Last night, Channel 4 engaged in yet more Poverty Porn, with the pseudo-reality programme Benefits Britain. The programme followed several 2013 social security claimants as they were put through the 1949 welfare system. As with the other Poverty Porn Programming, the social security system was portrayed as costly, over generous and prone to abuse – and those reliant upon it as feckless and entitled. It is time to bust the myths of Poverty Porn, and demand better from our media.
The UK in 1949
The UK of 1949 might as well be a different planet. The public had voted out the Conservatives and the country was represented by the Labour government of Clement Attlee. Confectionary such as sweets and chocolate were rationed. The gas industry was nationalised in the May. George Orwell’s book Nineteen Eighty Four was published in June. The world’s first passenger jet made its maiden flight from Hatfield in July. Wales opened its first comprehensive school in September. In December, the BBC made its first broadcast outside London and the Home Counties.
| 1949 | 2013 | |
| Infant Mortality (deaths per 1,000 live births) | 26 | 4.2 |
| Life Expectancy | Men: 65 Women: 69 | Men: 79 Women: 83 |
| Population | 43.7m | 56.6m |
| Unemployment Rate | 1.6% | 7.8% |
| Price of a loaf of bread | 4d (38p in today’s money) | £1.35 |
| Price of a pint of milk | 2d (19p in today’s money) | 46p |
| Average House price | £1,911 | £238,976 |
*all values for England & Wales
While the makers of Benefits Britain translated the old benefits into new money, they did not uprate in line with real price inflation. This made the core argument of the programme – an endorsement of the view that today’s benefits system is more generous than in 1949 – bogus.
The Fall in Taxes Since 1949
There are certain groups on British Society which have contributed significantly less to the treasury since 1949 – but they aren’t the working and jobless poor. While Benefits Britain and a host of other shows have seen fit to devote significant air time promoting the idea that the poor have never had it so good, almost none has been devoted to examining ever decreasing contributions from the wealthiest.
For instance, what about the dramatic fall in tax obligations on corporations and wealthy individuals?
Before 1965, profits were subject to income tax at the standard rate and to an additional “profits tax”. The old system was replaced by Corporation Tax, introduced at a rate of 40% by the Finance Act 1965.
The following comes from a report by the Economic Affairs Committee of UK parliament, published in July this year.
“In recent decades rates of corporation tax have steadily declined. During the 1980s the main rate fell from 52% to 35%, then during the 1990s from 35% to 30%. In 2008 the main rate came down to 28%, in 2011 to 26% and in 2012 to 24%…
In 2013 the Chancellor of the Exchequer announced that the main rate would be cut to 21% in 2014 and to 20% in 2015. He also announced that small company and main rates would be merged at 20% to give a single UK rate of corporation tax in 2015.[11] The Chancellor of the Exchequer has said he aims to achieve “the largest reduction in the burden of corporation tax in our nation’s history” so as to “compete with the world in our headline rate of corporation tax.” He contrasted the UK’s 20% rate (the lowest in the G20) with corporate tax rates in Germany (29%), France (33%) and the US (40%).[12]
The Government has also introduced a “patent box” under which income originating from patents owned in the UK will be taxed at 10%. It has relaxed anti-avoidance rules for controlled foreign companies[13] (the CFC rules) so that interest received in subsidiaries in low taxed countries from lending outside the UK will only be taxed at 5.75%, a rule that KPMG has stated “gives UK based multinationals an opportunity to significantly reduce their tax rate”.[14]”
Supporters of tax cuts for Corporations argue that asking companies to pay smaller amounts means these corporations are more likely to pay. Firstly, can we take a moment to appreciate the absurd double standard of such a statement? If an individual or small business refuses to pay their taxes, they are fined, or even imprisoned – taxes are not voluntary. So why the double standard for high net worth individuals and corporations?
Secondly, even if one were to accept the double standard – the bottom line is that the statement is unsupported by facts.
It was revealed recently that only one in four of the UK’s top companies pay their taxes, meanwhile they receive tax credits to the tune of hundreds of millions of pounds by people who do pay their taxes.
Company taxes now constitute only 12.5% (Corporation Tax is just 7%) of the tax revenues of the UK. In comparison, the people’s taxes, (income tax and VAT) make up more than 60% of the tax income.
The result of these tax changes is that tax receipts are lower today than in 1963. Worse, the composition of those taxes have changed as tax cuts to the wealthiest have seen tax rises to non means tested taxes that hit everyone.
Between 1979 (the launch of Thatcherite Neoliberalism) and 2012 the top rate of income tax was cut from 98% for unearned income and 83% on earnings, to a flat 45%. At the same time, VAT which applies to almost everything your regular person might buy rose from 8% to 20%. National Insurance has shot up from 6.5% to 12%.
This has meant that whilst income taxes have dropped as a proportion of income for most since 1979, income tax as a proportion of income has dropped significantly more for those earning higher incomes, and the total tax bill for a waged earner overall has increased to attempt to cover the shortfall of a great tax break for the wealthiest.
Benefits Britain neglected to mention that those in receipt of social security in the UK today do pay taxes. They will be paying tax on almost all their purchases as a result of the rise on VAT and other stealth taxes implemented throughout the last 60 years to accommodate cuts in income and corporation taxes. Many benefits are also taxed.
It is not social security claimants, but corporations and high net worth individuals that have never had it so good.
No More Poverty Porn
This list of Poverty Porn shows in recent weeks has been long and sad. Channel 4 have brought us Skint, Benefit Busters, How to Get a Council House and Benefits Britain. The BBC even chipped in with We All Pay Your Benefits. This list is not even exhaustive, just some of the lowlights.
All of these shows, intentionally or otherwise, feed into a myth that the UK is some sort of paradise for benefit cheats.
In reality, benefit fraud is just 0.7% of all claims – this means Benefits Britain, to be statistically accurate, would have needed to follow the lives of 100 claimants to show just one playing the system.
In these shows, most if not all of a handful of claimants are portrayed as milking it.
The total cost of benefit fraud is £1.2bn a year – this is less than half what administrative errors cost the DWP each year.
Meanwhile, the HMRC puts the gap between taxes due and taxes received at £30bn a year. A recent Oxfam report put the figure at £100bn.
Sadly, although tax evasion of up to 100 times more significant an economic issue than benefit fraud, it receives a tiny proportion of the air time. This allows the government to avoid tough questions about why, exactly, they are reducing the burden of taxation on the wealthiest who are already paying least. It also creates a public mood that welcomes, and even demands the government crackdown on those claiming social security. They used to have a word for media programming used to distort public mood in favour of a political goal by using misrepresented data: propaganda.
This Poverty Porn, point and judge programming, with its misleading statistics and sarcastic voice overs is just that. We must demand better from our broadcasters.
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