Tag Archives: welfare benefits

A philosophy of cynicism and cruelty

As a country, we have a very long and complex history when it comes to how we treat our most vulnerable. In recent years, it is abundantly clear that our country has failed to treat these people with dignity. From the Elizabethan Poor Laws to the introduction of austerity, we have a pattern of taking one step forward, followed by two steps back — and this Labour government is no exception to the rule.

We have a government that solely values its citizens based on how much income tax they pay, disregarding the many other ways they may contribute to our society — whether through intellectual, creative work, or contributions to their communities. To believe that the value of a person is derived from economic output alone is simply cynical and callous, although the Treasury does not share that worldview.

Ideology above basic economic sense

Upon hearing the recent announcements regarding the incoming welfare cuts, I took it upon myself to research the harms that will be inflicted, beyond increased food insecurity and squalor. On the surface, one might think that if welfare spending is likely to spiral out of control, it would make sense to make cuts to rein it in. However, once you consider the harms of doing so, you will arrive at a very different conclusion.

Rachel Reeves and Liz Kendall would have you believe that welfare cuts will encourage people to enter the workforce and that our benefits are too ‘generous’ — even though the Resolution Foundation disproved this. Making our most vulnerable poorer will only make them sicker, not more inclined towards employment.

However, it doesn’t stop there — as we all know, bad policy leads to a domino effect of even worse outcomes. Whether you agree that current welfare spending is unsustainable or not, you cannot fail to recognize that making people poorer and sicker often comes with self-compounding economic harms:

• Cutting benefits will inevitably lead to deeper poverty, increased NHS spending, and a reduction in employment figures — you won’t make people find a job by making them sicker.
• Many claimants rely upon these benefits to afford care, whether that be social care or even from the private healthcare sector due to waiting lists. However, cuts to benefits such as PIP would distort both supply and demand in health and social care, due to reduced affordability, increased costs for local authorities, and unmet care needs — leading to inflationary pressure.
• Health and social care won’t be the only sectors affected — it will reduce demand in retail and local business, as lower-income households tend to spend most of their income on essentials. Additionally, this could risk cost-push inflation.
• We will see increased reliance on credit, as claimants will be left out of pocket by these cuts, leading to rising interest rates — a contributing factor to inflationary pressure.

Benefits such as Universal Credit and Personal Independence Payment have a stimulus effect, because recipients have a high marginal propensity to consume, which leads to higher spending in local economies, a fiscal multiplier effect, and increased employment and productivity. Cancelling that effect with cuts will affect everyone.