Is a mandated ‘WorkFAREhouse’ the Tories’ answer to the ‘bedroom tax’ court case?

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Work camp: But is this a Nazi camp of the 1930s/40s, or a prediction of a British residential workfare scheme for the disabled in the 2010s?

Residential Workfare for the disabled. If that sentence hasn’t already set off at least three separate alarms in your head, then you haven’t been paying attention. What follows is a warning: Stay alert. Ask questions. Do not allow what this article predicts.

Workfare, for all those who still need enlightening after three years of this particular Tory-led nightmare, is a government-sponsored way of keeping unemployment high while pretending to be doing something about it. The idea is to send unemployed people to work for a period of several weeks – often for a large employer that is perfectly capable of taking on staff at a reasonable wage – and remove them from the unemployment figures for that time, even though they continue to be paid only in benefits. When the time period is served, the jobseeker returns to the dole queue and another is taken on, under the same terms. The employer pays nothing but reaps profit from the work that is carried out. The jobseeker gains nothing at all.

The disabled are, of course, the most persecuted sector of modern British society – far more vilified than hardened criminals or terrorists. Since the Coalition came into office by the back door in 2010, it has been government policy to close down employers taking on disabled people (Remploy factories), to spread propaganda against them, claiming they are scroungers or skivers, and the vast majority of disability benefit claims are fraudulent (this is true of only 0.4 per cent of such claims – a tiny minority). The bedroom tax, enforced nationally in April, has proven itself to be a means of driving disabled people out of homes that have been specially adapted to accommodate their needs. The Work Programme, which was extended to disabled people last December, has proven totally unsuited to the task of getting them into work, yet the Work Capability Assessment for Employment and Support Allowance continues to sign 70 per cent of claimants off the benefit as ‘fit for work’ (whether they are or not), and a further 17 or 18 per cent into a ‘work-related activity’ group where they must try to make themselves employable within 365 days.

The word ‘residential’ – applied to any sector of society at all, never mind whether they’re disabled or not – rightly sends shivers through the hearts of anyone in this country of good conscience. The terrible regime at the Winterbourne View home in Bristol is still recent, and nobody wants to see those crimes repeated – on anyone.

However, put these three words together and that seems the most likely consequence.

So why bother?

Here’s some pure speculation for you: The government knew that the bedroom tax was going to put the squeeze on the disabled, and it knew that disabled people would complain (although there was no way of knowing whether it would win a court case on the issue, as happened this week). It had already devised a solution and called it residential training for the disabled.

This is already running. It provides worthless Work Programme-style training to participants while filling their heads with the silly nonsense that the Skwawkbox blog showed up to such great effect earlier this year, encouraging them to ‘think new thoughts’.

The residential aspect means that participants currently get to stay in their own rooms, in relative comfort – but this could change, and very soon.

You see, this scheme is intended as a pilot study, and the plan has always been to expand this form of training, opening it up to the market, for private-sector parasites to run for profit after competing with each other to put in the lowest bid for the franchise.

Bye bye, individual rooms. Bye bye, dignity. Hello, communal dormitories. Hello… well, eventually it’ll just be hell.

And you can be sure mandation will follow, meaning anyone refusing to attend will lose benefit.

Gradually, disabled people will disappear from our communities, ending up in these residential ‘Workfarehouses’.

How long will it take before we start hearing stories about abuses taking place against people living in these places?

How long did it take before the stories came out of Winterbourne View?

Come to that, how long did it take before the world found out about places like Auschwitz or Dachau or Belsen?

I know what you’re thinking:

“It couldn’t happen here.”

Think again.

(The first Vox Political book, Strong Words and Hard Times, is available now in paperback or as an eBook, including a large ‘footnotes’ section in which you can actually connect to internet links containing supporting evidence – if you’re reading on a device that supports this kind of activity.)

From the DWP to the economy – the Coalition’s growing credibility chasm

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All the wrong choices for all the wrong reasons: The evidence fails to support George Osborne’s economic austerity policies – the only likely explanation seems to be an intention to rob this nation of everything possible before 2015.

The more we learn of the Tory-led Coalition’s policies, the wider the gap grows between what it is doing and what it should be doing.

Look at the sham psychometric tests, exposed by fellow blogger Steve Walker in a series of articles on his Skwawkbox site. It is now firmly established that the DWP – aided by the Cabinet office ‘nudge unit’ – set out to pressgang put-upon benefit claimants into taking part in a crude piece of neuro-linguistic programming – no matter what answers you provided, the test always pushed out a ridiculously upbeat appraisal of your character and then tried to get you to act according to this verdict in your jobsearching activities. The theory is that this will make a jobseeker more confident and finding a job easier. The problem is that it’s quite utterly ludicrous.

If you haven’t already, you can read the Skwawkbox exposure of this particular caper on that site – there are plenty of links to it from this one. The reason it is mentioned here is that it provides a useful set of questions with which to analyse any government activity: First, is the theory behind this activity sound? Second, if that theory is being used to support a particular course of action, is that action justifiable?

So let’s turn once again to George Osborne’s reasons for pursuing economic austerity, as described in the letter Vox Political received from the UK Treasury last month.

Firstly, the letter warns against the perils of losing market confidence. By this, we can see that it means we should fear any downward revision of our credit rating by the credit agencies, as “a one percentage point increase in government bond yields would add around £8.1 billion to annual debt interest payments by 2017-18”.

What’s being said is that a drop in our credit rating would mean the people and organisations that have invested in UK government debt (by buying our bonds) might move their funds to others, meaning the government could be faced with an interest rate rise, leading to increased difficulty in borrowing.

But we know that this isn’t true. The UK’s credit rating was downgraded only a few months ago. Did interest rates rise? Was our ability to borrow hindered at all? No. There’s a reason for that.

As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.

This means that the Treasury’s next point, that “any loss of investor confidence in the UK’s fiscal position would not only affect the UK, but also the global economy” is also meaningless. There won’t be a loss of investor confidence, so there won’t be an effect on the global economy.

We move on – to the Chancellor’s claim that fiscal austerity is required to prevent the slowing of economic growth that happens when the national debt hits 90 per cent of gross domestic product (or thereabouts).

You’ll recall that my letter to the Chancellor was prompted by the revelation that the academic paper on which he relied most often, by Reinhart and Rogoff, had been proved to be mistaken. The Treasury’s response pulled out a series of references to other academic works suggesting a fiscal cliff similar to the Reinhart-Rogoff model, off which we would drop if the national debt passed an arbitrary level around 85-90 per cent of GDP. These were published by the International Monetary Fund, which we know isn’t quite as keen on austerity as it used to be; the Organisation for Economic Co-operation and Development, which this blog marked out as “schizoid” only a few days ago; and others.

Obviously I haven’t had time to look up eight academic works to support any opposing theory I may wish to create – and I think I would be foolish to try. I don’t have any grounding in economics beyond what I’ve been able to pick up by following the national and international debates.

But, then, according to Dean Baker of the Center (yes, it’s American) for Economic and Policy Research: “As a general rule economists are not very good at economics.”

He writes: “Most economists are unable to conceptualize anything that someone with more standing in the profession did not already write about. This is the only reason that the Reinhart-Rogoff 90 per cent debt-to-GDP threshold was ever taken seriously to begin with.”

That prodded my curiosity to check some of the papers listed by the Treasury in support of its stance, and the three that I checked (The Real Effects of Debt, Public Debt and Growth, and How Costly Are Debt Crises?) all listed the Reinhart-Rogoff paper in their supporting references. So Mr Baker is right.

“Debt is an arbitrary number,” he continues. “The value of long-term debt fluctuates with the interest rate… The value of our debt will plummet if interest rates rise… This means that we could buy back long-term debt issued today at interest rates of less than 2.0 percent for discounts of 30-40 percent. This would sharply reduce our debt-to-GDP ratio at zero cost.

“Bonds carry a face value, meaning the amount that will be paid off when they reach maturity. This is what gets entered in our debt figure. However bonds also carry a market price, which fluctuates inversely with interest rates. The longer the term of the bond, the more its price will vary with interest rates.

“If interest rates rise, as just about everyone expects over the next three-to-five years, then the market price of the bonds we have issued in the current low interest rate environment will fall sharply. Since we count our debt at the face value of the bonds, not their market price, we could take advantage of the drop in bond prices to buy up… bonds at sharp discounts to their face value.

“The question is why would we do this, we would still pay the same interest? The answer is that the policy would make no sense for exactly this reason.

“However, if we accept the Reinhart-Rogoff 90 per cent curse, then reducing our debt in this way could make a great deal of sense. Suppose we can buy back debt with a face value of 60 per cent of GDP at two-thirds its face value, or 40 per cent of GDP. In our debt accounting we would have reduced our debt-to-GDP ratio by 20 percentage points. If this gets us below the 90 per cent threshold then suddenly we can have normal growth again.

“Yes, this is really stupid, but if you believed the Reinhart-Rogoff 90 per cent debt cliff, then you believe that we can sharply raise growth rates by buying back long-term bonds at a discount. It’s logic folks, it’s not a debatable point — think it through until you understand it.”

I found Mr Baker’s piece after asking Jonathan Portes of the National Institute for Economic and Social Research (NIESR) for his opinion on the Treasury letter. He described it as “Predictable and largely irrelevant”.

So despite my lack of economic education, we have a working theory that suggests the Treasury has built its economic castle on the sand; that its justification for austerity is unsound. What about the austerity measures themselves? Are they justifiable on any level at all?

Evidence suggests not.

Let’s go back to our other friend in this matter, Prof Malcolm Sawyer. “Fiscal austerity and cuts in public expenditure do not work – there is a limited, if any, effect on reducing the budget deficit, and any return to prosperity is severely undermined.” We can see that this is true, using the government’s own figures. It managed to cut the deficit from £150 billion to £120 billion in 2011-12, mostly by axing large projects that invested in the UK economy. How much did it cut from the deficit in 2012-13? Less than £1 billion. The benefit cuts that created much of the fuel for this blog have not helped to cut the deficit at all.

“The reduction of the budget deficit can only come from a revival of private demand which is harmed by an austerity programme,” Prof Sawyer continues. Again, we can see that this is true. Austerity measures such as benefit cuts and the axing of infrastructure investment projects means there is less money available to the people who are most likely to spend it – the working- and middle-classes, and those who are unemployed. People with less money have to spend just about everything they receive in order to cover their costs. That money passes into circulation and the economy grows, through the fiscal multiplier effect. An attempt to explain this effect appeared on this blog within the last few days. The point is that demand increases when the people who earn the least have more to spend.

Therefore we see that Prof Sawyer’s next statement, “Deficit reduction requires investment programmes and reduction of inequality to stimulate demand”, is already proved.

So the answer is to reduce the unemployment rate by creating more jobs and closing the jobs deficit, as highlighted in this blog only a few days ago; to raise incomes by significantly increasing the minimum wage and adopting the proposed ‘living wage’, as promoted in this blog frequently; and investment in infrastructure projects.

What has Osborne done, along with his economically-illiterate chums?

He has created high unemployment.

He has depressed wages.

He has cut infrastructure projects.

He has, therefore, sucked all the demand out of the economy. What effect has this had?

Economic growth has, in the single word of Shadow Chancellor Ed Balls, “flatlined”, borrowing has remained high and the national debt is continuing to rise.

In other words, this part-time Chancellor’s strategy – a plan on which we have all been asked to judge the entire Coalition government, let’s not forget – has failed. Hopelessly.

I return you to Prof Sawyer, one last time [bolding mine]: “The austerity programme is economically irrational, socially irresponsible, and lacks credibility that it can reduce the budget deficit and secure any return to prosperity. The time has come to rebuild through investment and through a major assault on inequality.”

IDS and too many other ministers are having their way by playing ‘fast and loose’ with the facts

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Hoban lies: And this is just a taste of the many ways the Conservative-led government has been trying to hoodwink you and me since 2010.

It seems the Conservative Party is doing exactly as many of us feared, and using the attack in Woolwich on Wednesday to revive its proposals for laws to snoop on the emails and social media communications of law-abiding citizens.

Make no mistake – these powers would not be used for the good of the country, but for repression. And bear in mind that, for a Tory, the law is something that they set, and the poor obey. They think it doesn’t apply to them.

Let’s all remember that these new calls have been prompted by the actions of two men who were already known to – and monitored by – the security services. Monitoring your internet communications would not have made any difference to what happened in such a situation.

You cannot trust the Tories with the facts – all we have to do to prove that is look at Iain Duncan Smith.

Here is a man who will say anything to get his own way – which is to impoverish people who are already poor, pushing them beyond breaking-point with ridiculous ‘directions’ and unreasonable decisions in the hope, one presumes, that they will sign off benefits. The reality is that many of them go on to die from aggravation of their illnesses (if they are sick or disabled) or commit suicide.

He will be dragged before the Work and Pensions Committee within the next few weeks to answer for some of these transgressions, including his claim that 8,000 people who would have been affected by the benefit cap had moved into jobs instead, which the UK Statistics Authority rubbished by pointing out that the report from which he drew the figures “explicitly states that the figures are ‘not intended to show the additional numbers entering work as a direct result of the contact'”.

Worse than that was the claim, taken up by fellow Tory truth-fiddler Grant Shapps (if that’s his name today), that 878,300 people people decided not to pursue their claims for Employment and Support Allowance because a change in the benefits system meant that they’d have to be assessed for their level of disability – and that this showed how necessary this government’s attack on disabled people is. In fact, the figures represented nothing more than ‘churn’ – a turnover of claims withdrawn because of perfectly normal things like people getting better, or finding a job they can do even if they’re ill. After the government intensified its scrutiny of disabled people, the number in receipt of the benefit increased.

Iain Duncan Smith isn’t the only one making mockery of the facts. Look at George Osborne, who made unsupportable claims about the value of another DWP effort – Workfare – a few weeks ago.

Osborne also talks tough on tax avoidance, but he himself is known to have taken part in a legal tax avoidance scheme; he advocated one to a caller on a TV politics show; he re-wrote the law to make it easier for firms in the UK to stash their cash in offshore subsidiaries, putting their profits into tax havens rather than the British tax system; and he allowed tax lawyers from the so-called ‘Big Four’ accountancy firms into his department, where they re-wrote tax laws to make it easier for their clients to dodge high tax bills.

David Cameron said the amount of money available to the NHS was rising, when in fact it had fallen.

Cameron also claimed – on a party political broadcast! – that the national debt was falling under his Conservative Party. In fact, it has risen massively during the course of this Parliament, due primarily to the poor decisions made by the comedy Prime Minister and his allies.

It seems Cameron is a serial exaggerator of the truth. On April 15 he tweeted that the benefit cap is equal to the average wage. His claim was, therefore, that this is £26,000. Average family income, when benefits are taken into account: £31,500.

The government also lied that disability benefits were not affected by the benefit cap. Employment and Support Allowance is a disability benefit and is counted when considering whether a claimant’s income is to be capped.

On March 19 this year, Tory employment minister Mark Hoban lied to Parliament that there were no league tables in place showing which Job Centres had applied the most sanctions on jobseekers. Just one week later, those league tables were leaked to the press. Like his boss, Iain Duncan Smith, Hoban should have been expelled from Parliament under Parliamentary convention. Both are still in office. Why?

Fellow DWP minister Esther McVey has also misled Parliament and the public, this time with regard to Disability Living Allowance.

And, if you want proof that Tories like to play ‘fast and loose’ with the law:

Smith’s department has been forcing people to take rubbish ‘psychometric’ tests that have been rigged to produce set results, as part of an illegal experiment by Downing Street’s so-called ‘nudge unit’ (such experiments require the willing consent of the participants and none has ever been given).

The test itself was stolen by the ‘nudge unit’ from an organisation in the USA, and the UK government has been facing legal action from those people as a result.

The DWP lost a judicial review earlier this week, when a tribunal found that the ‘work capability assessment’, a so-called medical test (in reality nothing of the sort) designed to make it easy to push people off of the sickness and disability benefit Employment and Support Allowance, discriminates against the mentally ill.

Worst of all was the moment in March this year when Iain Duncan Smith decided to actually change the law, because his policies had been found to be illegal. Think about that! If you or I did something illegal, we would pay a penalty ranging from a fine right up to imprisonment for an indefinite period of time; if Mr Smith does it, he changes the law so he can be whitewashed. Tories think the law doesn’t apply to them. His department had been found to have breached human rights laws with the regulations it had been using to sanction people who refused to take part in Mandatory Work Activity or Workfare schemes. Utterly despicable – and worsened by the fact that the Labour Party colluded with the Conservatives to change the law, with no meaningful concessions to show for it.

Come to think of it, if you can remember far enough into this Parliament’s useless history, you might recall that the Department of Health, under Andrew Lansley, started implementing changes to the structure of the National Health Service – illegally – before his Health and Social Care Act was passed by a misguided and misled government.

The Information Commissioner had repeatedly ordered Lansley to publish a risk assessment which had been compiled by civil servants, and which is believed to have explicitly warned that the financial viability of the Tory NHS Bill was seriously questionable, predicting “deteriorations in the financial positions of one or more NHS organisations”. Practices could go bust or require central intervention to prop up their financial position. The Risk Report also warned of economic ‘slippage’ and ‘cost pressures’ arising. The London NHS risk report – which was made public – categorically stated that commissioning groups run by GPs may “not be able to secure [services] […] within the running cost range”.

As Mark McGowan pointed out on his blog, the entire top-down reorganisation of the NHS was done “without a mandate, having concealed their health policy”.

All of the above examples either occurred, or were referenced, within the last two months alone.

With a record like that, how could we possibly believe the ‘snoopers’ charter’ will be a blow for freedom?

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