Contribution and compassion – are these the key to Labour’s approach on welfare?

February 27, 2013 9:25 am

There was an interesting piece by James Kirkup in the Telegraph last Friday that didn’t get much attention, but should have, on the possibility of Labour proposing a link between benefit levels and work history. Kirkup’s piece said that:

“Jon Cruddas, the party’s head of policy, is considering a shift in the party’s approach towards what he has called “a fair contributory welfare policy” where people who have worked get higher payments than those who have not.”

My understanding is that this idea is being “actively discussed” at the top of the party, with many of those close to Ed Miliband seeing the value of such an idea. However, rather than this being some sort of “skivers” rhetoric from the party, the arguments in favour of the policy are based around the aim of rebuilding support for the welfare state. A regularly used example is that of a 50 year old who has worked their whole life, and the idea that they should get more support to recognise that, as a way of rebuilding “social solidarity”. This already happens in other countries – for example in France unemployment benefit is based on a percentage of your previous salary over the past 12 months.

However there are legitimate concerns about how this would play out in practice. With youth unemployment nearing one million, anything which cuts back support to hundreds of thousands of young people who are largely out of work due to no fault of their own – forcing them to rely further on existing family support (if they have it) is problematic at best and fundamentally unfair at worst. Such a system might only increase the gap between the baby boomers (who received the full support of the welfare state) and everyone who came after (who are feeling the squeeze, whilst being expected to pay for those who came before).

There are also concerns with regard to how such a system might impact the long-term disabled and carers, who are often unable to work for any significant period of time (if at all). That’s perhaps where the second “c word” of Labour’s new approach to welfare might come in – compassion. Cruddas has railed against “the culture war around the demonisation of the welfare recipient” and said when I interviewed him last year that “we cannot lose our compassion in this process, or we’re dead, as a political party”. In a lecture at the Centre for Social Justice a few months ago, he said:

“We are in danger of becoming a disconnected society, a people who feel a sense of loss and a politics driven by anger and grievance which bleeds away compassion and our shared humanity.”

Nothing better represents the loss of society’s compassion and shared humanity than our approach to the disabled, who are forced to go through demeaning and degrading tests of dubious worth, only to be told that their (often life threatening and restrictive) conditions weren’t serious enough to keep them from work. Society (fuelled by the media and desperate politicians) labelled them “scroungers” – bracketing those who couldn’t work in with those who wouldn’t and failing to make adequate distinction between the two.

Fortunately, Labour’s approach in 2015 and beyond looks like it will be different. Thanks to the work of disability campaigners (Sue Marsh and Kaliya Franklin deserve particular credit), the plight of disabled people and the inadequate help and support they receive is now on the agenda in Westminster. As well as Cruddas choosing to take this piece from Marsh for his recent One Nation pamphlet (a step forward in itself), Liam Byrne has also been making many of the right noises, writing in the New Statesman recently that:

“we need a radically new approach to disability policy so that government actually puts a team behind disabled people helping them get on in life, not a bureaucracy against them locking away help.”

A society that recognises contribution but also shows compassion to those who are unable to work could (and should) be Labour’s approach to welfare in the coming years. It offers a way to rewarding hard work whilst also supporting those who need the welfare state the most (and often have suffered at the hands of it), and gives the party a fighting chance of winning back support for the welfare state without harming those who need its support. But for such an approach to work, youth and long term unemployment will need to be tackled too.

And that’s an even greater task still…

  • http://twitter.com/MJHerbert Michael Herbert

    There is a relentless camapign in the Tory press against people on welfare, people on disability benefits and yet the only person who seems prepared to go onto radio etc and challenge the lies directly is Owen Jones..I hear nothing from Labour spokespersons.

    • Andrew McKay

      It’s all part of the campaign to win over more Daily Mail voters. Labour are in real danger of alienating people in the north of England, Scotland and Wales at the expense of a few people in the south of England. It’s worrying.

  • IanB2

    In London, almost all of the councils that are making the maximum cut (15-20%) to Council Tax Benefit are Labour ones. Indeed at draft proposal stage (before the Gvt offered additional grant to ameliorate the first-year impact) every Labour Borough proposed the maximum hit for benefit recipients, whereas almost all non-Labour Boroughs used other opportunities (such as the ability to reduce or remove discounts for empty homes) to provide some additional support for vulnerable residents.

  • Monkey_Bach

    Here’s the problem with this idea: If you give more to those lucky enough to have been able to contribute the most, unless you are willing to spend more on social security, let alone implement cuts to welfare budget, all that can happen is a regressive redistribution of available funds, from the poorest to better off claimants, by TAKING money previously earmarked to support low contributing citizens to GIVE more generous entitlements to more fortunate, higher contributing citizens.

    Does Labour intend to spend substantially MORE on welfare to avoid this dilemma?

    Or rob from the poor to give to the rich like some Robin Hood in reverse?

    Eeek.

  • John Ruddy

    The issue I see is what about those who have been unable to contribute? That could be through disability or illness, or through lack of opportunity – just look at the levels of youth unemployment. By 2015, there are going to be hundreds of thousands of young people who have been out of work for years – and by that time have little prospect of work, as each year brings thousands more fresh yound job seekers onto the market.

  • http://twitter.com/AndrewFisher79 Andrew Fisher

    Welfare should be based on ‘need’ and therefore a universal right.

    Paternalist concepts of compassion will inevitably lead to the
    scrounger / skiver divide. We don’t ‘give’ people welfare because we’re
    compassionate, they’re entitled to it because they’re in need (just as
    anyone else is entitled when in same situation).

    ‘Contribution’ would be fine if some opted-into extra (like SERPS)
    but saying because you pay higher taxes or have paid them for longer you
    deserve more assigns a misplaced sense of merit to having a higher
    salary. It’s also prejudicial against young people, migrants, and
    disabled people.

    • Amber_Star

      People who have been earning a bit more often have mortgages to pay. You get nothing towards your mortgage, whereas renting is 100% covered in most cases. So, people who have paid in most to the state can often be the ones who face losing their home; they see this as being so crushingly unfair that it politically threatens the social security system altogether.

      • http://twitter.com/AndrewFisher79 Andrew Fisher

        I agree to an extent. However, there are big differences: people who have been earning more generally have higher savings to cushion them; most mortgage lenders will permit a short ‘holiday’ (longer if overpayments have been made); and some with mortgages have insurance to cover such eventualities. The other major difference is that people with mortgages get a valuable asset at the end of it, renters get nothing (often having paid more).

        Surely the way to resolve it though is to – as I believe is Young Labour policy – have the option of converting your mortgage into an assured tenancy (and unlocking any equity). Something I advocated with regard to Northern Rock: http://leap-lrc.blogspot.co.uk/2008/10/northern-rock-and-repossessions.html

      • http://twitter.com/citizen_colin Colin McCulloch

        Not strictly true that you get no help with mortgages – you get help with the interest after 13 weeks on JSA and for up to 2 years,

      • http://godlessfaith.blogspot.com/ Sam Barnett-Cormack

        Rent really isn’t 100% covered, and Support for Mortgage Interest does indeed provide (time-limited) support for mortgage payments.

        Rent is only 100% covered if you are in social housing (which there isn’t enough of) or your rent is at or below the 30th percentile for the size of property you are deemed to need in your area (with area being taken quite widely – district council level, generally).

    • Quiet_Sceptic

      There’s two problems with your argument – resources and democracy.

      Paying welfare necessarily requires others to give up some of their earnings; the right to welfare only exists when there is a matching obligation to contribute and there is no compulsory obligation to contribute. It is not a right that stands alone.

      In a democracy people do have a choice about how much of their earnings they wish to pay in taxes toward things like welfare. You can trumpet rights to welfare all you like but if the electorate don’t support welfare there won’t be the resources made available to pay for it, certainly not for welfare above the barest minimum.

      If you look at the history of the welfare state, look at the Beveridge report, it is a long way away from your idea of welfare as some right granted by the state.

      • http://twitter.com/AndrewFisher79 Andrew Fisher

        “there is no compulsory obligation to contribute”. Er, yes there is: taxation (it’s not optional – even if some of the super-rich and big business are allowed to act like it is).

        The welfare budget can and should be reduced (I argued that on here: http://labourlist.org/2012/06/a-socially-just-welfare-state-would-slash-spending-says-a-lefty/)

        I’ve studied the history of welfare extensively. Beveridge was against means testing and even against the actively seeking work principle (which the Major government restored in 1995 Jobseeker’s Act). As Beveridge says in his report:

        “Unemployment benefit will continue at the same rate
        without means test so long as unemployment lasts”

        What Beveridge and the Labour government that introduced his report were committed to was a policy of full employment. It worked. A welfare state based on ensuring enough jobs can easily afford welfare. Sadly in every year since 1979 unemployment has been higher than in every year before 1979.

        When Labour first initiated the welfare state unemployment benefit was paid at the same rate as the basic state pension – now they’re £71 and £107. If you go back to 1979 then unemployment benefit was worth 21% of average male earnings, today it’s 11%.

        This moralising and paternalistic (at best, punitive and demonising at worst) vision of the welfare state is a recent distortion based on a pernicious individualism. We should not restore Beveridge, but modernise its principles.

        • Quiet_Sceptic

          Er, ultimately tax and spending levels are determined by politicians and if the electorate turn against the welfare state and the parties which support it, they elect politicians that cut spending and welfare. Bit like the situation we’re in at the moment…..

          You haven’t addressed my point that Beveridge was clear that benefits were entitlements in return for contribution, to quote the Beveridge report: “… benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire.” What do you say to that?

          That is very much at odds with your view of benefits as a universal right granted by the state.

          And to extend your incomplete quote “Unemployment benefit will continue at the same rate without means test so long as unemployment lasts”, you omitted “but will normally be subject to a condition of attendance at a work or training centre after a certain period”. Beveridge was a early supporter of workfare!

          • http://godlessfaith.blogspot.com/ Sam Barnett-Cormack

            Politics isn’t just about reflecting public opinion, it’s about shaping it. It’s about engaging in discourse.

            No-one substantial is daring to take a pro-social security stand, so demagoguery drives opinion further and further anti.

          • http://twitter.com/AndrewFisher79 Andrew Fisher

            Yes, the principle was that people will pay national insurance and income tax when in work to have the entitlement / right to support if unable to work through unemployment, illness or disability. As Beveridge said, “It is, first and foremost, a plan of insurance – of giving in return for
            contributions benefits up to subsistence level, as of right and without
            means test”. The insurance was collective not individual – hence ‘social insurance’.

            You misinterpret Beveridge – by that he meant ‘signing on’ or receiving free training, not working for free for six months at Poundland.

  • AlanGiles

    I suppose it depends on what you consider “the right noises” to decide if Byrne has learned anything (other than he’d rather be a Mayor than a shadow minister). Byrne says:

    “so that government actually puts a team behind disabled people helping them get on in life, not a bureaucracy against them locking away help.”

    This sounds suspiciously like me to that little wheeze Alan Johnson had at the time he was at DWP wanting to put Jobcentre staff in GPs waiting rooms to “talk” to unemployed people. In other words, chivvying the unemployed, seperating them from “hard-working” patients (one nation, indeed!). Of course Johnson isn’t the sharpest knife in the box and so he obviously didn’t take into account the fact that for the GPs reception staff to “point out” unemployed patients would have to broken the confidentiality rules.

    In other words we’re back to the “hand up not a hand out” rhetoric of Purnell, stigmatising the disabled and sick and forcing them into employment, even if they are terminally ill, as Freud, Purnell, Brown, Duncan-Smith Grayling and Cameron have allowed ATOS to do.

    As for ” our approach to the disabled, who are forced to go through demeaning and degrading tests of dubious worth, only to be told that their (often life threatening and restrictive) conditions weren’t serious enough to keep them from work” – again Mark, you appear to be in denial like so much of my former party. Remind me who bought in the “Work Capability Assessment” in the first place? (clue: he had a phantom “cleaner”)
    Injustice is injustice regardless of which party is cracking the whip.

    The only right noise Byrne will ever make will be the words ” I resign”

  • MonkeyBot5000

    Whilst I’d like to agree with the other comments with regards to the way it could stigmatise/punish the long term unemployed, it might also make the drones at the job centre a bit more respectful.

    One of the worst things about the job centre is the way the staff look down on you as if your all the same as the drunk who turns up to sign on with a can of Special Brew in hand.

  • http://www.facebook.com/matthew.blott Matthew Blott

    I think this is an excellent idea and is in sync with the spirit of the welfare system as envisaged by the liberal reformers of the late nineteenth and the first half of the twentieth century. A few points:

    1. A problem with a system that is simply based on need is that the poor will always trump everyone and whilst this might seem noble the knock on effect is that the middle class have no investment in a system and are therefore unlikely to support it. Thus you end up with a service for the poor and services for the poor are always poor services.

    2. A sense of fairness is important in any system if it wishes to maintain support. It also makes sense that a middle aged lower middle class man supporting a family gets more than a single childless nineteen year old living with his mum. Say the middle aged man has been earning 40k per year the impact of unemployment will be a much bigger shock and he will also have contributed far more. Some will argue with this but unless we take this approach those than can afford it will go to the private sector (see point 1 above).

    3. I often argue with conservatives about the so-called “undeserving poor”. Whilst the figures are small there no doubt does exist a group unwilling to get off their backside and playing the system. The problem is we’ve allowed a culture to develop – indeed at times it has been actively encouraged – whereby greed is seen as good and everyone should try and get what they can, however they can. So the workshy scrounger with a “bad back” (I know one of these, his back was so bad he went on a golfing holiday) is just the other end of the scale headed by the plutocracy that has been creaming off the proceeds of growth and left the rest of us to scrap for the leftovers for the past thirty years. These proposals might go some way to addressing this problem.

    • Monkey_Bach

      But will people lucky enough to be in work be willing to pay proportionately much more tax and/or national insurance necessary in order to fund a more generous contributory system? If the social security budget isn’t substantially increased through tax receipts more generous entitlements to higher wage earners can only be afforded by large reductions to entitlements given to low or no wage earners deserving or not. I doubt that even David Cameron would be brazen enough or stupid enough to try and sell that to the electorate in 2015. Eeek.

      • http://www.facebook.com/matthew.blott Matthew Blott

        At the moment no. We had taxes by stealth during Labour’s time in government because New Labour were too afraid to make the case for publicly funded services. You have to win people over and I don’t envisage a benefits system any time soon whereby someone losing their job receives 90 per cent of their salary (as I think happens, or used to happen, in Scandinavia). It will be a slow process but a start can be made – think how much along these lines could have been achieved with the three terms of government we had!

        • Monkey_Bach

          It should be interesting to see how Labour flesh out this idea. However, obviously, when you slice up a cake (or welfare budget) if someone gets more someone else has to get less unless the cake (or welfare budget) itself gets bigger. Eeek.

    • http://twitter.com/RichardBrennan Richard

      “It also makes sense that a middle aged lower middle class man supporting
      a family gets more than a single childless nineteen year old living
      with his mum”

      The middle aged man supporting his family would get Child Benefit, council tax benefit and housing benefit, unlike the childless nineteen year old. So he gets more under the current proposals.

  • Domhnaill Barnes

    This is a very interesting debate to be having. If we compare welfare to that other great social institution of ours, the NHS, then it raises a fundamental question about the welfare system that need to be answered before we can move forwards to the inevitable reform of the current system.

    The most basic premise of the NHS is that it is free at the point of use and delivered on need, very few, if any, reasonable people would argue against this principle and similarly I think that very few would suggest that those that use the NHS, however frequently, are scroungers. We as a society accept that some will need to use the service more than others, there are those for whom their only contact with the health service throughout their entire life will be the brief stay whilst they were being born and yet they will quite happily continue paying taxes towards this service their entire life even if they never again step foot inside a hospital. I understand that it would be a very cold hearted person indeed that would deny somebody suffering from cancer the treatment they needed because they had not made a suitable contribution toward the system before calling upon it in their time of need and yet this is the very discussion that takes place with regards to welfare. Would we ever be sat here discussing that a high rate tax payer should get access to better doctors or newer hospitals, no, and this is the same response that should come when we talk about welfare.

    I am not for one second suggesting that the current welfare system is perfect, it patently isn’t, nor am I suggesting that it doesn’t need significant reform, because, again, it patently does, but to suggest that a wealthy individual should receive higher unemployment benefit because they have paid more in taxes is a ridiculous concept. One of the founding principles and most compelling economic arguments for the welfare state is the redistributive nature of the payments. I think there does need to be a better understanding of what we want from a welfare system going forwards and how this will be paid for. We also need to begin to understand why there are people within our society that are deemed to be less deserving of welfare payments than others. We should also remember that when the welfare system was created the principle economic policy of the government was full employment where as now it is low inflation read into that what you will.

  • http://godlessfaith.blogspot.com/ Sam Barnett-Cormack

    I’ve said it before, I’ll say it again, a universal basic income would be a very fair way to do things. Then possibly a state-provided income protection scheme so that people don’t fall all the way back to just that when the lose their job. Contributions-based access to such a scheme, but keep the universal basic income for all. Add extra to the basic income for those who have less ability to enhance their earned income (such as due to ill health).

    How to pay for it? There’s lots of options, but you’d be able to get rid of the NMW and the personal allowance for income tax, as well. I imagine some jobs would see wages go up even then, because you’d have to persuade people based on employment conditions rather than through the socially imposed threat of impoverishment. That wouldn’t go all the way to paying for it, but it would go some way. You’d probably also see a re-alignment of the economy and working patterns – for instance, there really is no need for a general expectation of most people working 38-hour weeks.

    Is this politically plausible? We’ll never know until someone tries.

  • http://twitter.com/AndrewFisher79 Andrew Fisher

    and now on condition you don’t have a spare bedroom either …

    • http://godlessfaith.blogspot.com/ Sam Barnett-Cormack

      Though the bedroom tax only applies to social housing – should you be entitled to one bedroom, say, and find a two bedroom place at or below the 30th percentile (or rather whichever is lower of the current 30th percentile or last year’s 30th percentile adjusted for RPI) for a one bedroom place, your rent will be fully covered.

      Not that many people manage to do that, but some do.

  • http://www.facebook.com/matthew.blott Matthew Blott

    Yes, but he’s also likely to have a mortgage which tends to eat up most of a person’s income – that’s certainly true in my case.

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