Last week, Disabled People Against Cuts wrote to Labour’s shadow Secretary of state for Work and Pensions, Jonathan Reynolds. We raised concerns about comments he made in an article for Politics Home where he suggested a new social security system is needed – one where those who pay more in get more out. DPAC like many other disabled campaigners are concerned that this approach will disadvantage disabled people who are unable to work and thus to “pay in”.
You can see a copy of our letter here: https://dpac.uk.net/2020/06/dpacs-letter-to-jonathan-reynolds-mp-regarding-his-statement-today-that-welfare-should-reflect-what-you-put-in-to-tackle-public-mistrust/
Reynolds replied to us on 11 June. His response is below:
Dear Steering Group,
Thank you very much for your email. I hope that this can help clarify my thoughts on this matter. The first thing I would like to stress to you is that support for disabled people and those with caring responsibilities is not and never should be contributory. I emphasised this in my interview with The House last week.
Contributory benefits have been part of the UK’s social security system from the very beginning. Although their role has reduced over time, they remain a key component of the welfare state today. The state pension is the biggest example of a contributory benefit. In addition, anyone who has lost their job during this crisis and who is ineligible for Universal Credit will predominantly have to rely on Jobseeker’s Allowance (JSA).
Jobseeker’s Allowance (now called ‘new style’ Jobseekers Allowance) is also a contributory benefit. To qualify a person must have paid National Insurance for the two years preceding their claim. It is not a marginal part of the system: between 16th March and the end of April a quarter of a million claims for Jobseeker’s Allowance were made. If a person qualifies for JSA, they are eligible for payment regardless of their partner’s income or the savings they possess (unlike Universal Credit). It is possible to be eligible for both JSA and Universal Credit at the same time, but under the way Universal Credit works any JSA would automatically be deducted from your UC claim so most people don’t bother claiming both.
Under the proposals Labour put forward at the beginning of the Covid crisis, people would both get more from Universal Credit (because we would abolish the benefit cap and the two child limit) and more people would be eligible to receive Universal Credit to begin with, because we would also suspend the savings thresholds. These thresholds – a particular severe version of the means test – exist because the Government believes if you fall on hard times you should spend your savings to support yourself regardless of the contributions you have made to date. If you have been saving for a housing deposit, or are an older person with relatively modest lifetime savings, you could be heavily penalised.
But even allowing for these changes we have called for, some people would still be relying on Jobseeker’s Allowance. The amount received is far from generous: just £74.35 for most people, and an even more miserly £58.90 if you are aged under 24. This is why we have also called for the uprating of both JSA (and ESA) in line with the increase in Universal Credit at the beginning of the crisis. However, if you compare this to a country like Sweden – widely acclaimed as one of the best systems in the world for supporting people through unemployment – you would find workers there who have paid contributions are eligible for 80% of their former earnings for 300 days in the event they lose their job, subject to a daily cap but with no means test. In addition, for those who have not paid into contributory funds the minimum provision is still considerably higher than ours. Social security systems that offer real protection for everyone tend to enjoy much higher levels of popular support and are more effective as a result.
It is a fundamental mistake to believe contribution is not still a part of our existing system or to assume contributory benefits somehow exist at the expense of universal provision. In the UK our social security has always been a combination of universal components (eg child benefit, until the Coalition Govt), means tested components (income support and now Universal Credit), and contributory benefits. This is separate to the support we have for disabled people and those with caring responsibilities. As we develop our policies to replace Universal Credit, eradicate child poverty, and develop a modern social security system that is truly fit for purpose, we need to consider what should happen to all these existing parts of the system. But I recognise we will not win support for this agenda unless we can demonstrate that the system we design will be there for everyone when they need it.
I wanted to make a final note on language. Because the UK’s current social security has so many holes in it, the consequences of not being within the remit of the furlough or self-employed scheme during this crisis are significant. For these people to then find out they are ineligible for Universal Credit, or only eligible for modest contribution-based support, causes understandable discontent. My constituents in this position tell me they feel they have contributed throughout their lives to a system that has not supported them when they most needed it. I would strongly draw a distinction between that genuine sentiment, and the language of someone like George Osborne with his rhetoric on skivers and shirkers, or the deserving or undeserving poor. We must always root our language and policies in the everyday lived experience of the public, and together build support for a system that everyone can rely on.
Thank you again for raising your concerns. I hope that this has helped allay any concerns you had. If you would like to discuss this any further, I would be more than happy to speak with you over the phone or Zoom.
With very best wishes
Jonathan
Jonathan Reynolds MP
Member of Parliament for Stalybridge and Hyde
Shadow Secretary of State for Work and Pensions