4. Welfare Retrenchment and the Perversion of Full Employment

Paradoxically, while the ‘retrenchment’ of welfare entitlements has been central to the pursuit of austerity under the Conservative and coalition governments, reducing actual expenditure on social security benefits has not. This is principally explained by the relationship between labour market outcomes and benefit expenditure. Welfare ‘retrenchment’, in combination with benefit sanctions and employment support programmes, helps to reinforce the notion that individuals must become self-sufficient through work—enabling a disingenuous championing of full employment by Conservative politicians—but does not necessarily lead to significantly lower spending in the short term. However, the valorisation of work occasioned by austerity has helped the government to resurrect the pre-crisis growth model by placing downward pressure on pay and conditions in key growth industries in the services sector.