The prime minister obviously likes shooting from the hip, exercising his skills this weekend. As a true heir-to-Blair the weekend press was softened up with the punchlines of the speech he made yesterday.
If good headlines were the aim then the exercise must count as a success. PM to crack down on the under-25s roared out the newspapers. His aim, we are told, is to start building up the next Tory election manifesto.
So here is a warning and an opportunity for Labour.
How should we react now and what should be going into our next election manifesto? The answers to both questions is connected.
Seventy years ago this December, William Beveridge published his great welfare state blueprint. He advocated a welfare state where entitlements were based on contributions. As there would always be some people building up their entitlements and others, because of their particular circumstances, finding themselves to never qualify through an insurance route, Beveridge offered a modest means tested safety net as an add on to his contributory system.
We all know that events did not remain like this.
It was cheaper, in the short run, to push people onto means-testing, as fewer people would be eligible for assistance. The balance between a modest safety net and an insurance-based welfare state was fundamentally changed at that point.
The last Labour government massively increased means-tested assistance by introducing a whole series of working and child tax credits. Not content, this government is going to introduce a universal credit which will make it easier for people to claim means-tested help.
It is difficult to overestimate how significant are the changes between a welfare state based on need and one where access to benefits is by a record of contribution. You mainly get help if you can show that your income is below a certain level. The less you do, the less you earn, the more inactive you are, the greater the welfare payments will be.
Of course, some people cannot help being inactive. But pitted against this group are two others: claimants who have worked for decades and who find, when ready to draw benefit, others who have never worked, drawing usually more than they do.
There is an alternative to the present unfairness. It is for Labour to set itself in a new direction with a 20-year plan to return our welfare state to a system whereby entitlements arise from contribution not from need.
This was the kind of welfare state Mr Blair told me he wished to introduce. But it all ended up with a gigantic increase in the numbers on means-tested welfare. Now politicians turn round to kick those who are in a category of need which politicians have specifically encouraged. Funny old world isn’t it, unless one is receiving a kicking.
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Frank Field is MP for Birkenhead and former minister for welfare reform
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Or we could return to that basic principle “From each according to his abilities and to each according to their needs”. That would represent fairness.
What do you do when some only want to take?
As Frank said:
“…others who have never worked, drawing usually more than they do.”
There will be always some who will cheat the system however it is designed.
The expenses scheme for MP’s was well intentioned but even Labour MP’s could not resist.
I am coming to the conclusion that the GMB will have done Progress a favour if it helps to remind us what we are for?
A few observations based upon experience from both sides of the ‘coin’ :
1. Rewarding contributions works for those who have a healthy run up to older age and steady access to work. Fine. However what of those who are born with disabling conditions which preclude work and require care? what of those who have been in the care system until they are tipped unprepared into the world at 18? what of those who are escaping domestic violence at a young age? what of those who become unemployed or experience repeated unemployment due to recession ? what of those who are injured at work at a relatively young age? The solution is not in the hands of these people – and it would be nothing less than immoral to consign them to the scrapheap of humanity by ignoring our own responsibility.
2. Tax credits (which is what I assume FF calls ‘means tested welfare’ – albeit I have heard him unhelpfully liken them to ‘serfdom’) were introduced to help people stay in low paid work and access that all too essential childcare which is amongst the most expensive in the world – largely due to the cost of premises in the UK. Despite the complexity of the administration model these have proved to be immensely popular amongst the target group and have been instrumental in not only lifting many, many families out of poverty, they have also kept hundreds of thousands of families above the poverty line. There is only one solution to casting these aside and that is an overall increase in wages to at least the living wage. Employees do not set their own salary levels last time I looked. This is particularly important at present as such a high proportion of new jobs are part-time.
3. To describe the new Universal Credit model as easier to claim is to ignore the fact that the overall level of personal funding is likely to be reduced – when UK levels of benefit are already amongst the lowest. How then will the increasingly dispossessed manage to sustain the threads of a life? The more pressure that is put on those who need support the more mental health problems will ensue – putting more pressure on the already pressurised NHS and local authorities.
This is not an economically sound solution. Rather a focus on growth initiatives, local job creation and capacity building coupled with the best public health initiatives we can muster along with a disability assessment model which takes account of real conditions, not a robotised computer tick box which ignores expert medical opinion and leaves a swathe of misery and suffering in its wake.
A kicking? I’ll say.
Point 1: Many need support and should get it, but they too have something to give.
Point 2: Tax credits help, because low wages have to reflect the value created by the work – weighted against the need to balance our books internationally.
4. There are many people outside of those groups you mentioned who might end up in dependency if we don’t get it right.
5. In my own extended family I have witnessed a relative leave assets protected in a trust for grand-children – just in case the state asks for it to pay for support. It’s not all about the poorest.
those in group 1. will all need support but under proposals many will not get it. Some will have something to give yes, but not continually and only with support. Some will never be able to be economically exchangeable due to permanent disabilities and for that reason there is a moral responsibility upon society to support them. Having worked with school leavers with special needs I can assure you that it is difficult to find work for the most able – please do not expect everyone to be able to contribute. Especially in a recession, jobs go to the fittest. Employers are rarely willing to take on disabled workers.
2. low wages do not always equate to the value of work – childcare is an example which is much better paid in other similar countries.
4. ‘dependency’ is unavoidable for some people – due either to low wages, lack of work, long term health reasons. This does not make it wrong. – but rather our social responsibility to support them. I do not count in this group a relatively small cohort who have not worked for generations – largely based in areas where heavy industry once sustained the community and which haven’t been replaced by alternatives.
5. the giving up of a family home to pay for care is something which has been subject to a lot of discussion and is now largely seen as undesirable – particularly if it leaves one relatively healthy spouse without a home. Increasingly, care will be encouraged within the home – but the community health infrastructure needs to be there for this to work.
1a. I don’t think any of us deny the need to help those you speak of. By ‘something to give’ I meant in the wider sense: time, ideas, conversation, support. To have purpose in life is not just about money.
1b. “The less you do, … the greater the welfare payments will be.” If people take that path they lose out in so many other ways. Unfortunately people do choose more for themselves, including the MP’s – as mentioned above by David.
It’s hard to separate those two groups of people we are talking about but they can both contribute in quite different ways.
2. I don’t have a clue on realistic rates for childcare but you can’t just pluck a figure out of the air, whilst avoiding ‘unintended consequences’ on the nation’s financial survival. Yes we have done that for the minimum wage but you can’t do that for every need.
4.Agreed, but there is little opportunity to insert ‘alternative’ employment. Jobs must come from a need that wants satisfying. People can either wait for work to turn up or go find it. I accept that our three lads (17,22,24) have to move away to find work.
5.A spouse should not be affected when care has to be paid for but when descendents choose to let the state pay, instead of the person’s estate, they enrich themselves at the expense of others. If our children care for their mother in later years, assuming I go first, then some of our assets will be left for them. If not, should we expect our poorer neighbours to pay for her care?
What to support to expect from the state and what to expect to give to the state is a hard balance for us all. Nobody wants to pay tax; we all want our ‘expenses’ covered. What is perceived as fair is important.
“From each according to his abilities…” can involve giving in non-monetary ways. Many older, retired, people would love to.
“…and to each according to their needs” might mean satisfying social needs and building self-esteem as a person earns their benefit, but first we have to value them for doing so.
What we want is a richer fairer world, with all its myriad of meanings.
1.a. yes – of course, and this has always happened – however the financial security of folks in this category is not sustained by this alone. For instance, travel costs for the disabled are hugely more expensive than those who are physically able.
1b. if payments are to be measured by capacity to do more – then by that token the fittest get paid the most, whereas the opposite should be true
2. childcare costs vary regionally – largely in line with the relative costs of premises. Investment in childcare – as Gordon Brown/Tony Blair knew and as IPPR have shown – is a fundamental part of the recipe for economic success
3. retirement is of course coming later and later – and increasingly the retired are also seeking to return to work for both financial and stimulating reasons, which is undesirable at a time of an under-supply of work, and when work places are being filled for free under workfare.
4. Volunteering of course is another matter – we have a fantastic charitable heritage which should always be supported – but staffers aside, it doesn’t pay the bills so cannot be the only option.
5. As for paying tax – this is a good thing. I’ve always remind people what would be missing from our lives if tax goes unpaid. Not that I really need to do that any more as it’s becoming increasingly obvious.
Although many groups deserve support, it has to be affordable. In the end, we are forced to compete with other countries.
The main point is: at a time when we can’t spend money without considering it carefully, how do we persuade people to give what they are capable of giving whilst asking others not to take what they don’t need to take?
The welfare state cannot do everything and so we have to find some way to discriminate and ask people to do what ever they can do. How do we do that? We can’t just ignore that question.
thanks for such an interesting discussion John. Your second point above is key. However it does need to be said that a sizable amount of the annual benefits allocation remains unclaimed – which brings us to another key point : education.
Rather than focus on what ‘Joe Public’ thinks as a result of a Daily Mail/Sun diet, a more pro-active stance needs to be taken.
In addition, the language which is adopted is also a crucial factor. Negative descriptions are driving an increasingly unconstructive wedge between social groups – setting the healthy against the disabled, the paid poor against the out of work poor etc in a perception war.
The situation will never be sorted out satisfactorily until the general population are properly educated about use of taxes and the ways in which a proper allocation of benefits actually helps the economy.
Add to that clear initiatives for growth in areas such as Lewisham where there are currently 30 applicants for each post, which will start the re-build for macro growth then we would be moving in the right direction. Childcare funding plays is a crucial part of this – and also a awareness raising with employers re those disabled who are able to work without it having an adverse effect upon their condition. Of course the jobs need to be there in the first place – cutting benefits when there is insufficient work and crucially the cutting of jobs as well as careers advice for young people is ideological insanity.
Despite what the government continually tell us there is funding floating around out there – it’s just not being made available at present due to all those tax loopholes!
Think your assessment is correct Jos. As a party we have not tried to educate the electorate on our values.
Party thinking has always been to focus on the middle ground and to seek to make sufficient compromises to get Liberal and Conservative supporters to think that we are like them.
Also we have tried to work out what swing voters want rather than seeking to build a solid core of support. Indeed the core has been neglected and that has let in the Lib Dems and BNP.
Perhaps we can take the opportunity now to set out clearly what we believe and sell the dream properly.
“…to think that we are like them.”
But we are like them.
I am sure many of them care too, but they think differently about how to make it all work.
“…we have not tried to educate the electorate on our values.”
Our values won’t accepted if they are economically damaging, and counterproductive.
We need innovative strategies to achieve our objectives, ones that are unacceptable to the Tories so they are not snatched from us. For example…
We should accept that benefits need to be earned, but instead of punishing those that won’t work we reward those that will contribute – in which ever way that they can. For the cooperating group their benefit would be payed at a generous hourly rate, in proportion to their responsibilities, and they become free to do other payed work of their own. Since they have earned their benefit there is no conflict with the state. Those not earning their benefit would be breaking the rules if they worked on the side. Additional benefits might be given to the cooperating group, such as giving participants better access to additional work or higher priority on job lists, etc.
The Tories might go for that too, if workable, but we would argue for other innovations around that system – ones we want to add which they wouldn’t. Implementation would create jobs. Participants would be better off.
For sure the Tories would go for this model – because it completely leaves out those who CANNOT find or keep work for the no-fault reasons I have laid out above and they care not one iota for this cohort. What would you have these people do? Wake a magic wand? Perhaps you don’t know anyone in this situation – you should meet a few to find out how this is impacting upon them – as well as the resultant demand on local support services.
How would you expect someone with muscular dystrophy, locked in syndrome or a genetic mitochondrial disease or COPD or a young mother in temp accommodation fleeing domestic violence to ‘contribute’?
Aside from causing increasing destitution to this group, compulsory work for benefits would not promote growth but would encourage the increasing replacement of real paid work with workfare on the cheap – where tasks hitherto paid for at minimum wage (and above) would be rewarded with the princely sum of £69 pw. Work experience of a month or 6 weeks is a different matter and should be encouraged, as long as it is safe and properly managed.
Tackle those areas where unemployment is generationally endemic through local job creation and training schemes as were showing success prior to austerity measures.
The only solution is to create sustainable jobs and – as I have said – to ensure that the sick, disabled and temporarily unemployed are not turned into the nation’s kicking post and the nation’s shame.
Those that cannot work should not be asked to.
The system you fear would indeed be shameful, but What is described above is not compulsory.
I know the difficulties for the young as they try to keep up their hopes whilst looking for work. My eldest son spent a year trying to find work and benefited from state support. He is now on a graduate scheme. He wasn’t required to work during that year but he did a day a week in Oxfam. He benefited from the social contact; he kept reasonable work habits; it made him responsible; it added to his CV; he helped other people.
Outside the groups you are concerned about, there may be many people that would benefit from similar work.
If there are groups of people opting out, should we not encourage them to opt in? If we just ignore them, is that not shameful too?
I fear most for those that lose hope.
Thank you both, and to ‘progress’. It was good to be part of the discussion.
I have just caught the end of The Moral Maze on radio 4. It was fascinating. The download is about 20MB…
What is the welfare state for and who should it serve? With Michael Buerk.
program…
http://www.bbc.co.uk/programmes/b01k29ph
download…
http://www.bbc.co.uk/podcasts/series/moralmaze
I think you will find this invaluable. I am downloading it now.
You’ve made some great arguments there Jos, especially the one on tax. You are obviously a great supporter of various groups.
Forgive me if I sound a bit desperate for solutions.