Is forcing out-of-work benefit claimants to use a “back to work card” for their groceries a good solution for our welfare system? The Tories certainly think so, pledging to use such a card for people who have been unemployed for more than six months and haven’t got a “strong employment record”. They will also have their universal credit cut by 30 per cent.
The party says this move would save £538m a year and affect about 350,000 people across England, Scotland and Wales. They’ve been looking at the SmartCards used in Australia, which are “income management debit cards” that prevent claimants from buying tobacco, pornography or alcohol, and from getting cash out or gambling.
The rationale behind the card seems to be twofold: firstly, that it would stop claimants from spending their benefits on alcohol, cigarettes or gambling when they should be using the payments from the state to cover basic living expenses while looking for a job; and secondly, that a “back to work” card – especially in the physical form that the Tories are suggesting it would be introduced, rather than a discreet app or “jam jar” of ring-fenced cash within a bank account – would also be a very visible way of flagging that someone is a benefit claimant when they are in a shop buying groceries.
The assumption, both from critics of the policy and, indeed, its Conservative proponents, is that the stigma of using the card will motivate someone to go back to work; that stigmatisation was one of the reasons Australia’s card system was withdrawn in 2022 after a change of government.
It probably will in the UK, but only for the people who already see being on benefits as a temporary situation that they want to get out of as soon as possible. For those who do regard claiming benefits as a “lifestyle choice”, there is little social stigma anyway, as they tend to have friends and family with a similar mindset, and who won’t see being on benefits as embarrassing. You are only stigmatised if the way you are living runs contrary to the values of those around you.
This isn’t the first time political parties have flirted with these cards: they’re one of those policies that come up time and again. Even in the last Labour government, ministers had to work out the correct balance between satisfying the public desire for benefits not to be treated as a “lifestyle choice” and treating claimants as responsible adults.
They, and their Conservative successors, tended to come down on the side of teaching claimants financial skills rather than institutionalising them by physically preventing them from buying certain things. They moved from paying housing benefit directly to landlords to giving the money straight to claimants so that they could budget in the same way as they would have to if they didn’t receive a penny of support from the state.
Paying benefits over claimants’ heads to landlords or restricting how people manage the money in their bank accounts in this way makes going back into work feel like even more of a cliff edge, which was one of the things that universal credit was meant to remove.
Iain Duncan Smith, who introduced that benefit reform under the Conservatives, was insistent that the payments should allow claimants to learn to manage their money properly on a monthly basis, just like someone who was on a salary. When he considered pre-paid cards, it was only for those stuck in “damaging spirals of alcohol or drug addiction” in order to ensure that the basic needs of those families were met, rather than the government inadvertently funding an addiction.
Perhaps the cards aren’t so much a solution to the problem of long-term unemployment or of communities where a life on benefits is considered something normal, as they are a solution to the Conservatives’ political troubles at the moment.
Kemi Badenoch’s party is not in meltdown, but neither is it getting the kind of attention which would allow it to climb back up the polls faster than an elderly tortoise on its way to something it doesn’t want to do. The Conservatives continue to compete with Reform UK both for attention and for bold, colourful policies that make voters feel their frustrations with modern Britain are being taken seriously.
It’s the kind of policy you can announce in opposition with few details, only to drop if you end up back in government because it not only won’t work for the work-shy claimants you want to target, but it will also make it harder for the vast majority of people to build the skills of independence that proper welfare reform should be encouraging. As with all previous debates about this kind of card, it will probably go nowhere.
So the policy doesn’t need to be designed in a way that means the cards themselves would work: they are much more about starting a political debate that gets the Conservatives some airtime. On that score, at least, it has been successful. It suggests that the Tories don’t see being in opposition as a lifestyle choice, either.
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