This month, the UK is undergoing a massive change to the welfare system as the latest phase of government spending cuts and reforms get underway. Any debate about the approach to dealing with the nation’s finances usually descends into political mudslinging (not least among our politicians) so yesterday’s report by the Financial Times, looking at the impact of austerity rather than its political motives, was very welcome indeed.
Unfortunately, any joy to be found in reading an evidence-based investigation into the effects of spending cuts on our society and economy was mitigated severely by the outcome of the FT’s research; that the current approach is widening the gap between rich and poor on a geographic basis, with northern towns and cities being hit five times as hard as those in the south.
The report notes the higher levels of benefit dependency in many northern regions, where the decline in traditional manufacturing industries has never been adequately addressed, and the impact that increased cuts will have on local economies there. Taking benefit money away in such a swift move, without sufficient jobs available to replace income, means that already struggling regional businesses will be hit even further.
As we pointed out last year in our reports, The Frustration of Aspiration and Plugging the iGeneration into the Jobs Market, young people already face enormous problems in trying to build an independent life for themselves beyond the family home, and those problems are greatly affected by where they live. Creating an even greater wealth divide between north and south will only make this task harder and, in some areas, almost impossible.
To illustrate this, the FT highlights the specific problems of one northern town, Blackpool. The change in benefits there will mean that for every working-age resident, the once thriving resort town will lose more than £900 a year, the biggest cut in the country. The impact on an already struggling town will be devastating and raises concerns over the likelihood of the most vulnerable people turning to payday lenders and loan sharks.
In direct contrast to the plight of Blackpool, the FT report also looks at the situation in Guildford, Surrey, which is largely unaffected by the cuts, having a jobless claimant count of only 1.6 per cent, compared to the 3.9 per cent UK average.
Overall, the report paints a very grim picture for the short term future of the UK, and there is no way to anticipate the long term changes the austerity programme will bring about. If ever there was a need to better educate our young people to handle the problems they face, then this is it.
Greater careers guidance, a better understanding of the jobs market, the means to manage their money effectively, and an understanding of their role as citizens are all critical aspects of a life skills education that is desperately needed for this generation. Right now, giving them that knowledge and the skills that underpin it would be the best form of state support they could receive.