Renewing the fight against poverty

18 January 2010

The graph on the front cover of our new book ‘The Solidarity Society’ presents a stark challenge for campaigners who want to see the Labour government deepen its attack on poverty and inequality. Even as the effective value of unemployment benefit has plummeted (since the link with earnings was broken), the number of people thinking it is ‘too high and discourages work’ has gone up and up. Public support for redistribution held up during the 1980s, whilst under attack from Thatcher, yet has fallen sharply over the last decade. This is now a significant barrier to further progress in reducing poverty.

So what should be done? The book tries to take the long view of poverty prevention – examining poverty trends over the century since Beatrice Webb’s famous 1909 Minority Report to the Poor Law Commission began the public arguments which led to the Beveridge welfare settlement – and sets out a long-term strategy for designing welfare policies that can both tackle poverty and be politically popular.

We found a strong case for universalism in welfare. As we recently set out in a letter to David Cameron, this presents an important challenge to the Right, which has discovered the theme of social justice but remains strongly committed to cutting expenditure by targeting welfare on the poorest. The evidence is that narrow targeting creates a sense of ‘them’ and ‘us’ that makes us much less willing to contribute to the collective pot.

Of equal importance, however, is the idea that a new welfare contract must once again be based on reciprocity rather than need alone – and this may be more of a challenge to many on the left. We propose a new system of ‘participatory benefits’, where entitlement would be earned explicitly through participation in socially useful activities, whether work, caring, jobsearch, training, or voluntary community work.

This might sound a subtle change, but the effect could be transformative. Take single parents. It is a scandal that single parents fulfilling their responsibilities to care for their children have had to rely on a need-based benefit (income support). No wonder single parent welfare gets a bad press. Yet our focus groups found that people viewed single parents much more sympathetically when they were presented in the context of their family caring responsibilities. So we should give single parents financial support explicitly in return for discharging their caring duties (and not migrate them onto Jobseeker’s Allowance, as the Government is currently proposing to do).

Importantly, incorporating public intuitions about fairness and reciprocity would then enable benefit levels to be increased in a way that is currently politically difficult. We propose a significant increase for all those actively participating in society – high enough to keep households out of poverty.

Demanding that welfare is conditional on participation certainly challenges a pure ‘welfare rights’ approach (though, interestingly, none of the supposed progenitors of welfare rights – including Beveridge and T.H. Marshall – actually believed in unconditional welfare).

But our recommendations also challenge New Labour’s approach to welfare over the last decade. Certainly, many of Labour’s policy reforms – including increased conditionality and support – have been right in principle and effective in tackling poverty. But, sadly, while these policy reforms could have been used to build greater confidence in the welfare system, they have been accompanied by a narrative that has actively undermined confidence. Whilst benefit fraud has been more than halved under Labour, the Government’s ‘get-tough’ language has caused anxiety about fraud to sky-rocket (with 84% now thinking that ‘large numbers falsely claim benefits’).

Only a new system, underpinned by a positive welfare contract, can begin to re-build public support. Labour badly needs to tell a new story about welfare.

Tim Horton is Research Director of the Fabian Society.

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