Benefit sanctions are increasing hunger and depression not driving down unemployment

Why everything you thought you knew about poverty and its causes was wrong

It’s time to set the record straight on the ‘benefits brood’ and other such misconceptions (Getty)

The UK is a fairly hostile environment to be unemployed, but some might say the approach is starting to pay off. After all, unemployment is currently at its lowest rate in 42 years, with 109,000 more people entering employment in the three months to April this year.

With numbers like that, some people might be wondering if aggressive tactics such as benefit sanctions are helping drive willfully unemployed people into gainful work.

Yet that is not what the public spending watchdog believes. Last year the National Audit Office – the independent body that monitors spending for Parliament – declared that benefit sanctions are inconsistently applied across the country and that withholding payments pushes claimants into hardship, increasing their chances of experiencing hunger and depression.

Now, the latest report by Oxford University and the Trussell Trust food bank network has revealed that almost 80 per cent of food bank users had experienced food insecurity in the previous 12 months, meaning they could not buy enough food and/or had experienced entire days with nothing to eat.

Perhaps one of the reasons the British public is willing to ignore such dizzying poverty in the UK is the widespread belief that the poor are doing just fine. There’s the Shameless impression of people on benefits as having massive families, smoking, drinking and doing nothing to find work. It’s an image fed by TV programmes such as On Benefits, Benefits Street and Breadline Brummies.

Here are the common misconceptions, along with the facts, about British poverty.

Britain spends too much on welfare

In the UK, the Government spends 21.5 per cent of GDP on the welfare state. That’s undeniably a large amount but it is far less than other comparative EU countries. France, for example, spends 31.5 per cent and Denmark spends 28.7 per cent.

Our spending is just over the Organisation for Economic Cooperation and Development’s average, which also includes countries like Korea and Estonia.

Most benefit spending is on the unemployed

When benefit claimants are portrayed on TV and other media it’s often as workless, chaotic individuals. But the statistics of where the money goes paint a very different picture.

In fact, if you look at state spending in 2014/15, the Government spent £44bn on family benefits, income support and tax credits. Yet figures from the Office for National Statistics show that just £3.5bn of that went to unemployed people. The vast majority of working age benefits are paid to households where at least one adult has a job.

Another number that puts that amount into perspective is the amount of the benefits bill paid to retired households. £108bn was spent on pensions and £10bn on elderly care.

Many families have not worked for generations

A common myth about poverty is that families become “hooked” on benefits, subsisting on them for generation after generation and never working. That would be a good argument in favour of a harsh support system that forces people to work and breaks the chain of unemployment.

However, it is not the case. The UK’s Labour Force Survey shows that in households with two or more generations of working age there were just 0.3 per cent where neither generation had worked – and in a third of those cases the younger generation had left education less than a year before.

The state pays billions too much

Certain newspapers love to cover stories of benefits claimants who were discovered to be fraudulently working for cash-in-hand, or claiming for disabilities and then being photographed paragliding. It’s certainly newsworthy when someone scams the state for help they do not deserve.

But the frequency of these stories can leave readers with the impression that the UK’s benefits bill is massively inflated by such fraudsters, when the truth is quite the opposite.

In fact, while the amount estimated to be lost to fraud is substantial – £1.3bn or 0.8 per cent of all welfare spending – the latest figures from the Department for Work and Pensions suggest the total amount of benefits that go unclaimed by people who are entitled to them is far higher at £16.6bn.

And research from the organisation Turn 2 Us shows that 48 per cent of low-income households do not claim any of the means-tested benefits they could be entitled to.

To put that number in even greater context, the Tax Research UK campaign group suggests that tax evasion cost the country £119.4bn in 2014 alone.

Benefits claimants have bigger families

Google “benefits brood” and you will find hundreds of stories and documentaries about families with vast numbers of children all being raised on state funds. It’s easy to be left with the idea that poor people can have more children than those coping on tight but sufficient incomes, because they will receive state help.

Child benefit is now being capped after two children but the idea that massive workless families are receiving child tax credits, larger social housing and other support persists.

In fact, nine out of 10 families with three or more dependent children are working, official figures show.

Ugly truths

A study published last year by the Joseph Rowntree Foundation showed that more than 1.2m people, including 312,000 children, could have been considered destitute in the previous year.

The organisation defined such destitution as being unable to afford the essentials such as buying food, staying warm and dry, and keeping clean.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, said: “There are a shocking number of people in the UK living in destitution. It is simply unacceptable to see such levels of severe poverty in our country in the 21st century. Governments of all stripes have failed to protect people at the bottom of the income scale from the effects of severe poverty, leaving many unable to feed, clothe or house themselves and their families.

“Tackling the many causes of destitution is difficult. Many people affected are living on a very low income before they are no longer able to make their incomes stretch, or a financial shock like a benefit delay or family breakdown pushes them over the edge into destitution.”

Responding to the foundation's statement a DWP spokesperson said: “Taxpayers expect out of work benefits to be conditional on claimants doing everything expected of them to search, or prepare, for work. The reality is sanctions are only used in a very small percentage of cases and our guidance on how they are applied is the same right across the UK. The number of [Jobseekers' Allowance] sanctions has more than halved in recent years while employment is at a record high."