Welfare and vouchers: the Right’s denial of citizenship attack

There’s an excellent piece by Zoe Williams in today’s Guardian in which she describes the impact of the decision that crisis loans – now administered by local authorities – will be paid by vouchers or card; or in some cases will be given straight to a foodbank charity.  Williams is right to point out that a line has been crossed; that even though this scheme represents a minuscule element of total welfare spending, the belief that benefits should be paid effectively in kind rather than in cash is an important one.  It represents the triumph of an ideology – one that I have blogged about before – that seeks to deprive the poor of full citizenship, and to make citizenship instead dependent on income.

Neoliberalism is an ideology that places choice at its heart.  It is founded on the idea that freedom is based on the ability to make choices; thus to deny people choice about how they spend is, in the Right’s own terms, to turn those people into second-class citizens. I blogged a few days ago about how workfare is the workhouse of the twenty-first century; the mentality behind this voucher system is identical.  You are poor; you have therefore sinned.  You do not have the rights of the virtuous, and you are not deserving.  The humiliation of presenting your card or voucher at the checkout is to steel your character.

And, as Williams mentions, this is all of the piece with the lie of the poor living a life of ease in front of the Sky box and the flat-screen TV; a lie, and one that is fully in the worst traditions of the nastiest propaganda of the twentieth-century, but an essential one in order to ensure that those hit by austerity continue to back it at the ballot box, and one that is legitimised every time a politician from anyhwere in our (appallingly narrow) mainstream polity referes to “hard working families.”

Williams mentions cost, and notes in passing that the original Demos report advocating a welfare card system was sponsored by Mastercard; but does not quite draw the obvious conclusion, that this system will be a milch-cow for the private sector.  The point about cash is that it is free; it does not bring with it specific administration costs other than those – like the costs of minting coins and printing notes, and of handling cash – that are spread across all transactions.  Card transactions bring costs; not least to the merchant.  Who will bear the costs of these cards? The retailers, as in the case of credit and debit card transactions? Taxpayers? Or will there be a service charge added to the items that those on emergency loans buy, adding to the burden that poor people already face in paying more for services? The reason why the railways cost more in public subsidy for a worse service, and why healthcare on the US model is more expensive than the NHS model that will in a few days be abandoned is because of the administration and transaction costs between private entities in a world that is regulated by private contracts. Why would a Government that claims to be motivated by reducing costs create a system of benefit payments that is inherently more expensive?  The answer, quite obviously, is ideology.

It is a reminder that the return to the nineteenth-century vocabulary of pauperism and desert is almost complete. And I make one prediction – that you will not hear a syllable of complaint about this scheme from Liam Byrne and One Nation Labour, because the return to that vocabulary is in the warp and weft of the Westminster ideological consensus.


4 thoughts on “Welfare and vouchers: the Right’s denial of citizenship attack

  1. You are right to note that Zoe Williams’ piece ignores the corporate dimension, as does pretty much every other mainstream media commentary. The moralistic focus on nasty government ignores the fact that individual councils have been given leeway to decide how they will administer the new local funds, hence the decision of some to issue food parcels, fund food banks, or facilitate credit union loans.

    The decision of some to use prepaid cards should be seen as a default response – i.e. when faced with a new responsibility, the council has instinctively sought to outsource delivery. As a proven relationship is valuable, this gives an advantage to incumbent suppliers. It just so happens that Sodexo, an on-site outsourcing firm with numerous local government contracts, is also the provider of the existing Azure prepaid card for asylum seekers.

    Being a large corporate, Sodexo has an obvious interest in dealing with other large suppliers to ensure maximum service coverage and minimum transaction costs, hence the Azure card is restricted to large supermarket chains. The inexorable logic of capitalism turns the crisis loan into a commodity in its own right.

    There is a parallel with old truck system, whereby part of a worker’s wage was paid in tokens that could only be redeemed in a company store (this was made illegal at the end of the 19th century). In that light, this move is not just about punishing the poor, but about big capital squeezing out small capital and leveraging its existing power through local government outsourcing.

  2. Various Tories are already advocating that payment cards be extended to other discretionary benefits, such as JSA and DLA. Once that line has been crossed, it will only be a matter of time before the idea is extended to in-work benefits such as tax credits and child allowance.

    At this point, the supermarkets may seek to cut out the middleman (i.e. the card provider) and simply have the benefit value added as redeemable points to their pre-existing loyalty cards (pooling the points so they could be managed across multiple store cards would be straightforward).

    New technology will allow us to recreate the truck system on a national cartel basis. As Paul B notes, this will open up enormous secondary commercial opportunities as well.

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