A response to the 2023 Spring budget

What is the Budget's purpose?

If that question was asked of either frontbench, after some equivocating the main answer given would be – to create economic growth.

The urgent questions are what growth do we want, what is its environmental impact and who will benefit from it.  During a time of rising destitution in the UK and an environmental crisis we need the huge spending power of the state to focus on these issues. Today’s budget followed the familiar consensus of wanting growth – any growth.

For example, the most expensive single item announced today, costing around £9bn a year is 100% tax relief on corporate investments. The hope is that businesses will invest in IT, plant and machinery and then grow. This may work although a 125% tax relief (effectively a subsidy) did not do a great deal. The relief however is not contingent on those investments being sustainable or the jobs created offering decent pay and conditions. The £9Bn is being spent hoping for growth – any growth.

Changes to the benefit system

There are big changes to benefits underway, some very welcome and some extremely worrying.

The most immediate change is that people claiming Universal Credit who are working and need help to afford childcare, will get a more realistic amount to cover the costs as well as have the money paid upfront. Previously the Department of Work and Pensions who administer Universal Credit had required claimants to submit receipts and wait for at least a month to be reimbursed. For families on low incomes that often meant getting into debt to afford the first month’s childcare. This change costs relatively little but will make a huge difference.

The Chancellor announced the introduction of a program to support disabled people prepare for and find work. The details are not yet known but the most important aspect is that it will be voluntary. If people don’t find it helpful, they don’t have to take part. Previous schemes have been mandatory, and we have seen people forced to do things they found useless and even damaging or have their benefits stopped. A scheme that offers people more choices and trusts them to make decisions for themselves is a step in the direction of a benefit systems that treats people with dignity.

Universal Credit was introduced 10 years ago and is still 2 years away from being fully rolled out but core aspects of how affects disabled people are to be changed. The Work Capability Assessment is used to determine both how much benefit a person can receive and the sort of tasks they can be directed to do or be punished with a sanction that stops their benefits.

The Assessment was always flawed – in Glasgow the assessment centre gained the nick-name “Lourdes” as no matter how sick you went in you were miraculously found to be well and fit for work. The WCA has been the subject of numerous scandals and injustices, so it is good it is going. However, there is no word as to what replaces it. There is both hope and trepidation as the next steps are unveiled. The key will be if disabled people are genuinely included in the next steps of the design process or if the pathway is already set.

Benefit Sanctions

Benefit sanctions are punishments given to people claiming benefits who are judged not to be complying with the instructions given to them by the jobcentre. In reality over 95% are given out for people missing or being late for jobcentre appointment. The fines usually remove a person’s standard living allowance for a month but the duration can vary from 2 weeks to 6 months.

Since the pandemic the rate of sanctions on Universal Credit has doubled. It is therefore surprising that the chancellor announced, “So sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer”. He also expanded the group of low-paid workers who are exposed to sanctions regimes

It is certain that sanctions drive foodbank, use cause hardship and harm, especially to people with sickness or disability. The justification given by government for them is that they help to move people into work. The DWP has never produced any evidence that the severe regime in the UK achieves this aim. Other research suggest the exact opposite.

The DWP does have internal research that it initially promised to publish on the effectiveness of sanctions – but has spent over a year resisting Freedom of Information Request asking for its publication. The information commissioner has ordered the release of the research and if as is expected this report agrees with the consensus that sanctions are ineffective the policy represents hardship to some of the poorest in our society, with no tangible purpose.

The key question is why does the Government believe that jobseekers, who are getting jobs at record rates, need to face large threats in order to seek work? Why does government feel the poorest need to be given instructions backed by threats rather than be trusted to take advice and look for work in their own way? The expansion of the sanctions regime says a lot about the values an beliefs of those who design the regime, and very little about those who are forced to live under it.

Paul Morrison, Policy Advisor, Joint Public Issues Team