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Jonathan Rutherford
© Jonathan Rutherford 2008
We are at the end of an era that began with the Big Bang exactly 22 years ago on Monday October 27. The deregulation of finance in Britain set in train two decades of profiteering to the point of destruction. For the moment things are quiet, but hard times lie ahead. The Conservatives created this era. The New Labour project embraced it. Infatuated with the world of money and power, it traded its morality for a nihilistic culture of capitalism and a naive faith in the American business model. Market choice was its shibboleth. Now it is crashing to earth and with it tumbles the ideology of New Labour.
But it still has life left in it. The anniversary of the Big Bang is being marked by the introduction of New Labour’s welfare reform. The new Employment and Support Allowance will replace Incapacity Benefit. Claimants will have to attend work-focused interviews and draw up an action plan for a return to employment. Failure to participate will result in cuts in benefits. The Personal Capability Assessment, already a stringent test which decides who can and cannot receive benefit, will be replaced by the Work Capability Assessment. It will be much harder to pass. Those suffering mental illness already have to endure an insensitive system. They will now have an even tougher time achieving the necessary number of score points.
Wednesday 22 October concluded the consultation period for James Purnell’s next phase of welfare reform – the green paper, No One Written Off. Purnell, the minister for work and pensions, is ambitious. There are 2.6 million people on incapacity benefit. He wants one million of them and another 300,000 single parents back into work. He is wasting no time and is pressing ahead with the white paper. But his welfare reform is not viable.
There are currently only 608,000 job vacancies in the economy and unemployment is rising. The Jobseeker's Allowance count rose last month to 939,900. By Christmas it could be two million. What’s more, the business model of welfare reform set out in the Freud Report has been completely discredited by the collapse of the banks. It is based on the belief that the private sector is the only body capable of running the welfare system: only the private sector can shoulder the financial risks; only the private sector will bring in the banks, which will be able to fund the ‘extremely large investments implied here’. It was wrong before the credit crunch, but now few need convincing of the fact. Despite this, its author, the banker David Freud, is employed by the DWP to oversee its implementation.
Purnell's welfare reform proposal, with its threat of workfare – effectively forced labour, threatens a welfare crunch. The DWP's own research shows that punitive style workfare isn't an effective way of reducing unemployment. It creates a revolving door of claimants who are forced into inappropriate jobs without adequate support. They drop out and end up back on welfare, or eventually fall into destitution. If the proposals in the green paper become law they will mark the destruction of the principle that those in need should be helped by the wider community.
But growing numbers of people are now being confronted by the threat of redundancy. They are discovering that the collective good of social insurance is in dangerously short supply. Public disquiet at New Labour's welfare reform is growing. The Public and Commercial Services Union has taken the lead and has launched a campaign to stop Purnell's reforms. Welfare reform is not just about politics, it is about our collective morality and the kind of society we want to live in. Mark Serwotka, general secretary of the PCS, said his opposition to the green paper's proposals are simple: they lack humanity. He does not want his children to grow up and face such a punitive system. What kind of society do we want after the era of perfidy?
Part of the Comment is free Soundings debate, first appeared 24 October.
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