Social Welfare Bill broadens cuts agenda

JM Thorn

7 June 2010

The Social Welfare Bill 2010, published last month, represents a major attack on the social security component of public spending.  It particularly targets benefits paid to single parents and the unemployed. 

Amongst the cuts is that to the One-Parent Family Payment, or Lone Parent’s Allowance. The One-Parent Family Payment a single parent who is not working. To those single parents who receive the payment, it is worth €196 a week. For each additional child there is a further €29.80.  There are an estimated 189,240 one-parent families in the state, and at the end of 2009 there were some 90,500 lone parents in receipt of the One-Parent Family Payment at an estimated cost of €1bn.  Currently it is paid until the child reaches 18, or 22 if the child is in full-time education.  If the parent has more than one child it is paid until the youngest child reaches 18 or 22 if still in education.  Under the proposals contained in the Bill the age for qualifying children will start to be lowered from next April, going down to 13 over the next number of years.  When the payment stops, parents will be put on to Jobseekers' Allowance which, at its maximum, is at the same level as the One-Parent Family Payment of €196 but those lone parents with more than one child will lose out. Also, Jobseekers' Allowance is means- tested and only given to those who are available for and seeking work.

The Government claims that it wants to help people find work.  However, this is rather threadbare when we consider the poor level of support, particularly the lack of affordable childcare, for working parents in Ireland. This is a massive barrier for single parents returning to employment or full time education.  Without appropriate childcare it is more or less impossible for single parents with young children to take on a full-time job or course. While a ‘free’ childcare scheme was announced last year’s Budget, this was largely tokenistic.  It did not represent an advance for the provision of childcare, and it some cases has made it worse.   Recent research that looked at seven European countries concluded that Ireland was the worst for single-parent households with the highest levels of consistent poverty.  Now the government is proposing to reduce even further the incomes of the poorest families in the state. 

The financial attack has also been accompanied by an ideological attack that seeks to demonise people on benefits.  Lone parents are particularly soft targets.  There is an underlying insinuation that lone parents are feckless spongers living it up at the expense of the taxpayer. There is also a misogynist tone to this that infers single women are having children simply to milk the welfare system.  All of this ignores the fact that 80 per cent of one-parent families are already engaged in education, training or work, and of course that rearing children is work in itself.  However, we can expect the Government to play upon any prejudice in its drive to cut public spending and reduce the living standards of the working class. 

The other main element of the Welfare Bill are the proposals to further reduce unemployment benefits.  Jobseeker's Allowance would be cut by a about a quarter to those who turn down training course, while those who refuse job offers would have their payment disqualified.  Also, people convicted under Social Welfare legislation would have their names, addresses and fines published.  While this too is about cost cutting, it is also part of the Government and employers wider agenda of wage reduction.   Benefits are being reduced and sanctions imposed in order to force people, particularly young workers, into low wage jobs.  If those on benefits can’t refuse a job that is deemed “suitable” then employers can offer any terms they please.  This will create a layer of workers that will be subject to the worse pay and conditions, and put downward pressure on the living standards of the working class as a whole.   The reductions in unemployment benefits are also linked to the changes in lone parent benefits, as those now claiming for children are to be progressively transferred unto Jobseekers and then into employment.   Coercion is an essential element in this process of creating a pool of low wage labour. 

It is not just the young and single parents who are under attack.  The Government has refused to rule out cutting or means testing the old age pension.  This is particularly hash as more than half of older people are dependent on the sate pension as their sole source of income.  That the Government are treading more carefully when it comes to the state pension is certainly down to the furious response from older people that similar proposals a few years ago provoked.   The display of grey power on the streets had the Government in retreat.  Unfortunately, the example of the pensioners was not one followed by the trade union leadership, whose accommodating approach has only encouraged bolder attacks upon their members. 

Another assault on the social wage that has passed almost without comment was the Government’s announcement that VHI, the state backed health insurer, is to be privatised.  This was accompanied by talk of  “risk equalisation” and “community rating” and claims that competition will bring down costs.  However, the reality is that the greater involvement of private finance, as it has always done within the health service, will increase user costs.   Patients will therefore suffer the double hit of less money going into the health service, and having to pay more for a poor service that is deteriorating even further. 

One of the strongest responses to the Social Welfare Bill, in rhetorical terms at least, came from SIPTU general president, Jack O'Connor.  He said that the proposals were “heartless” and “reprehensible beyond belief”, and compared them to the 19th Century Poor Law regime.   For him they were another example of the Government refusing to balance “the burden of adjustment in society” and pandering to “the whims of those at the top of the banking system and the international money markets."  However, he refuses to acknowledge the responsibility of the trade union leadership in bringing such a situation about.  For throughout the economic crisis it has sought to dampen down and dissipate any opposition, accepting that workers had to make sacrifices for the “good” of the country.  In this it has actually facilitated the financial bailout and the looting of public services to pay for it.  The most recent example of this is the Croke Park Agreement, under which workers are being asked to give up their terms and conditions in the hope of maintaining current pay rates for three years.  However, that can only be achieved by bearing down more harshly on the non-pay elements of public spending such as social security.  Jack O’Connor may rage against the Social Welfare Bill, but it is a direct result of the series of the agreements he and other trade union leaders have made with the Government and employers.   The more the trade union leadership have accommodated the harder their rhetoric has become.  However, the increasing fiery speeches of Jack O’Connor and Co cannot cover the defeats they have delivered for the working class. 

Workers cannot assume that sacrifices are at an end, or that the worst of the crisis is over.  The Government has already signalled its intention to cut €3bn in spending in the next budget and similar amounts in following years.   With the costs of the financial bailout growing the scale of these cuts is likely to be even greater.  If this is to be avoided trade unions need to be restored as independent organisations that can effectively defend their members and the broader working class.   While the rejection of the Croke Park Agreement by public sector workers would be an advance for this process, only with the overthrown of the current leadership could it be achieved fully.   This is the urgent task facing social and trace union activists.