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Tackling Inequality in the UK aaaaaa 06/03/19 Tackling Inequality in the UK Learning to understand various ways the government and other organisations have attempted to tackle inequality in the UK in recent years Success Describe a variety of government benefits Describe a variety of other measures to tackle inequality Analyse the success of these measures in tackling inequality Today Take detailed notes on government benefits Watch a series of short clips about the impact of benefits on UK citizens

Tackling Inequality and Poverty: UK Government There is a great deal of misconception around what the government actually does to tackle inequality and poverty today. Times have changed greatly since the Welfare State was introduced in the 1940s: the population is far higher; types of jobs and employment have changed dramatically and the economic dynamics of the country have changed on multiple occasions.

Tackling Inequality and Poverty: UK Government The UK government provides it’s citizens with a variety of benefits (often monetary) to ensure that the most vulnerable have a basic standard of living. These are most commonly thought of as being for “job-seekers” or people who do not work but, in fact, the benefits system is far more diverse and complex than it seems. Various UK governments have also introduced other policies and programmes to try and help people who may face inequality in other ways.

Tackling Inequality and Poverty: UK Government The Department for Work and Pensions is the biggest spending department in the UK Government. In the financial year 2016-2017, the UK government spent £264 billion on welfare, which made up 34% of all government spending

Tackling Inequality and Poverty: UK Government When asked how they thought that money was spent the British public suggested:

Tackling Inequality and Poverty: UK Government The actual split looks more like this: Total pension spending has increased by 9% since the financial year ending 2013. This isn’t surprising as life expectancy has been steadily increasing, so State Pensions are being claimed for longer.

Tackling Inequality and Poverty: UK Government Over £46 billion goes on family benefits, income support and tax credits. This includes benefits such as Child Benefit and support for people on low income. Around £2.2 billion goes to the unemployed. For unemployed people claiming Jobseeker’s Allowance or Universal Credit, there were 804,100 people claiming these benefits in September 2017. This number has increased by 3.3% compared with a year earlier.

Tackling Inequality and Poverty: UK Government The Conservative government introduced a cap on government welfare spending in 2014, covering some but not all types of payment. The basic state pension and some unemployment benefits were excluded from the cap. This cap on spending has had a massive impact on some groups of people in society and the Conservative government has been widely criticised by many charities for “punishing the poor”.

Total spent on “benefits” in 2015-16: £217 billion Highest spend is on pensions The amount spent on “the dole” is actual very small: just £2.4 billion of the total benefits spend in 2015-16.

Universal Credit: Purpose Universal Credit is the Conservative government’s flagship benefit scheme which will eventually replace all working age benefits such as Job Seeker’s Allowance and Housing Benefit. The purpose of Universal Credit is to help claimants and their families to become more independent and self-reliant. People on Universal Credit are paid on a monthly basis to help them become more used to managing their income as they would be expected to in employment. Those receiving the benefits would also be at risk of sanctions if they failed to comply with requirements such as spending 30 hours a week looking for employment if unemployed. These two aspects are expected to teach people to be less dependent on the state and take more responsibility for themselves. Universal Credit and Breadline Britain

Universal Credit: Effectiveness/Success A government report from 2015 claimed that the policy was a success in encouraging a culture shift and that people on universal credit were more likely to believe the benefit system encouraged them into work and were more likely to take a job. The same report also found that those who went onto universal credit were more likely to be in work, spend more time in work and stay in work than previous Job Seeker’s Allowance claimants. At the end of 2018 the unemployment rate was the lowest since the early 70s at 4% Analysis: It is clear that since the introduction of Universal Credit the number of people in work has risen. This means that the BASIC aim of the policy – to encourage citizens into work – has been to a large extent achieved. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/405921/uc-at-work-spring-2015.pdf https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment/timeseries/mgsx/lms

Discuss any potential issues with this system Starter Universal credit was rolled out under the Conservative government. Discuss in your groups the strategy behind this flagship benefit scheme? Discuss any potential issues with this system

Universal Credit: Criticisms The reality is that despite the best of intentions, the roll out of Universal Credit has been heavily criticised by even members of the ruling Conservative Party. There have been many technical issues related to the roll out resulting in a large proportion of claimants receiving no money whatsoever for up to 3 months. The issue of the negative impact on people of the benefit has been raised many times in Parliament, including the link between the introduction of Universal Credit and the rise in the use of charitable food banks and those building up rent arrears. In 2018 the government minister responsible for benefits Ester Mcvey announced there would be no more delays to roll out the programme in further areas of the country as well as increases in the generosity of the payments to make up for lost payments. Universal Credit and Breadline Britain

Universal Credit: Criticisms The Trussell Trust reports that it gave out 1.3 million 3 day food packages to people in need in 2017/18 compared to 300,000 in 2012/13. The trust says that 40% of the people seeking support from the food bank do so due to benefit changes or delays. The use of Trussell Trust foodbanks increased by 50% in areas where Universal Credit has been rolled out. This compares to 13% in non-universal credit areas. Sky News found out that people on universal credit living in social housing are 73% more likely to be behind in their rent payments than people not yet on Universal Credit – just 29% of benefits claimants were behind on rent in those areas. BBC Newsnight - Is Universal Credit Working?

Personal Independence Payment: Purpose Personal Independence Payment (PIP) is another major reform of the benefits system undertaken by the Conservative Government. It is a payment given to people with long-term illnesses or disabilities. PIP is the national replacement for Disability Living Allowance. PIP payments are based on an assessment of individual need whereas DLA relied on a list of conditions agreed to affect the ability to work. In order to claim PIP most people have been asked to attend a one-to-one consultation with an independent health professional.

Personal Independence Payment: Effectiveness/Success? The basis of the system has been highlighted as having the best of intentions – payments were to be based on a real assessment of capability and needs. Individuals who have more severe illnesses and disabilities would be taken care of by the state. However, the actual system put in place has caused such major controversy the a government minister RESIGNED over it. Task- Watch the first 10 minutes of the documentary on PIP and take notes on: How the system works What some of the criticisms may be https://www.youtube.com/watch?v=vnItQ9-atjw https://www.bbc.co.uk/news/uk-42862904

Personal Independence Payment: Criticisms The criticisms of the PIP system are widespread: The use of private firms to assess for PIP has been highly criticised; many claimants have highlighted the undue stress caused by the one-to-one assessments There have been several high profile cases of misdiagnosis which have lead to claimants taking the government to a tribunal to get the money they deserve. In February 2014 it was claimed that between August 2010 and June 2013 158,300 people were wrongly assessed as being “fit for work”. Then Work and Pensions Secretary Iain Duncan Smith resigned from his position in March 2016 over further proposed changes to PIP which would have seen further cuts made to the payment.

Personal Independence Payment: Criticisms Read the following two articles and Iain Duncan Smith resignation letter on the Personal Independence Payment and add to your notes on the criticisms of the system and how it has affected some of the most vulnerable people in out society. https://www.bbc.co.uk/news/uk-politics-35861447 https://www.bbc.co.uk/news/uk-42862904 https://www.bbc.co.uk/news/uk-politics-35848891

Tackling Poverty: UK Government Successive UK Governments have also introduced several other policies to tackle economic and social inequalities which are not “benefits”. Similarly, these policies have had mixed success.

National Minimum Wage A government policy targeted to reduce social inequality is the National Minimum Wage introduced in April 1999 by the then Labour Government which continues today. Its aim is to remove the problem of ‘poverty pay’ where earnings from paid work do not adequately cover living expenses. In the years since its introduction, the National Minimum Wage has been considered largely successful, with the Political Studies Association calling it the “most successful British government policy of the past 30 years”.

NMW rates are reviewed yearly and in 2017 for example, it was set at £4.05 for those under 18 and £7.05 for those between 21 and 24. This has reduced social inequality particularly for families and mothers as it means that part time workers (usually low paid) are now paid a higher wage. The 2013 Low Pay Commission Report claimed that the NMW applies to over 1.3 million workers and it has reduced the gender inequality gap as women account for 59 percent of low paid jobs, which means the NMW has had a greater impact on raising women’s earnings in comparison to men. April 2018 April 2019

However, many employers do not comply with the NMW standard and are not punished for under paying their workers. Moreover, given the increasing costs of living in the UK, many people believe that the NMW does not go far enough in attempting to raise people out of “poverty pay”. The Living Wage Foundation – a UK prominent charity – suggest that, in order to afford basic necessities, an individual needs to earn £9.00 per hour minimum.

National Living Wage In 2016, a similar policy was introduced by the Conservative government: the National Living Wage. This wage standard is higher than the minimum wage. It aims to help people better sustain a good living standard. This can be seen as effective in reducing inequalities as it could potentially provide people in low paid jobs with an opportunity to save for the future, or enjoy a small amount of disposable income.

However, higher wages are only reflected by the price of goods and services, which businesses will alter to maintain profits, and so this means the NLW is less effective in reducing social inequalities as people still struggle to afford certain basic goods. This is particularly the case in recent years as inflation of prices of everyday products is rising faster than wages. Furthermore, the NLW does not apply to under 25s, a group which in recent years have become predominant in unemployment and poverty rates. Clearly this shows that by excluding under 25s, the NLW could result in further social inequalities for young people and so is ineffective. For example, young earners with families will earn significantly less than older workers, even for the same jobs. This means for young people, work won’t provide a root out of poverty and so clearly NLW doesn’t reduce social inequalities.

The Scottish Parliament As “benefits” remain a reserved power, the Scottish Government has put in place a variety of different policies and schemes in an attempt to tackle poverty in Scotland. The majority of Scottish Government policies relate to improving child poverty and inequality related to low income.

Aims of Scottish Government Works to improve health, housing, educational attainment, employability and access to services. Abolition of Prescription Fees Abolition of Tuition Fees Free School Meals for all P1-3 Combatting the Bedroom Tax https://www.theguardian.com/education/2018/feb/16/council-free-school-meals-year-holiday-hunger-north-lanarkshire http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-30671988

Abolition of Tuition Fees In Scotland, the SNP abolished university tuition fees for ALL in 2007. This can be seen as a success in reducing social inequality by opening up the chance for young people from deprived backgrounds to receive higher education. In theory, this makes social mobility more likely as people who would have previously been unable to take advantage of this opportunity due to financial constraints now have the chance to pursue higher education, which has been proven to lead to higher earnings in later life.

Abolition of Tuition Fees However, in reality free university places means more people are applying to higher education and so entry requirements get higher. As a result, children from deprived backgrounds find it harder to compete with richer children who benefit from tutoring and private schooling. Clearly this indicates that free university places are less effective in reducing social inequality because it increases the difficulty of actually achieving the results required to be granted a place to study which disadvantages those from poorer backgrounds. This can be seen in the relatively small increase in the number of young people from poorer areas attaining a degree from 3% to just 5% when compared to the much more significant 20% increase in the percentage of affluent young people who have achieved university degrees in recent years.

Free School Meals for all P1-3 In January 2015 the SNP introduced a policy which entitles all Scottish children from primary 1 to primary 3 to receive free school lunches. The Scottish Government have estimated that the policy will save families, on average, £330 per year. Young children will benefit from this as it is aimed to promote healthy eating as well ensure a substantial meal so that children can better focus and learn in school. This policy aims to reduce the inequality gap that currently exists due to the fact that pupils from affluent areas tend to perform better in school even from a young age as they are often better nourished and thus able to concentrate more in their lessons. http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-30671988 http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-30671988

Free School Meals for all P1-3 However, again there are limitations on the impact of this policy. Firstly, the policy excludes older children. Such as been the impact as pupils move into P4 that Glasgow City council has announced it will pay money from its own budget to extend free schools to the next year group up from next August. Furthermore, Scottish Labour have argued that, since the most deprived pupils were already entitled to free schools meals throughout their time in education, all the policy has achieved is a £330 saving per year for the most affluent families which will in fact further the inequality gap – not close it. http://www.bbc.co.uk/news/uk-scotland-scotland-politics-43141802