The public believes that 27 per cent of the benefits budget is lost to fraud when the real figure is under 1 per cent.
“Entitlement” became the dirtiest word in right-wing circles in 2012. The Tea Party dialectic about “makers” versus “takers” has been imported wholesale by the Tories in order to sell their idea that the welfare state is bad for the poor and unaffordable for the rest of us: presumably the “makers”.
Iain Duncan Smith showed his Christmas spirit by launching a fierce attack on tax credits which was unencumbered by a single accurate fact. His claims about “dependency, wasted taxpayers’ money and fraud” were completely debunked as bogus and even sinister, as he also made the baseless claim that “fraudsters from around the world targeted this benefit for personal gain.”
But the demolition of IDS’s venal and cynical attack was carried out by Channel 4 News. His faithful stenographers in the Sun and the Mail repeated the line that the poor are bleeding us dry, and the foreign poor are simply vampires.
Meanwhile, the same London hacks noticed that the top ten per cent of tax-payers were losing their child benefit and an even smaller portion of wealthy people were facing a cut in the tax relief that subsidises their private pension fund. Guess which set of the population received sympathetic coverage?
IDS made his charges secure in the knowledge that no fact-check could counter the tsunami of misinformation about welfare benefits or the working poor. Since 2010, government press offices have fed the Tory press horror stories about unsympathetic claimants, especially those with lots of kids, foreign names and huge televisions.
What they are not talking about is two matters. First, that the bulk of the welfare bill goes to pensioners, and they are electorally untouchable. Second, that most people who receive tax credits are not ‘skivers’ but are striving in crappy jobs with lousy pay. They are paid the minimum wage by employers who are, in effect, subsidised by the state and facilitated to undercut any competing business.
Similarly, the ‘leeches’ who depend upon housing benefit are not impoverished tenants, but private landlords who can manipulate the rental ‘value’ of their flats and HMOs to ensure maximum returns from a government which believes that rent controls are bad for ‘competition’.
The Tories can do this because the bulk of the public are as startlingly ignorant about the facts as IDS. A recent poll found that most who support welfare ‘reform’ were the least informed, thinking such loose thoughts as that 27 per cent of the welfare budget is claimed fraudulently (the actual figure is 0.7 per cent).
The irony is that the immiseration of the working poor is adding to the national deficit, according to those radicals at the International Monetary Fund. The IMF argues that “the whole – yes the whole – of the deterioration of the British current account deficit between the early 1970s and 2007 could be explained by the rise in British inequality.”*
As more of the share of national income went to profits while real wages were squeezed, living standards were artificially maintained by cheap imports and higher personal debt until the credit crunch interrupted the fantasy.
Low wages are bad for the economy and add to the deficit, and guess which UK region has the lowest wages of all? The average full-time private sector employee in Northern Ireland receives 83 per cent of the UK average, and that average has been stagnating for years. A recent TUC report finds, like the IMF, that profits which have enriched the top ‘earners’ have come at the expense of the middle classes and the working poor: “If wages had kept pace with growth in overall UK output between 1980 and 2010, median annual earnings for full-time workers would now be around £7,000 higher than they actually are.”
On 8 January, the House of Commons gave IDS his wish and the value of tax credits will increase at 1 per cent, while the cost of living increases exponentially. He may feel entitled to feel smug, but many thousands of working families are entitled to quite different emotions.