Viewpoint: Welfare reforms

Paul Duhaney

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Dr Stephanie Petrie is an Honorary Research Fellow in the University of Liverpool’s School of Law and Social Justice

Financial speculation in the USA housing market and subsequent collapse in 2007-8 caused a global credit crunch and led to austerity policies in many countries including the UK and there is evidence of continuing incompetence and fraud in financial institutions.

Austerity

“Nevertheless coalition policies are firmly rooted in austerity as the only way to free the private sector to generate employment and wealth.

“The state, the coalition argues, has been too generous in support of its citizens, as many are workshy and live off handouts. Yet government statistics show that tax evasion costs the country an estimated £14 billion whilst welfare benefit error and fraud £3.4 billion or 2.1% of total benefit expenditure.

”From the 1970s onwards successive governments from all political parties have abandoned the view that the state should, or could, intervene in the economy to maintain full employment”

“Furthermore austerity policies have not delivered the robust economy promised. GDP is stagnant; the economy is likely to enter a triple dip recession; the AAA credit rating has been lost for the first time since the 1970s and government indebtedness likely to increase until 2017.

“So who is bearing the costs of austerity? Unemployment stands at 2.52 million nationally with the North and Midlands having the highest rates. Unemployment for 16-24 year olds is now 21.2% and it’s been estimated that within 2 years almost 7m of the nation’s 13m youngsters will be living in homes with income judged to be less than the minimum necessary for a decent standard of living.

Inequality

“Distribution of wealth is highly unequal with the top 10% owning 100 times more than the bottom 10% and 90% of families will be worse off in 2015 than 2010. Budget initiatives such as childcare tax relief and Help to Buy schemes and proposed ‘bedroom tax’ will exacerbate not relieve this situation.

“We are living through the dismemberment of the Welfare State. From the 1970s onwards successive governments from all political parties have abandoned the view that the state should, or could, intervene in the economy to maintain full employment.

“Without a significant shift in economic policy away from austerity towards boosting demand the costs to our society, in terms of the evils of Want, Disease, Ignorance, Squalor and Idleness that the Welfare State was established to eradicate, will burden us for many decades to come.”

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