It’s an
uncomfortable fact for Labour Party supporters and Guardianistas everywhere
that, as Guardian columnist Jonathan Freedland noted last week, ‘on
welfare, the voters are on the Tories’ side’. Which may be the reason why, last
weekend, Labour politicians did something shocking: in a bid to connect with
voters, they actually said something sensible about the welfare state.
According to Sunday’s Observer, ‘detailed work is
underway in the party’s policy review on how to revolutionise the way the
system works and address concerns that it promotes a “something-for-nothing”
culture. One central idea under consideration is the creation of a flexible
payments system offering higher benefits to those who have been employed for
longer and have therefore made more National Insurance contributions.’ It’s
‘about linking what you take out to what you have put in’, according to a
‘senior party source’.
Of course, it is pretty woolly stuff. For
example, Labour’s shadow work and pensions secretary, Liam Byrne, wrote
elsewhere in the Observer that ‘we must do more to strengthen
the old principle of contribution’, but then he could only offer the example of
prioritising social housing for those ‘who work and contribute to their
community’.
Yet while Labour’s proposals currently
lack clarity, the principle of welfare entitlements flowing from a
contributions scheme - something that was at the heart of the original vision
for welfare - makes a good deal more sense than what the state does at the
moment: hand out small amounts of money to people regardless of their work
history.
The contributions idea is very much in
keeping with the early history of the modern welfare state. In his famous
report, published in December 1942, William Beveridge concluded that benefits -
basic rather than generous - should be paid ‘as of right and without means
test’ to everyone who needed them and who had paid the appropriate contributions.
Indeed, it was trade union leaders who were most adamant about having a link
between contributions and benefits. According to the
historian Jose Harris: ‘The TUC [Trades Union Congress] delegation to the Beveridge committee
was in many ways a remarkable embodiment of the traditional sterling virtues of
the labour aristocracy. The delegates were strongly in favour of contributory
insurance: they were contemptuous of “dodgers”, of the “very poor” and of “the
type of person who will not join a Friendly Society”, and to the surprise of
Beveridge and his committee the leaders of the delegation favoured the
withdrawal of public assistance from the wives and children of workers who went
on strike.’
As it happens, the welfare system put in
place by the much-trumpeted 1945 Labour government did not even offer the
fairly spartan scheme proposed by Beveridge. Instead, benefits were still often
subjected to a means test rather than being automatic in times of unemployment,
and contributions were increased.
The current situation is mixed. Pension
provision is based on contributions, though there is a means-tested top-up available
for those on low incomes. Jobseeker’s Allowance for the
unemployed is paid at the same rate whether you have made enough National
Insurance contributions or not, but any savings you have are ignored for the
first six months if you have made contributions. It’s similar with Employment and Support
Allowance (which has replaced Incapacity Benefit)
for those unable to work due to ill health rather than an inability to find a
job. In other words, contributions still have some effect on entitlements, but
not very much.
More importantly in monetary terms, thanks
to the failure of successive governments to build homes, housing benefit is paid
regardless of contributions, so long as you are on a low income or claiming
benefits. Many other benefits are dished out without any connection at all to
contributions. Indeed, it is astonishing how many households receive some kind
of benefit. Long gone is the notion of welfare as a ‘safety net’ for hard
times. As the Observer pointed out:
‘The welfare state is a big part of British family life, with 20.3million families receiving some kind of benefit (64 per cent of all families), about 8.7million of them pensioners. For 9.6 million families, benefits make up more than half of their income (30 per cent of all families), around 5.3million of them pensioners. The number of families receiving benefits will be between one and two million fewer now because of changes to child tax credits that mean some working families who previously got a small amount now get nothing.’
This expansion of state provision over the
years leaves a very large proportion of the population dependent, to one degree
or another, on the state and the whims of politicians. But the notion that all
of this is ‘welfare’ blurs enormous differences in contributions made by
people, in both a financial and social sense. It is one thing for society to
support people in their old age after they have done decades of hard work or
childrearing. It is another thing entirely for the welfare state to create a
sense of entitlement in the young, who may have contributed little or nothing
to society so far, or to mark millions of people as unfit to work and thus
placing them in a situation of dependency that is demeaning and even disabling.
People’s relationships with welfare
benefits - and their attitude to the legitimacy of the welfare system - would
very likely be different if benefits were earned rather than being a handout,
and often a handout that has some social engineering attached. Welfare born of
contributions could help to improve individuals’ sense of social solidarity and
their desire to contribute to the community, since they would recognise that
they are no longer being sustained by the state but rather by themselves, and
others, through a collective system. (Though of course, introducing
contributions to welfare won’t magically fix the problem of social alienation.)
For this reason, we should give Labour some credit for at least rethinking
welfare, and possibly pushing it in the right direction.
No comments:
Post a Comment