Don’t listen to JP Morgan. Britain’s benefits system is dire 

Following the news that the Office for Budget Responsibility has downgraded the UK’s productivity performance, chancellor Rachel Reeves has reportedly been left with a £20 billion gap in her tax and spend rules to meet, and a budget in November that could hardly have higher stakes.  

American investment bank JP Morgan have been quick to point to where they believe the burden of raising that money should fall, warning in the Daily Telegraph that “Britain must cut welfare spending”.

Karen Ward, from JP Morgan Asset Management told the paper: “If we were not willing to tackle the long-term structural problems we have in spending, we’re going to be talking about tax hikes every year.”

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Other banks have echoed similar sentiments. In response to a report in which the Institute for Fiscal Studies (IFS) suggested the chancellor consider welfare cuts, a spokesperson for Barclays said: “Welfare is totemic. It’s totemic for the market because it shows a willingness to do hard things and burn a little bit of political capital.”

Opposition parties are marching to their tune. At their last party conference, the Conservatives pledged an eye-watering £23bn in cuts to welfare, while just last week Reform have pledged to cut personal independence payment (PIP) for people suffering from anxiety.

However, as Amnesty International’s Social Insecurity report laid bare, while cuts to welfare may look tempting from spreadsheets in the City of London, these calls are completely out of touch with the grim reality on the ground. The rate of poverty in the UK is now tragically higher than at any point in the 21st century.

Almost a quarter of families in the UK are living in poverty and tragically more than a third of children. Our report revealed that failing social security is a key driver of this, and that far from being protected, people are forced to live in shame, fear and insecurity by a system that is consciously cruel and that erodes dignity by design.

What bankers see as “burning a little bit of political capital”, we see as parents having to choose between buying a winter coat for one of their kids or new shoes for the other who’s grown out of theirs, because they can’t afford both. 

Claimants we spoke to revealed shocking stories of hostile and discriminatory behaviour, including one who told us they had to attend an appointment just two days after their baby had died.

Meanwhile a social security advisor described how a client had a PIP claim terminated as they were only offered telephone appointments, despite them being profoundly deaf. Other claimants report being sanctioned for missing a single phone call or being threatened with sanctions in response to having a panic attack at the Jobcentre.

Our research shed led on how complex obtaining social security often is. As many as 64% of social security advisors interviewed rated it very difficult or difficult to get access to information on universal credit, and 68% of advisors said the same for PIP and 58% for ESA. Meanwhile, 52% of the claimants interviewed rated access to Social Security schemes as difficult or very difficult.   

The report also exposed how unjust and ill-informed decisions on sanctions and deductions create further distress for those often already in very challenging situations. Around 78% of people we spoke to who have been sanctioned said it worsened their mental health, and 55% told us they reduced the food they ate and 35% went without food.

Nearly half (47%) of people stated that it worsened their physical health, and 44% of people told us they were forced to borrow money to make ends meet.  

Despite the UK having some of the least generous welfare across the OECD, the government remains determined to cut welfare spending, and to that end has turned to automation. But our research has shown that the Department for Work and Pensions’ (DWP) constant testing, rolling out and rolling back of costly AI and digital technologies has made social security inaccessible for those who do not have access to laptops or mobile phones and other devices.

Faced with error-prone automated systems, we found that claimants are now often left in a bureaucratic limbo and that the success of a claim can be dependent on whether the claimant neatly fits into set criteria rather than their actual eligibility. 

Social security exists to make sure that no one is hungry, homeless or living an insecure life no matter what misfortune befalls them. It’s a human right, not a gift for politicians to give or take away. It is unforgivable than in a relatively wealthy country like ours, poverty is become widespread, and successive governments have chosen to weaken social security to the point that the system is cruel, degrading and inaccessible.

JP Morgan’s recommendation is completely out of touch with the awful reality many claimants are forced to live in, and listening to this type of ill-informed advice is no doubt partly why the government got it so wrong earlier in the year. We need a complete overhaul of our social security system so that it treats people with dignity and protects everyone from poverty, not harsher policies that push more people into destitution.

Naomi McAuliffe is head of policy and research at Amnesty International UK.

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