Friday, October 19, 2007

Making British Poverty History the Conservative Way

David Cameron's speech about Making British Poverty History included the claim that "In Australia, for example, they have got private limited companies to run benefits and they have cut unemployment by 50 per cent. In states like Wisconsin in America they've cut benefit rolls by 80 per cent. We will follow their lead, and help people out of long-term poverty and into long-term employment."

But that's not what has happened in Australia or Wisconsin, or anywhere else which has adopted this kind of 'work first' welfare reform. Cameron is assuming that lower rates of unemployment mean lower rates of poverty.

Here's a study (pdf) from 2003 of what happened to families who participated in Wisconsin's 'Wisconsin Works' programme. It's worth reading all of it, but particularly relevant is the following:

"This employment did not necessarily translate into self-sufficiency. According to the state’s Unemployment Insurance Wage Records, median total earnings for those four quarters among sample members who were employed in at least one quarter were $4,131. Given that the poverty threshold for a family of three with two children (the typical family in our sample) was $13,874 in 2000 and $14,269 in 2001, it is clear that many of the families in our sample were unable to work their way out of poverty."

In Australia, levels of poverty rose between 1994 and 2004.

What's more, Cameron's proposals for welfare reform involve cutting the welfare bill by £3 billion (based on blind faith in the powers of the private and voluntary sector to get people into low paid jobs), so that he can increase tax credits for couples who live together. This is an inefficient way of reducing poverty (more people would be lifted out of poverty if this money were spent on benefits which helped all low income families). He also attacks the government for not supporting the voluntary sector properly, while elected Conservative politicians slash grant funding for anti-poverty community groups in order to keep council tax rises down.

None of this will help 'Make British Poverty History' - it is an ideological and hypocritical set of policies borrowed from the far right of the Republican Party in America.

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