Welfare Green Paper

Making profit out of poverty

THE GOVERNMENT'S Green Paper - Work, Better Off; Next Steps to Full Employment - rolls back many rights and benefits that have formed the basis of Britain's welfare state for 65 years. For the long-term unemployed, or 'complicated cases' as Labour ministers label them, these counter-reforms will place their claims in the hands of unaccountable private companies.

Adam Dudley

People who claim Incapacity Benefit or Income Support will find themselves on mandatory, privately run, back-to-work schemes and by 2010 lone parents will be forced into work when their children reach seven years of age.

Work and Pensions Secretary Peter Hain's announcement that New Labour's welfare 'reforms' would include the use of private-sector organisations will surprise few people.

Piecemeal disintegration of the welfare system and the running down of key public services for privatisation have been the driving force behind New Labour's so-called "social streamlining programmes".

Since 1997 New Labour has implemented many privatisations - now the benefits system is for the treatment.

With 15,000 Jobcentre staff axed over the last two years, over 500 jobcentres and benefit offices closed and the threat of compulsory redundancies of Jobcentre staff looming, the government clearly plans to use the private sector to plug the gaps they created themselves. This will then be used to justify more cuts and more redundancies.

In May the Welfare Reform Bill was passed, giving the Secretary of State new powers to sell off key services to the private and voluntary sector. So the Jobcentreplus, Labour's one-stop-shop, will handle those 'closest to work' whilst the most vulnerable and 'complicated' will soon be in the hands of profit-driven organisations.

Payments to these organisations will be target-based. The government aims to force 300,000 lone parents back into work along with a million over-50s and a million currently claiming Incapacity Benefit.

So these agencies will have major fiscal incentives to force some of society's most vulnerable people into unstable, low-paid work or simply cancel their benefits.

Last December's Welfare Reform Executive Summary does not try to hide the motive for these attacks. On incentives for private business, it reads: "The scale of the potential market is large," and "this will be an annual multi-billion market. Such scale would attract commitment from a wide range of private service providers".

Whoever bids for the service, responsibilities will include cancelling people's benefits if they fail to follow the very strict guidelines which the government has outlined. Claimants will be required to attend regular interviews to discuss their progress.

They will be appointed a private sector 'adviser', who will assist claimants to draw up an action plan to help them back into work. If a claimant fails to attend an interview, their 'adviser' decides whether they had good cause for their failure. Their benefit could be cut as a result.

These advisers' decisions to cut claimants' benefits will, just like current DWP policy, be subject to revision and appeal. However, the same company that decided to cut the benefits will apparently carry out all appeals and revisions!

These measures will fundamentally alter the way the welfare system serves the unemployed. Big business will have free rein to turn poverty and alienation into profitable business and the unemployed will be forced into casual work on low pay.

The Green Paper is sketchy on how and when these new measures will become reality and the government will try to play down this attack's repercussions.

But, for millions of unemployed and disabled workers of all ages, it spells the beginning of a process which will end with the disintegration of the benefits system and the removal of the safety nets that have long protected those most at risk from exploitation. Private hands will slowly throttle claimants. But at least the figures will look better!

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In The Socialist 9 August 2007:

Save our NHS: Stop fat cat robbery