Facing austerity, Britain unveils welfare cuts
World | John F Burns and Alan Cowell, New York Times | Updated: November 12, 2010 19:47 IST
London: A day after central London was shaken by violent protests against government-decreed increases in college tuition, Prime Minister David Cameron's administration braved a potential for further popular unrest on Thursday when it unveiled details of the biggest shake-up in Britain's sprawling welfare system since the years immediately after World War II.
The new measures were described by the government as a step toward mending what it called the country's "broken society." They include an array of changes aimed at eliminating waste and inefficiency in a cradle-to-grave system of welfare benefits for families, the unemployed, the sick and the disabled that has been one of modern Britain's proudest hallmarks, as well as one of its greatest financial burdens.
The measures include tough and politically contentious penalties aimed at what government ministers have described as the "work-shy" and "scroungers" among Britain's five million long-term unemployed.
Borrowing partly from American welfare-to-work programs adopted in the 30 years since President Ronald Reagan made overhauling welfare part of his drive for the White House, the Cameron government is proposing a "three strikes and you're out" rule for unemployed people who refuse jobs. The proposal, to take effect next year, would strip a $100-a-week job seekers' allowance for up to three years from those who reject three consecutive job offers, with shorter suspensions for those refusing a first and second offer.
Similar penalties would be applied to those who refuse to take part in unpaid community work programs the government plans as part of its efforts to familiarize jobless people with the world of work. The new proposals provide for able-bodied jobseekers to do regular four-week stints of manual labor, at tasks like removing graffiti, sweeping streets or gardening in public parks, as the price of retaining their state allowances -- and, as the government has explained it, to learn basic disciplines like working a 9-to-5 day.
The new measures would also include a strict new medical assessment starting in 2013 for many of the three million people on disability allowances, with the government aiming to save more than 10 percent of the $12 billion it currently spends annually on the program by expunging fraudulent claimants.
Last year, one man who claimed benefits by saying he had to use a wheelchair ended up in court for fraud after he was filmed running around a soccer field as a referee. Dozens of other such cases have been chronicled in Britain's newspapers.
Similar curbs were announced on a range of benefits that filled page after page in a government handout detailing allowances that have proliferated since the late 1940s, when a Labour government set out to build a welfare state founded on the National Health Service, the country's socialized system of medical care, and other measures aimed at protecting and uplifting Britain's working class.
Over decades, despite repeated government pledges to reform the system, it has grown to the point that it now costs taxpayers more than $305 billion a year, nearly five times the annual defense budget, and more than the national budgets for the police and education combined.
The Cameron government had previously announced plans to sharply curtail one of the government's costliest benefits, an $18 billion program that has paid $32.50 a week to every family for a first child, and $21.50 for every subsequent child, until they turn 19. Starting in 2013, any parent earning more than $70,500 a year will lose the benefit payments. Another measure already announced will curb the $32 billion annual cost of government housing subsidies, limiting payments to low-income families to a maximum of $640 a week.
In some cases that British newspapers have highlighted in upmarket London neighborhoods like Kensington, immigrant families have been receiving housing subsidies exceeding $160,000 a year.
The Cameron government has said that the benefits programs are so prolific that billions of dollars go unclaimed because Britons are unaware the programs exist. Examples include funeral payments to those on low incomes; winter fuel allowances of $40 a week for pensioners; a "bereavement allowance" of up to $155 a week, for a year, for the death of a spouse or a civil partner; and a tax-free lump sum of $3,200 for those losing a spouse or partner who was under state pension age.
For the governing coalition of Conservatives and Liberal Democrats, now ending their first six months in office after ousting the Labour Party, the welfare reforms are at the center of a harsh austerity program hailed by influential economic bodies like the International Monetary Fund as a pacesetter for cutting growing government deficits across the industrialised world.
By focusing on welfare expenditures that account for nearly a third of Britain's annual budget, the Cameron government aims to save about $30 billion, about 10 percent of its welfare outlays, over the next four years. But the wider cuts in government spending, amounting to $130 billion and averaging nearly 20 percent for most government departments up to 2015, are a huge political gamble. The risks became starker when 50,000 people, mostly students, marched through the Whitehall government district on Wednesday to protest education spending cuts and the stiff increase in college tuition.
The march set off scenes of violence that alarmed many Britons, fearful of a new era of street turbulence on a scale not seen since Prime Minister Margaret Thatcher's economic overhaul in the early 1980s. Apprehension has spread as the full impact of the cuts begins to be felt. Labor unions have threatened coordinated strikes aimed at crippling government services. The welfare changes, affecting hundreds of thousands of recipients, could stir more unrest.
After Wednesday's violence, Scotland Yard's chief, Sir Paul Stephenson, said that the 300 officers deployed for the protests had been grossly inadequate, and that his force had been "embarrassed" when a hard core of protesters, many wearing ski masks, stormed the Conservative Party's Thames embankment headquarters, shouting "Tory scum!" and forcing senior Conservative officials to barricade themselves. The protesters smashed windows, set fires and threw eggs, bottles and other projectiles. A dozen police officers were injured, and a similar number of protesters were arrested.
The violence occurred as Mr. Cameron, 44, arrived in South Korea for the Group of 20 summit meeting of the world's leading economic powers, and he promised a stern response. "What is not part of our democracy is that sort of violence and lawbreaking," he said. On the welfare cuts, he was similarly unyielding, saying the government was committed to changing a situation in which many people lived off benefits because doing so paid better than going to work.
Iain Duncan Smith, the work and pensions secretary, told Parliament that plans to replace about 30 different benefit payments for housing, unemployment, disabilities and other needs with a single payment would improve the lot of millions of recipients by simplifying the system, and, in many cases, give those in genuine need more money, not less.
"There will be no losers," Mr. Smith said. Rebutting critics who said that Britain's sluggish climb out of recession had left no jobs for the unemployed to fill, he said government job centers had posted more than a million job vacancies in the past three months.
But there were signs that the government had aroused a formidable opposition among aid groups and unions, which could further galvanize resistance. "Changes to the benefits system proposed today will expose people to the risk of destitution," said Kate Wareing of Oxfam, one of Britain's best-known charities. "Removing benefits and leaving people with no income will result in extreme hardship for them and their families."
Story First Published: November 12, 2010 19:46 IST