Written evidence submitted by Oxfam
SUMMARY
1. Our response consists of two main elements: specific
concerns around the proposals outlined in the White Paper, particularly
around gender; and identifying areas in which detail or explanation
of rationale is lacking, and we believe the Committee should request
further information from the government.
ADDITIONAL INFORMATION
2. Oxfam have already put on record many of our comments
and concerns around Universal Credit in our response to the Department
for Work and Pensions consultation paper (attached, and also available
at http://www.oxfam.org.uk/resources/policy/right_heard/response-to-21st-century-welfare.html).
In our evidence, we also refer to a gender analysis of the same
paper, which was commissioned by Oxfam, and written by Janet Veitch,
with assistance from Fran Bennett (attached, and also available
at: http://www.oxfam.org.uk/resources/policy/gender/gender-perspective-welfare-reform.html).
3. We have also set out our broader principles on
welfare reform in a briefing paper from June 2010 (attached, and
also available at: http://www.oxfam.org.uk/resources/policy/right_heard/struggling-with-the-system-welfare-reform.html).
In addition, we published a report in April 2009 on the experiences
of people in Clydebank, West Dunbartonshire affected by the transition
from Incapacity Benefit to Employment and Support Allowance, which
holds important lessons for ongoing welfare reform, and which
has informed our thinking and understanding in this area (attached,
and also available at http://www.oxfam.org.uk/resources/ukpoverty/downloads/To%20banker%20from%20bankies.pdf).
IMPACT UPON
WOMEN
4. We have particular concerns around the ways in
which the proposed reforms will impact upon gender equality, and
on the livelihoods of women living in poverty.
5. Calculating and making payments at the household
level is problematic. Household assessment and payment assumes
that money coming into the household is shared equally between
men and women in couples. Research on intra-household allocation
of resources suggests that this is not a safe assumption. We would
like to see the government explain why it has chosen a single
household payment, rather than, for example, splitting payments
intended for adults equally between both halves of a couple.
6. In addition, research shows that money going into
the family via the "purse" (ie women) rather than the
"wallet" is more likely to be spent on children's needs.
We welcome the commitment in the White Paper (Annex 3, paragraph
10) to explore continuation of payment to the main carer of support
for children, as occurs currently under Tax Credits. It is crucial
that money intended for children continues to be paid to their
main carer (usually women), as otherwise this risks damaging children's
welfare, as well as negatively impacting upon women within couple
households.
7. In terms of assessment at a couple level, it is
important that the government explains how the household unit
is to be designated, and why. Family units can be chaotic, with
people moving in and out of the household regularly, and it is
crucial that the government takes account of "new" rather
than merely traditional family forms.
8. We were pleased to see that Child Benefit is not
to be included in the Universal Credit, and therefore means-tested.
Child Benefit is particularly important for women, as a source
of independent income for individuals which is unaffected by a
partner's income. For that reason, we urge the government to refrain
from further means-testing of Child Benefit, and to retract existing
plans to means test. It and other universal benefits not only
help to provide independent income for women in different family
types, but also help to promote solidarity in social protection.
9. In order to protect the principle of universal
Child Benefit, it must not be included in the overall benefit
cap calculation. Child Benefit is intended to be ring-fenced as
a universal benefit for children, and so should not be considered
for purposes of capping income at the household level. We urge
the government to give assurances that it will not introduce means-testing
of Child Benefit through the back door through such a mechanism.
10. It is crucial that barriers to women's employment
are considered, beyond the limited (though crucial) "better
off in work" aspect upon which Universal Credit focuses.
In particular, childcare must be taken into account - in terms
of quality, affordability and accessibility. Investment in such
childcare should be prioritised. Where government supports childcare
financially, it must be with the aim that work incentives for
those whose employment is contingent on childcare support are
at least as favourable as for other people claiming Universal
Credit. Regrettably, this is not the case in any of the proposed
mechanisms for paying for childcare. The likely effect will be
to make work pay less particularly for lone parents and for second
earners in households with children - in both cases, probably
women. We would like to see the government explain the rationale
for making work less affordable for such groups. More broadly,
this should be considered in the context of the gender pay gap,
and the fact that women are more likely to be in low-paid employment.
11. Finally, it is crucial that proposed changes
to conditionality do not impact disproportionately upon women.
More stringent conditions are likely to hit carers harder, especially
parents bringing up children alone (mainly women). We would like
the government to explain what will be done to minimise the impact
of sanctions on children living in families affected by sanctions.
Even if sanctions on lone parents will be capped, when they already
live below the poverty line this is nonetheless unacceptable.
What has the government done to assess the impact of sanctions,
eg use of loan sharks, petty crime, or homelessness?
12. We would urge the government to incorporate into
its "reasonable job offer" test that parents with childcare
needs not be required to work for a lower incentive than the standard
taper under Universal Credit, once childcare costs have been taken
into account. Quality and accessibility of childcare must also
be taken into account before any sanctions are applied.
AREAS IN
WHICH EXPLANATION
IS REQUIRED
FROM GOVERNMENT
13. Absent from the White Paper is any explanation
of the government's long term plan for the welfare system. We
would encourage the Committee to request such a plan from government.
This should address in particular what levels of benefits, tapers
and conditionality will be set at in the future. This is of crucial
importance as benefits and work incentives are both being set
at lower levels than are consistent with a decent income in the
case of benefits, and the incentives to work for the highest rate
tax payers in the case of work incentives. We are told that this
is due to a lack of resources in the current fiscal climate. The
government should therefore explain how it sees the trajectory
for these in the longer term.
14. The government must also explain what it has
planned in terms of short term, transitional safeguards. This
applies to those who will have weaker work incentives under the
new system. It also applies more broadly to people on low incomes
who will find their existing budget-management tools removed,
and who will be especially vulnerable to system failure now that
there is only going to be one payment. This is particularly pertinent
to women, who tend both to be household budget managers in low
income households, and to act as "shock absorbers" at
times of crisis, going without in order to protect other members
of the household. In particular, the government must explain what
support along the lines of the current Social Fund is going to
look like, and how it intends to meet the need for additional
support or education for people to up their skills in budget management
and financial planning.
15. Given the risks to people living in poverty of
its failure, it is imperative that an independent evaluation is
carried out of the planned IT system for handling Universal Credit.
The government should explain whether this has occurred.
16. We would also like reassurances from the government
of how, in light of plans to deal with a far higher proportion
of administration online under Universal Credit than under the
current system, it plans to address issues of digital inclusion.
At present, partners with whom Oxfam work have asked for more
face to face contact not less. This particularly includes vulnerable
groups such as women escaping violence, and some BME groups. The
latter are among the groups who will need assistance in filling
in forms, and who could be excluded by an automated system.
17. The government must provide an explanation of
how it plans to match its undertaking not to further reduce the
value of benefits with action. Promises in place do not match
with the reality of movement from RPI to CPI uprating, and stealth
cuts through changes to Housing Benefit.
18. In its proposals for the extension of conditionality,
the government proposes to use the threat of extreme sanctions,
up to and including the threat of destitution, to coerce people
into work. It is unacceptable for the government to remove - or
to threaten to remove - the basic right to social protection from
anyone. Additionally, research shows that, while sanctions unequivocally
cause severe hardship, and contribute towards increased crime
rates, their impact on employment is at best mixed, and can lead
to worse outcomes in the longer term (see A review of benefit
sanctions, JRF, December 2010, available at http://www.jrf.org.uk/publications/review-of-benefit-sanctions).
Support and encouragement should be the government's focus, rather
than punishment.
19. These proposed sanctions are, to a large extent,
at the discretion of personal advisers. The government should
outline how it plans to ensure that the rights of claimants within
the system are upheld - for example through a contract of welfare
rights for individuals - especially in the context of the greater
responsibilities they are to be asked to fulfil. At present, many
people are not aware of their rights or on how to complain. This
needs to be flagged up to ensure there is equal responsibility
on both sides of the relationship between society and benefit
claimants if conditionality is to be expanded.
20. The government must provide an explanation of
the logic behind proposed earnings disregards. Proposals (in Annex
3) are to remove earnings disregards entirely from single, childless
adults, while childless couples are to have theirs increased substantially.
Yet no rationale is given for this step, which will have an enormous
financial impact upon millions of people.
21. Under the proposals for Universal Credit, the
state undertakes to subsidise low-paid work in order to make such
work a viable financial option for more people. In addition, the
government proposes, through the Work Programme, to pay the costs
of getting people on benefits "work ready". This amounts
to a substantial increase in corporate welfare. The government
should explain how it intends to ensure that employers - especially
large, profitable employers - are to fulfil their side of this
new social contract.
December 2010
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