary of state, John Hutton. It was he who prepared the report which brought in the Work Capability Assessment and the ESA - recommending that much of this be farmed out to private contractors: "there are clear gains from contesting services, bringing in innovation with a different skill set, and from the potential to engage with groups beyond the reach of the welfare state." He has had his way, in bunches, with regard to outsourcing of welfare functions, but reaching the "forgotten poor" who do not claim benefit - this has never happened and certainly the government has no interest in it happening.

Yet, just taking the number of people of working age who are sick or disabled by a long term illness gives a figure of 5.1 million (General Lifestyle Survey 2007)! But at present only 1.9m claim incapacity benefit and 3.1m are on DLA. So what happens to the rest? There are far more people who need benefits than get them.

And the situation is not improving, but getting worse. The Acheson report, Inequalities in Health in 1998 found that " the early 1970s, the mortality rate among men of working age was almost twice as high for those in class 5 (unskilled) as for those in class 1 (professional). By the early 1990s, it was almost three times higher." The Marmot review, in February 2010 stated that "people in poorer areas not only die sooner, but they will also spend more of their lives with a disability... even excluding the poorest 5% and the richest 5% the gap in life expectancy between low and high income is six years, and in disability free-life expectancy, 13 years."

Work may be good for you - this is what the government keeps saying. But where is this "work"? The coercive nature of the new regimes to get the unemployed into a job, no matter how useless, inadequate or low-paid, let alone harmful, has led some to invoke the atmosphere of the early 1800s, when the poor were either considered "deserving" or "undeserving". And when the "undeserving" poor were put to work, breaking stones into gravel, in segregated prison-like workhouses - dubbed "bastilles". This they did in exchange for "board and lodging"!

There are no workhouses, of course, although there is growing homelessness. But in fact the policy of government - well-paved by the previous Labour regimes seems now to be something even worse. That is, creating a consensus that there are no "deserving poor" at all. All are "undeserving", if not outright "cheats". It certainly lets the capitalist class, which has refused to create real jobs, because it would rather play bingo with its profits, off the hook.

Britain has not got to the point where a large part of the population has to survive on food stamps, as is currently the case in the USA. But that will be where things end up, unless the working class closes ranks around the unemployed and the disabled and counter-attacks.