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DWP headquarters, Caxton House, London. Photo by Paul Billanie for Welfare Weekly.

Universal Credit ‘The Most Significant Welfare Reform Since 1948’, Say MPs

Work and Pensions Committee give their support for in-work conditionality and sanctions under Universal Credit, but Labour say flagship reform faces ‘significant challenges’.


It’s disappointing and very worrying that a published report from the Work and Pensions Committee says: “The employment support service for in-work claimants of Universal Credit (UC) holds the potential to be the most significant welfare reform since 1948”.

Frank Field MP, Chair of the Committee, said: “The in-work service promises progress in finally breaking the cycle of people getting stuck in low pay, low prospects employment.

“We congratulate the Government for developing this innovation. As far as we can tell, nothing like this has been tried anywhere else in the world.

“This is a very different kind of welfare, which will require developing a new kind of public servant.”

This imprudent comment from Mr Field, a Labour MP who some believe behaves more like a Tory, implies that individuals need financial punishments in order to find work with better prospects and higher pay.

Yet there are profoundly conflicting differences in the interests of employers and employees. The former are generally strongly motivated to purposely keep wages as low as possible so they can generate profit and pay dividends to shareholders and the latter need their pay and working conditions to be such that they have a reasonable standard of living.

It’s not as if the Conservatives have ever valued legitimate collective wage bargaining. In fact their legislative track record consistently demonstrates that they hate it, prioritising the authority of the state above all else.

Workplace disagreements about wages and conditions are now typically resolved neither by collective bargaining nor litigation but are left to management prerogative. This is because Conservative aspirations are clear. Much of the government’s discussion of legislation is preceded with consideration of the value and benefit for business and the labour market. They want cheap labour and low-cost workers, unable to withdraw their labour, unprotected by either trade unions or employment rights and threatened with destitution via benefit sanction cuts if they refuse to accept low paid, low standard work.

Similarly, desperation and the “deterrent” effect of the 1834 Poor Law amendment served to drive down wages.

In the Conservative’s view, trade unions distort the free labour market which runs counter to New Right and neoliberal dogma. Since 2010, the decline in UK wage levels has been among the very worst declines in Europe. The fall in earnings under the Tory-led Coalition is the biggest in any parliament since 1880, according to analysis by the House of Commons Library, and at a time when the cost of living has spiraled upwards.

It’s worth considering that in-work conditionality and sanctions may have unintended consequences for employers, too. If employees are coerced by the State to find better paid and more secure work, and employers cannot increase hours and accommodate in-work progression, who will fill those posts?

Financial penalties aimed at employees will also negatively impact on the performance and reliability of the workforce, because when people struggle to meet their basic physical needs, their cognitive and practical focus shifts to survival, and that doesn’t accommodate the meeting of higher level psychosocial needs and obligations, such as those of the workplace. It was because of the recognition of this, and the conventional wisdom captured in the work of social psychologists such as Abraham Maslow that provided the reasoning behind the policy of in-work benefits and provision in the first place.

In-work conditionality reinforces a lie and locates blame within individuals for structural problems – political, economic and social – created by those who hold power. Despite being a party that claims to support “hard-working families,” the Conservatives have nonetheless made several attempts to undermine the income security of a signifant proportion of that group of citizens recently.

Their proposed tax credit cuts, designed to creep through parliament in the form of secondary legislation, which tends to exempt it from meaningful debate and amendment in the Commons, was halted only because the House of Lords have been paying attention to the game.

Last month I wrote about the Department for Work and Pensions running a Trial that is about “testing whether conditionality and the use of financial sanctions are effective for people that need to claim benefits in low paid work.” 

The Department for Work and Pensions submitted a document about the Randomised Control Trial (RCT) they are currently conducting regarding in-work “progression.” The submission was made to the Work and Pensions Committee in January, as the Committee have conducted an inquiry into in-work conditionality. The document specifies that: This document is for internal use only and should not be shared with external partners or claimants.

The document focuses on methods of enforcing the “cultural and behavioural change” of people claiming both in-work and out-of-work social security, and evaluation of the Trial will be the responsibility of the Labour Market Trials Unit. (LMTU). Evaluation will “measure the impact of the Trial’s 3 group approaches, but understand more about claimant attitudes to progression over time and how the Trial has influenced behaviour changes.”

Worryingly, claimant participation in the Trial is mandatory. There is clearly no appropriate procedure to obtain and record clearly informed consent from research participants. Furthermore, the Trial is founded on a coercive psychopolitical approach to labour market constraints, and is clearly expressed as a psychological intervention, explicitly aimed at “behavioural change” and this raises some very serious concerns about research ethics and codes of conduct, which I’ve discussed elsewhere. It’s also very worrying that this intervention is to be delivered by non-qualified work coaches.

Owen Smith MP, Shadow Work and Pensions Secretary, commenting on the Work and Pensions Select Committee’s report  into ‘in-work progression’ in Universal Credit, said:

“This report shows there are significant challenges facing the new Universal Credit system, not least how to ensure work pays and people are incentivised in to jobs.  As a result, it is deeply worrying that at the early part of the rollout, huge Tory cuts to work allowances will undermine this aim, as 2.5 million working families will left over £2,100 a year worse off.

“If Universal Credit is to be returned to its original intentions of supporting and encouraging people in to work then Stephen Crabb needs to change his mind and reverse the Tory cuts to working families urgently.

“It’s also problematic that the committee found there is insufficient information available after a year of piloting in-work conditionality, especially given the complete mess that has been made of the existing sanctions regime.

“The DWP should move quickly to make available as much information as possible, to ensure the roll out of Universal Credit is properly scrutinised.”

The Work and Pensions Committee recommendations in the report are:

  • for the reform to work, it must help confront the structural or personal barriers in-work claimants face to taking on more work, such as a lack of access to childcare and limited opportunities to take on extra hours or new jobs
  • the question of applying proposed sanctions is complex: employed people self-evidently do not lack the motivation to work.  The use of financial sanctions for in-work claimants must be applied very differently to those for out-of-work claimants
  • a successful in-work service will also require partnership between JCP and employers to a degree not seen before.

Last updated at 23:40 on 13th May 2016.


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