Labour run North Tyneside Council has had to cancel an attempt to introduce voluntary prepaid benefits cards after only two claimants volunteered to take part. The council claimed that the scheme was misrepresented as being aimed at drug and alcohol users.
The council’s attempts to launch the cards predates Iain Duncan Smith’s announcement to the Conservative party conference last month, in which he said:
“I have long believed that where parents have fallen into a damaging spiral – drug or alcohol addiction, even problem debt, or more – we need to find ways to safeguard them – and more importantly, their families, their children, ensuring their basic needs are met.
“That means benefits paid, I always believe, should go to support the wellbeing of their families not to feed their destructive habits.
“To that end, conference, today I can stand here and announce to you that I am going to start testing prepaid cards onto which we will make benefit payments so that the money they receive is spent on the needs of the family, finally helping I believe to break the cycle of poverty for families on the margins.”
In fact, prepayment cards have already been extensively tested on failed asylum seekers, who are obliged to use an Azure card produced by French multinational Sodexo.
Users of the card report that they are treated negatively, that the cards often don’t work and that they are prevented from buying cheaper fruit and vegetables from markets.
One user told the Red Cross:
"You go to [one of the approved retailers] and it's just refused when they swipe it…. So sometimes you can go for a week without food…. If it happens by Friday - at the weekend they are closed. Then you tell them on a Monday that this is what happened, and they tell you it will take three to four days. So already you're half of the week."
So, the claim by North Tyneside deputy mayor that they wanted to give people
“. . . a financial life-line to better managing their finances so they could be more independent in the future and provide them with great choices.’
may be genuine, but it doesn’t seem to reflect what actually happens when you take away people’s right to spend their money as they choose.