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New Labour aim is to abolish Incapacity Benefit

category ireland / britain | community struggles | news report author Wednesday October 19, 2005 19:48author by Anarcho Report this post to the editors

New labour are attacking people on Incapacity Benefit. But why people are on it in the first place and what it says about neo-liberalism and unemployment

Incapacity benefit: lies, damned lies and statistics


The latest of New Labour attacks on working class people has been announced. The aim is to abolish Incapacity Benefit (IB). Of course, the radical sounding rhetoric has been applied. Alan Johnson, the Work and Pensions secretary, described the changes as the most radical benefit reform for sick and disabled people since the Beveridge report. It is hard to imagine Beveridge not spinning in his grave at this spin. It seems customary these days to call the destruction of something its "reform" -- someone should remind New Labour that reform means make something better, not worse.

The reforms will scrap the present incapacity benefit (IB) system, which is currently received by 2.7 million claimants. Not that IB is much. The average amount paid is £85 per week. As a proportion of average earnings, IB paid to a single person fell from 17.4% in April 1995 to 15.2% in April 2003. This amount is to get even more miserly. At first, people will be put on a holding benefit paid at the jobseekers' allowance rate of £55 a week until they face a proper medical assessment, probably within 12 weeks. The majority will receive a rehabilitation support allowance set at just above the current long-term IB rate of £74 a week. But this allowance will be cut back to jobseeker levels - about £20 a week less - if they do not take steps, including regular work-focused interviews, to get them back to work

The aim, so it is claimed, is to help a million people back into work. How this will be achieved is hard to know, as there are still around a million people officially currently looking for work. Surely the "reforms" will simply mean that there will be two million people unemployed? Given that the IB reforms will not begin to bite before 2008, there is enough time to fight them. It also shows the fundamental optimism of New Labour's plans as the absorption of one million new workers is premised on the government's own desperately optimistic forecasts for economic growth. Wishful thinking is hardly a sound basis for a major policy.

As such, it is doubtful that this IB can be simply got rid of by a few cuts. The real effect will be to force people into abject poverty as few jobs are available, particularly in those de-industrialised areas with the highest IB numbers. As New Labour will not tackle the structural causes of such regional unemployment, it is doubtful that those on IB will be able to find meaningful work. This is particularly the case when we look at why the UK has so many people on IB in the first place.

The work and pensions minister, David Blunkett, stated that there is "something very strange has happened to our society" if 2.7m people are now claiming incapacity benefit. In a way, he was right: she was called Margaret Thatcher. He may have heard of her -- the government he is part of seems intent on consolidating her evil legacy. So while Blunkett told claimants to "Turn off TV and work," perhaps they should reply by telling him to read a history book?

As such, it is disingenuous to hear the Tories demanding answers to why nearly 3 million are on IB. When Michael Howard was Employment Secretary, managers of Job Centres in high unemployment areas were instructed to put as many people as possible on to IB in order to reduce their unemployment register. Looking at those currently on IB, they are concentrated in areas of industrial decline such as Merseyside, the Northeast of England, and South Wales. In effect, the unemployed there were simply categorised as "sick."

In other words, the Tories deliberately used incapacity benefit to disguise unemployment during their period in office. That was not all. Faced with the exploding unemployment their economically illiterate policies helped cause, the Tories did little more than combat the statistics by revising how unemployment was counted at least 12 times over their 18 years in office (Labour denounced this while in opposition but, strangely, failed to change back to the old ways once in office). Each change unsurprisingly revised the numbers down.

Yet in spite of this unemployment in 1997 was still at historically high levels compared to the 1950s, 1960s and even the dreaded 1970s. This changed slightly under New Labour when, according to Gordon Brown, after inheriting close to 2 million unemployed, New Labour had reduced that figure to "less than a million, the lowest for 29 years.'' It is worth remembering that Milton Friedman, the inventor of the utterly dis-credible and subsequently discredited Monetarism Thatcher imposed, said that he expected only a minor jump in unemployment in the short term when his ideas were applied. Nearly three decades is hardly short-term!

That the UK has low unemployment is, sadly, a myth based on semantics and the manipulation of statistics. The high numbers of ill people in Britain is an obvious sign that its economy is not as healthy as is regularly portrayed. It all depends on how you measure unemployment. While the UK government claimed that 2.9% claimed jobless benefits, the International Labour Organization presented a slightly less flattering figure of 4.7% based on their way of counting the unemployed. In other words, it simply means that unemployment has been redefined rather than reduced.

To get a real idea of unemployment, you need to count both registered unemployed and those claiming invalidity. In the UK, while the unemployment rate has gone down, disability cases have risen (not to mention the numbers imprisoned). This points to extensive hidden unemployment. Looking at those who are claiming incapacity benefit for more than six months, the number has grown from 570,000 in 1981 to 2.13 million by 2003. In total, 2.7 million people of working age are receiving sickness-related benefits. This is some 7% of the UK's working age population and, obviously, puts the stated 2.9% unemployment rate in an utterly different light.

These figures dwarf the equivalent ones from Europe. In Germany, only 2.1% claim IB while it is 0.3% in France. Add IB to (standardised) unemployment figures, and the supposed superiority of the British economy to those of Germany and France simply disappears. Unemployment in "liberalised" Britain is about the same as in "regulated" Europe. While Thatcher's labour market reforms may have weakened workers' strength and increased their job insecurity (and so increased profits and inequality), they did not reduce unemployment. So much for nearly 30 years of neo-liberalism. And Blair has the check to lecture Europe on the subject!

author by Stephen Magillpublication date Fri Nov 04, 2005 05:39author email ola729 at hotmail dot comauthor address author phone 01484432838Report this post to the editors

Interested to see the comparative IB figs for Germany, France, etc. which confirm what I had suspected, ie, that they are much lower than UK figures (though I believe the figs for the Netherlands are similar, if not higher). I suspect this is because their equivalent of JSA is so much higher, thus reducing the incentive, indeed necessity, for people to claim IB.

A walk down any British High St, will confirm that there are millions of working age people who are obviously not in employment.

author by J Midgleypublication date Thu Dec 29, 2005 18:10author email p.s.s.ltd at btinternet dot comauthor address author phone 01304 621980Report this post to the editors

The principle lie used as the basis for the (forever to be) proposed Incapacity Benefit Reforms is that the numbers of people on this benefit have quadruppled since 1979 (or several similar statistics used to imply that people love living in poverty and feign illness to this end). This lie is so endemic it is taken as the starting point for the debate by politicians, the press and sundry commentators from whichever part of the political spectrum they choose to illuminate our lives. The truth of course is forever to be consigned to dark places:

In February 2005 the number of recipients of Incapacity Benefit was 1,444,800 and falling at a rate around 40,000 per annum as it has done for the last decade. (Source DWP website).

The basis for the lie is as follows:

For the starting figure (Blunkett used 790,00 in 1979) the government uses the number of Invalidity Benefit claimants. For the comparison figure the government uses the numbers of people on Incapacity Benefit, Severe Disablement Allowance and Income Support by reason of Disability (2.7 million or so). In doing this the government are missing out 1.5 million Social Security claimants from 1979 who were unable to work through disability but did not have the NI contributions record needed to claim Invalidity Benefit. As a group they went unrecognised until the advent of Jobseekers Allowance when absolutely everyone had to demonstrate they were looking for work and had to claim JSA rather than IS unless they were disabled or lone parents or a few other minor groups.

In short: The increase in the number of IB claimants is due to a re-definition of the term "Incapacity Benefit" to include other groups not on Incapacity Benefit at all.

The purpose of this re-defintion is to attack the recipients of Incapacity Benefit and use the lie as an excuse to reduce the benefit further (it has been cut several times by this and the previous government). In particular it is Blair's ambition to means test it further.

JM

author by Anonpublication date Fri May 26, 2006 22:52author address author phone Report this post to the editors

You lifted the last part of your article from Matthew Lynn's article for Bloomberg News (linked). It makes your article sound disjointed too.

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