The elephant in the room of social security reform

Lots of smart people on the left are thinking about how to create a better social security system – but I’m worried.

Most seem to agree that there’s a lot wrong with Universal Credit (UC). The five-week wait, the benefits cap, the two-child limit, the Work Capability Assessment, the generally low levels of payments – and this is far from a comprehensive list. Labour have committed to ‘scrapping’ UC, and in the next few months, we are going to hear a lot of proposals for overhauling it (the Fabians launched something last week, Resolution Foundation gave some early pointers last month, and nearly every think-tank or pressure group on the left or right is gearing up to say something).

But what worries me is that many seem likely to miss the elephant in the room. They might say, ‘let’s scrap the five-week wait, the benefit cap, the two-child limit, and raise payment levels’ – and stop there. But these policies didn’t come from nowhere. The real question is: what led to these policies? And how do we stop these happening again? And that’s what I want to briefly talk about in this post.

The politics of social security

Put simply, there are two underlying reasons for most of the problems in the UK social security system:

  • Political opportunism: some policies were deliberately introduced by George Osborne to cause political problems for the Labour Party. For example: the benefits cap makes very little sense as a policy per se, but made perfect sense as a political trap.

  • Ignorability: other policies are motivated by other Government aims. Sometimes this is saving money (e.g. the lack of uprating of benefits, which means that benefits become more inadequate with each passing year). Sometimes this comes from a worldview in which harsh treatment will drive people back to work (e.g. for conditionality). Yet if benefit claimants had more political power – either in themselves, or in terms of wider public support – then I don’t think most of these policies would ever have come about.

The temptation for people on the left is to see these attitudes as freestanding – all we need to do make people support a benefits system is talk about it differently! To make the case powerfully, without shame or hesitation; to ‘frame’ our arguments well; and then we can create a more generous system that the British public will be justly proud of.

I just can’t make myself believe that this is true. People on the left keep saying this; as I’ve said a decade ago, Tony Blair’s speech where he pledged to end child poverty began: “Today I want to talk to you about a great challenge: how we make the welfare state popular again.” If we’re going to create a more generous system that lasts, then we’re going to need to make it popular; and if we’re going to make it popular, then we need more than a catchy tagline or targeted spending.

Where does support for social security come from?

At this point, you might be puzzled: public attitudes to the benefits system are much more positive now than they have been in decades. But this isn’t because pro-social security campaigners have magically become more effective (whatever the Frameworks Institute try to claim…). It’s because the benefits system has become much less generous, and – after a short delay – people realise this. This is positive at the moment, but less so in the medium term: if we simply make the existing system more generous, then over time the benefits system will become less and less popular, until there are political gains for cuts. And the cycle will begin again.

We are now at the moment where there is (to some extent) public support for a more generous system – and this is the moment to try to break out of the cycle, to create a system of lasting popularity. But how do we do this?

One of the classic papers in academic Social Policy is about the ‘paradox of redistribution’ – that the more you target benefits on poor people, the less effective you are at reducing poverty and inequality. There’s various reasons for this, some of which are about people leaving the state system (i.e. private pensions), but it’s also because more targeted benefits tend to be more unpopular (see e.g. my explanation of this here).

In short: we need to create a system that isn’t just for the most disadvantaged, but is for everybody. A system that everyone has a stake in. A system that doesn’t by its nature raise questions about whether claimants are truly ‘deserving’, but instead starts different conversations – about how the world of work is letting some people down; about people getting the payments that that their contributions (in a broad sense) entitle them to; and so on.

My sometime collaborators Kate Bell and Declan Gaffney wrote about this nearly a decade ago, in calling for the end of the ‘nothing for something’ benefits system, and the need to bring back the contributory principle to social security. There’s similar mentions of this by the Fabians (more recently here, more comprehensively here) and the Institute for Government/Social Security Advisory Committee. And back in 2012, I wrote about some of the challenges here.

Yet I still often find that I’m in debates about the benefits system where this point is lost. Where those who campaign against poverty argue for an ever-more means-tested, targeted system to help those who are most disadvantaged – ignoring the problems that this stores up for the future.

The questions that remain…

The ‘paradox of redistribution’ presents a beguilingly simple argument – but inevitably, life is more complex than this:

Firstly, it isn’t as simple as saying that ‘targeting is bad, universalism is good’. The ‘paradox of redistribution’ argument has come under attack, with recent overviews suggesting that “the popularity of universal vis-à-vis selective welfare provision remains very much an open question.” As I noted previously, what makes matters more complex is that countries that are thought of as universal (e.g. the Nordic countries) actually look like they’re ‘targeted’ according to some of the common measures that researchers use. It seems clear that excessive means-testing is unlikely to produce popular, generous systems, but we need to know more about the circumstances in which targeting can be popular. I’ll return to this in future posts.

Secondly, political discourse is unpredictable, elusive, and dislikes simple generalisations by researchers – there’s always lots of different things going on. Scottish debates are a great example of this – unlike the rest of the UK, Social Security Scotland has a Charter that talks about ‘dignity, fairness and respect’ for claimants. This is despite sitting in effectively the same social security framework, and indeed, with very similar underlying public attitudes. The difference is in the political culture in Scotland; my guess – though I’d love to hear others’ views – is that this is a legacy of anti-Conservative feeling in Scotland. Whatever the reason, though, I don’t think the Scottish experience shows that legitimacy is freestanding and we can just talk our way into a different world. Instead, it just shows that it’s complicated.

Third, and most importantly, it’s not easy to create a generous, fair, popular contributory benefits system in the UK. This is partly because old contributory systems were based on non-disabled men, so excluded lots of people – a lot of thought needs to be given about how to create inclusive contributory systems (see here and here). It’s partly because British people aren’t used to the idea of earnings-related benefits (this is great but behind a paywall; I’ll write about it soon!). And it’s partly because even fantastic work like the ‘nothing for something’ report don’t quite seem ambitious enough – they end up tinkering at the edges of the current contributory system, rather than changing the fundamental nature of social security.

Crafting a sustainable, popular, progressive social security is not easy. My hope is that all of the smart thinkers on social security start wrestling with these questions of long-term legitimacy, rather than crunching the numbers on short-term poverty alleviation while ignoring the elephant in the room.

2 responses to “The elephant in the room of social security reform”

  1. It’s interesting to know that targeting the lower demographics can actually be less effective in reducing poverty and inequality. I guess social inequality donations organizations should also work on other levels of living. I just hope that the world our future children will live in would be safe and better in the coming years if we invest in this as early as possible.

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