Keir Starmer’s vision is lukewarm about principles

In a pamphlet published by the Fabian Society, Keir Starmer lays out a series of policies and priorities.  There are brief – very brief – genuflections in the direction of child and pensioner poverty, though the only policy I can see that is related to either is the fleeting suggestion that there has to be a reduction in poverty-related lack of educational attainment.   On benefits, Starmer offers us only this:

We would replace universal credit and reimagine our social security system to ensure that work pays. We want low-paid people to keep more of the money they earn, so that having enough money to raise a family isn’t the
preserve of the better-off.

Apart from replacing Universal Credit, that looks a lot like some standard Conservative pledges: make work pay and cut taxes.    On the first, there’s a simple problem: making work pay is done by making work pay, not by changing benefit systems.  On the second, while it’s true that low earners have important problems, the central issue is not  money deducted about earnings.  For low earners, the most obvious problems are income security, the costs of housing and child care.  However, most people on benefits are not earners.  They’re pensioners, they’re sick, they’re full-time carers, or they’re unemployed.   Politicians in both major parties have fixated on the relationship of benefits to the labour market; it’s only a small part of what benefits do.

If Starmer’s priorities are not about well-being, or poverty, what are they about?  What he has to say about public services looks like this:

we must face the future. That means a new settlement between government, business and working people. It means completely rethinking where power lies in our country – driving it out of the sclerotic and wasteful parts of a centralized system and into the hands of people and communities across the land. It means banishing the culture that unthinkingly accepts public services not keeping up with the sort of advances we have come to expect in the private sector.

In what respect are our public services inferior to the private sector – apart from funding?  Who thinks our NHS is wasteful – seriously? How can it be acceptable to focus on “government, business and working people” – the corporatism of the 1970s – when a quarter of the population are not part of any of it?    There is nothing in this pamphlet I could relate to disability or the dispossessed.

This is not an argument for Labour’s former regime – I’ve previously commented that the 2017 manifesto  was ‘pretty feeble stuff’ and the 2019 manifesto was mainly reactive.   Labour may not have lost its way completely, but the lack of an agenda for public services, well-being or disadvantage doesn’t help to dispel the impression.

At the risk of being doggedly unfashionable, let me go back to Anthony Crosland in The Future of Socialism. Socialism was, Crosland explained, ‘a set of values, or aspirations, which socialists wish to see embodied in the organisation of society.’  Those values included empowerment, the  progressive removal of disadvantage, and mutual responsibility: the ‘Liberty, Equality and Fraternity’ of the classic left.   Many modern-day socialists would want to add the core principles of democracy and human rights.  The Labour Party is a party of values, or it is nothing.

 

 

A utopian vision of money for everyone

One of the Zoom sessions I went to today was fuelled by optimism about a most unlikely scenario: the idea that the United Nations should provide people around the world with a universal basic income.  The advocates were arguing that the money could be raised to pay everyone $30 a month, and that it should be.   Their position paper can be read here.

I don’t want to dismiss this as a thoroughly bad idea.  In the course of the last 20 years or so, many countries have been introducing cash support for their populations, that support can make a huge difference to people’s lives, and the support doesn’t have to be conditional. The case is well made in a short book by Hanlon and others, Just give money to the poor (2010), and reinforced by the experience of small area provision in India and Kenya.  (These experiences don’t translate well into a case for the same policy in developed countries, where BI proposals are often being developed in terms that will not improve the incomes of many poor people, and may make some worse off.)

Nor do I see the proposal as being intrinsically unaffordable.  It would call for redistribution from richer countries, but that already happens in the form of Oversesas Development Assistance.  Asking the UN to take it on seems like a long shot, but the UN is at least an appropriate forum for discussion: the UN’s Guiding principles on extreme poverty and human rights marks out their interest in the area.

The core problems are somewhat different.  The first question to ask is obvious: is this the greatest priority? People in developing countries need money, but many of them are poorly integrated into any formal economy where the money can best be spent. Other contenders for support might be health care, education, water, and sanitation – all of which are essential to welfare, but probably better delivered without depending on private, commercial markets.-

The second problem is logistic.  How does one distribute money to seven billion people – or even to four billion?  I raised the point on the forum, and the answer came back: mobile money wallets.  For which people need first to have access to electronic devices, and the means of powering them, and local providers need to have the means to process the payments.   It’s not much of an argument to say this has been done in small communities.  Implementation changes with scale.

Advocates for Basic Income are not all utopians, but the curse of Basic Income schemes has been a common failure to think through how things can practically be done, and what the rules should be.  Who gets the money? Do they have to claim? How is the money paid? How are children to be treated? How can we ensure that the money is used by the person it’s intended for? What happens when someone dies?  These are the sort of details that experiments in BI ought to have engaged with and sorted long ago – not all the nonsense about incentives and behaviour change.

Shortages were predicted.

The shortages that have followed Brexit are no surprise; we knew they were coming.

The most basic principle of international trade, ‘comparative advantage’, depends on the idea that people and countries can be better off if they specialise in the things they do best.   The European Union was founded on that basis.   Specialisation also increases mutual dependency, and that is a good thing; it makes war more difficult.  However, it can also have negative consequences.  As countries and regions build on their strengths, there will be a certain amount of disruption – what free market economists like to call ‘creative destruction’.  The European  funds – the Regional Fund and the Social Fund – were designed to compensate and offer some protection to the people and areas which would be displaced as local industries focused more on local strengths, and moved away from those activities where it made more sense for that work to be done somewhere else.

It was clear, for a long time before Britain joined the EU, that a range of Britain’s longest-established industries – coal, textiles and heavy engineering – had largely ceased to be sustainable as competitors entered the field.  When Britain joined the EU, there was further displacement in a wide range of other areas, such as agriculture, car production and electronics.  Conversely, the British economy came to depend increasingly on fields of activity where the UK was relatively successful – areas such as  finance, scientific research, education and culture.

Currently, there are shortages in a wide range of areas.  Some are obvious, and should have been predicted, like the shortages of HGV drivers or agricultural workers; some less so, such as the shortage of phials for medical samples or building materials.  Our expertise in theatre or banking  was never going to be an effective substitute. What was evident from the outset was that there was always going to be a wide range of activities which the British economy no longer had the capacity to do, and would have to import until a home-grown industry could develop – if it ever does, because there are things that can always be done more effectively somewhere else. It’s built in to the nature of international trade.

 

More money for residential care? The system needs reform first.

There’s a debate raging about how to pay more for ‘social care’, but it’s mainly a debate about how to pay for the largest cost, which is the price of residential care.  A year in residential care can easily cost £40-50,000. It’s residential care that is most likely to eat up all a persons’s savings, along with the value of their house.

Unfortunately, the finance of residential care has been based in a deeply exploitative model, and the conduct of a few of the largest providers, while legal, is open to question in terms of the use of funds, the stability of the operation, and the quality of the service provided.  I’d recommend a critical report from 2016 by Burns and others, called Where does the money go?  They explain how a complex series of financial transactions have been used to milk the system of money, and most of it finishes in tax havens.  Operational companies, which actually provide the care, are separated from property companies, which charge them rent.  The operational companies are loaded with debt at excessive rates of interest, paid to finance companies.  Management services are subcontracted to other companies within the group.  And so it goes on.  The authors comment:

Putting more money in to the system via higher weekly payments per bed will not produce a robust and sustainable care home sector when the financialised providers are so adept at taking money out.

 

Work in progress

In the course of the last year, I’ve spent much of my time writing two books.  I have just sent the final copy of the first to Policy Press, who will be publishing it early in 2022. It’s called How to fix the welfare state, and it reviews a series of problems and issues in British social services. It’s a personal take on the welfare state; I had things to say, and thought it was time to say them. Each of the chapters in the book outlines the structure of services, the impact of some false and misleading narratives, and the real problems that need to be addressed. The book outlines where approaches to the services have gone wrong, and makes suggestions about what they need to do to get things right.

I can be reasonably confident that this won’t be my last book, because the second is virtually finished.  It’s a work of general political theory, called, for now at least, Government for the people. It looks at the way the role of governments around the world have changed to take on responsibility for public welfare.

 

‘Shaping future support’: more on the obsession with work-testing people who are ill

The ‘health and disability’ Green Paper, Shaping Future Support, is nominally addressed to benefits for people with disabilities and ‘health conditions’.  It promises a review of three broad areas – ‘enabling independent living’, support into employment and  experience of the services, but in the wash this mainly comes out as a review of two issues, assessment and employment.

On the topic of assessment, the paper has little to offer.  People find the assessments are repetitive and inaccurate; the main responses are ‘triage’ and developing more telephone and video assessments.  On the first point, I defy anyone to develop a triage process that doesn’t lead to people being asked some of the same questions twice – unless, of course, the purpose of the triage is to block some people from going futher. As for inaccuracy, the central problem is that the DWP is still holding to the idea that their assessors can garner more information in an hour than professionals in continuing care can collect over several months.  There will be a problem for as long as the DWP continues to disregard medical evidence.

The other issue, and the issue which gets the most coverage in the Green Paper, is about employment. I apologise for repeating myself, but it stands repetition. Two million people who receive Employment and Support Allowance have been receiving it because they are too sick to work, and it is not reasonable to ask them to.  I can say that with reasonable confidence, because they have been subjected to a government-set assessment that was designed to establish precisely that point.  I am sure that there will be those in government who will say, ‘ah yes, but they are still capable of work-related activity’.  They may be, or may not, but there has been no assessment of that; there should have been, there was going to be some relevant test, but the DWP decided not to introduce one.  At present the only criterion for being deemed capable of work-related activity is an assumption, that by default people who need less support must be capable of such activity.  So they are set to do things like writing a CV and invited to have their confidence built. Just what people with bowel cancer need.

One other point about the Green Paper is worth noting.  Late on, in paras 300-303, it floats, for no obvious reason, the possibility of combining ESA/UC with Personal Independence Payment – despite acknowledging that the criteria for eligibility, and the assessments, are  quite different.   I suspect, but do not know, that this may herald an attempt to restrict disability benefits to people on low incomes.

The government embraces the Equality Act – in a way

While preparing to ease lockdown, the Prime Minister’s office has issued this threat, reported in the Guardian: ‘Businesses that chose to enforce mask-wearing would need to take legal advice on their responsibilities under the Equality Act, Downing Street said.’ It appears that ‘equality’ consists of exposing vulnerable people equally to the kinds of risk otherwise experienced by football supporters and anti-lockdown protests, and firms that decline to do this have to take legal advice to defend their actions.

Unemployment is not about to triple – is it?

I was idly poring through the most recent edition of the DWP’s Benefit Expenditure and Caseload Tables – I know, it’s sad – when I came across this striking sequence of data, in the table headed “Unemployment benefits”.

2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26
Outturn Forecast Forecast Forecast Forecast Forecast Forecast
Expenditure, £m (real terms)
20,119 38,564 41,873 42,680 45,298 50,373 57,990
Caseload, 000s
2,330 4,284 4,509 4,544 4,714 5,192 5,953

By that reckoning, both caseload and expenditure will increase to two and a half times their current level.  There will be nearly six million people unemployed.

There are two possible explanations for this.  One, which I think implausible, is that the government is anticipating a massive and prolonged surge in unemployment as a result of the pandemic and Brexit.  The scenario is not beyond imagination, but I don’t think it at all likely,  even if it was true, that the government would build it into their medium-term forecasts.

The second, which is much more likely, is that the figures represent the anticipated caseload of Universal Credit, currently being counted without any distinction between people who are unemployed and the rest. At the moment, Universal Credit is mainly performing two functions: payments to people who are unemployed, and payments to people on low earnings.  As time goes on, it will also be taking in more and more people on ‘legacy benefits’, and the largest group of people in that category  are nearly two million people currently receiving Employment and Support Allowance. There may well be some people on ESA who are really unemployed, but all of them are  sick or incapacitated.  Bear in mind that the basic, central criterion for receipt of the benefit is that these people are sick, and cannot be expected to work.  That’s not just me saying that. This is the text of the 2012 Welfare Reform Act:

37 Capability for work or work-related activity
(1) For the purposes of this Part a claimant has limited capability for work if—
(a) the claimant’s capability for work is limited by their physical or mental
condition, and
(b) the limitation is such that it is not reasonable to require the claimant to
work.     

Anyone who applies for ESA has to show that they have limited capability for work, tested not (as it once was, and should be) by doctors who know their patients,  but by an elaborate points scheme.  The whole point of providing a long term sickness benefit is to make provision that does not depend on people seeking work.

What the forecasts tell us is that the government currently intends to make no distinction between people who are unemployed and people who cannot reasonably be expected to work.  They will all be counted as receiving unemployment benefits.

The Resolution Foundation proposes a rethink of benefits

The Resolution Foundation has published a short report – they call it a ‘briefing note’ – to consider lessons from the crisis for the system of benefits.  They make several key points, most of which I’d endorse:

  • Earnings-replacement is a critically important role of benefits
  • The current system of sick pay is inadequate, and forces sick people to go to work when they shouldn’t
  • The distinction between employees and self-employed people makes no sense
  • The general level of benefits is too low
  • The safety net needs to reflect housing costs and family size
  • Big reforms will inevitably generate problems
  • There is going to be an increased demand for support for long-term sickness.

I’d depart from their arguments in two ways  First, I don’t think the response of the benefit system, and particularly Universal Credit, has been adequate even within its limited sphere of operation.  Half the applicants have found the process difficult, delays have been marked, it’s full of arbitrary hurdles, and it’s riddled with errors.

Second, the report  seems to me to think of universal benefits, earnings replacement and safety net benefits as being alternatives.  It’s in the nature of cash benefits that they can be combined from different sources, in different ways  – what matters is the final ‘income package’.

Some reflections on ‘ethnic disparities’

The report of the Commission on Race and Ethnic Disparities is a long, dull read, and it’s taken me three goes to force myself to the end of it. They argue:

“Put simply we no longer see a Britain where the system is deliberately rigged against ethnic minorities. The impediments and disparities do exist, they are varied, and ironically very few of them are directly to do with racism.”

Lots of public comment has beaten me to the punch, and I’m not going to try to give an account of everywhere it goes wrong.  There are four key problems with the line they take.  The first, quickly identified by Jonathan Portes, is the extraordinary definition of ‘racism’.

The Commission … proposes the following framework to distinguish between different forms of racial disparity and racism:
1. Explained racial disparities: this term should be used when there are persistent ethnic differential outcomes that can demonstrably be shown to be as a result of other factors such as geography, class or sex.
2. Unexplained racial disparities: persistent differential outcomes for ethnic groups with no conclusive evidence about the causes. This applies to situations where a disparate outcome is identified, but there is no evidence as to what is causing it.

There are only two kinds of racial disparity: those which can be explained by other means, and those where there is no conclusive evidence.

The second point was nailed by Tom Newton-Dunne, who obviously got through the report quicker than I did.  He identifies one early comment as central:  “As our investigations proceeded, we increasingly felt that an unexplored approach to closing disparity gaps was to examine the extent individuals and their communities could help themselves through their own
agency, rather than wait for invisible external forces to assemble to do the job.”  That is the report’s approach in a nutshell – it is only when one moves on to later sections that its importance becomes clear.  As I read through, with growing disbelief, the Commission’s readiness to condone stop and search by the police  – it’s not racist, apparently, but the poor police have become “society’s punching bag” (p.190)  – I had the strong sense that the message to minority groups had become: stop whingeing and behave  yourselves.

The third point rests in the definition of ‘institutional racism’, a term which is

applicable to an institution that is racist or discriminatory processes, policies, attitudes or behaviours in a single institution.

Some discrimination is direct. If people within an organisation are empowered and able to behave in a racist manner, there’s something wrong with the processes that allow them to do that.  The vetting of tenants, GP removal of list patients and adverse selection of job applicants are examples.   And if those processes are permitted to continue despite the evidence that they are working in a racist way, there is clearly an institutional problem.

Some discrimination, however is indirect – a term which exists in our laws, but doesn’t feature in this report at all.  If the system is not ‘deliberately rigged’, they seem to be arguing, it’s not racist.  Some processes can appear to be neutral while repeatedly producing disadvantage.  Processes such as exclusion, stop and search and the operation of the criminal justice system do that.  And that is  waved aside in a report that is determined to locate the source of problems in the action of individuals.

The fourth problem lies in their emphasis on finding ’causes’. If causes are complex, addressing them one by one is not an effective way of changing the pattern. If they are unknown, that’s no excuse for inaction.  The way into a problem is rarely the way out of it.

Lastly, a minor irritation.  This is a personal blog, and it’s hard to pass over a report like this without riding a personal hobby-horse.  Students, we read, “should be taught about all famous and important people in the society” (p.91)  Paupers, peasants, prisoners, soldiers and slaves aren’t typically famous.   I think it would do this country a power of good if students learned less about kings and queens and rather more about the lives of the people who came before them.