Category: Social Policy

This occasional blog discusses issues in Social Policy.

An OECD economist argues that Universal Credit is better than Basic Income

I was surprised to read a report from the Helsinki Times, that the OECD is recommending Finland to forget about Basic Income and adopt Universal Credit instead.  It took me a little while to find the source; it’s in a blog post written by Jon Kristian Pareliussen.  He  had previously expressed his appreciation for Universal Credit in a paper written in 2013, when the system was still imaginary rather than practical.  Even at that time, the idea that work incentives would be preserved by a marginal rate of deduction of possibly three-quarters – that’s the combined effect of tax or NI plus the loss of  UC – was fantasy.

The OECD’s opposition of Basic Income has a rather stronger foundation.   Last year’s report on Basic Income explained that in each of the countries they looked at, schemes for a Basic Income were likely to leave many poor people worse off.  What Basic Income wouldn’t do is to undermine work incentives, because there is no added marginal rate of deduction.


The IMF takes steps to scupper universal benefits

A  report from Stephen Kidd about Mongolia and Kyrgyzstan tells us that the IMF have been forcing governments to limit the scope of universal benefits for children.  At a time when the evidence for universal programmes in less developed countries has rarely been stronger – see, for example, S Davala, R Jhabvala, G Standing, S Mehta, 2015, Basic Income –  this is deeply depressing.

I discuss the issues about targeting briefly on my social policy website.  If “targeting” means that there’s a choice of group (for example, payments to pensioners or nursing mothers), it can work.  Targeting “the poor” is much vaguer and more difficult to do effectively.  The process is complex and hard to do with any precision; some favoured methods, such as geographical selection, really don’t work well.  A report by Australian Aid,  Targeting the poorest, found that for poor people the process could seemed bizarrely random, with outcomes that they attributed to luck or divine judgment.  The evidence suggests that selectivity is rather more effective at stopping people from getting benefits than it is at getting them to the people who need them most.  By contrast, universal benefits work.  Arguing to scrap benefits that work and replace them with rules that don’t makes very little sense.

My role as a straw man: no, I don’t think that poverty is the fault of the poor

There are times when I wonder what is the point of writing academic arguments – it doesn’t seem to matter what you say, because people will just make it up anyway.  In the course of the last year,   I’ve commented on a couple of references which have set me up with positions I don’t hold.  Today I’ve come across a paper written for a conference in Indonesia which says this:

Paul Spicker argues that poverty is an individual issue caused by the weakness and choice of the individual concerned. Poverty will disappear if market power is expanded to the maximum and  economic growth is driven to the highest possible level.

For the avoidance of doubt, I do not hold this position, and I have never held it.  I cannot imagine why anyone who has read what I do write should suppose that I might think this way.


Tunisia’s social security scheme expands

Tunisia is reported to be improving its social security system. They’ve aimed to offer a stable minimum income, comprehensive coverage and provision for decent housing.  The amounts being offered are not large: an increase from 70 dinars a month (less than $29) to 150 dinars earlier this year and now 180 dinars (a bit under $74), a little extra (10 dinars) for each child in school, a fund for loans to house buyers, and exemption from fees for medical care (but I don’t know enough to say how that is actually going to work).   The national GDP per capita now seems to be in the region of $10,800 (USD), so the benefits are not likely to be enough to live on.   Having said that, the commitment to extended  coverage is a big deal: Tunisia has previously been reported as having something on the region of 80% coverage, and the people not covered before included agricultural workers, domestic servants and unemployed people.

The extension of coverage in low to middle income countries in recent years has been remarkable.  In a recent lecture, Minouche Shafik of LSE pointed to the rapid growth of a range of welfare measures across the developing world – more than 80 have social security pensions, more than 120 have some unconditional cash transfers.  Around the world, she argues, the “state” is coming to mean a “welfare state”.


Time to turn back the clock?

Last week, I offered a list of truly awful policies, most of which were rolled out after the responsible politicians had been confronted with evidence that they didn’t work but went ahead anyway.  I thought I’d follow it up with a list of social policies which worked, more or less, before governments decided to scrap them.  It’s all part of the Great British tradition: find out what works and put a stop to it.

Hospital social work.  Social workers were in hospitals for more than a century, first as “almoners”, then as medical social workers.  It’s nearly forty years since I saw the work up close while on placement; alright, there was some bad practice, but there was good practice too.   They weren’t always able to clear people out of hospitals, because it’s not possible to conjure residential placements out of thin air, but they were there for the patients and for the medical team.    We seem to imagine nowadays that the way to bring social care and medicine closer together is to have a joint committee.   If we’re serious about integrating health and social care, this is the way to go.

Mobility Allowance.   Between 1975 and 1992/3, we had two main benefits: Attendance Allowance for severe disability, and Mobility Allowance for impaired mobility.  Then mobility allowance was combined with Attendance Allowance to form Disability Living Allowance, and then DLA was translated into PIP.  Now we have three sets of rules for mobility support – DLA for those under 16, PIP or DLA for 16-64, and DLA extensions versus nothing for those 65 and over.  It’s unfair, it makes no sense, takeup is rotten and from DWP it seems that lots of the people who do apply don’t know what they’re applying for but think they may as well have a crack at it.  Bringing back Mobility Allowance would make it possible for one part of the system, at least, to apply consistent rules and make sense.

Special case officers.  After the reforms of the 1980s, the Department of Health and Social Security – later the Department of Social Security, now the DWP – put people in local offices with the remit to deal personally with the complex, difficult and sensitive cases that came their way.   There’s an argument, of course, for dealing with everyone’s circumstances by nominating an officer for  personal contact, but at the least it should be possible  to invest social security officers with a degree of professional powers and respect.

General needs housing subsidies.  Although the intention to get rid of subsidies was first expressed in the 1970s, it took decades for governments gradually to abandon housing subsidies and put the money into Housing Benefit instead.  The only way to replenish our housing stock is to put money into it.

Universal Child Benefit.  Child Benefit was always one of the simplest benefits, with the best takeup in the system.  The principle was breached by the decision to exclude higher rate taxpayers, leading to confusion, uncertainty and millions of forms.  If we want higher rate taxpayers to receive less, don’t introduce new, complicated tests: just tax them more.

Professional probation officers.  Probation officers used to be social workers – in Scotland, they still are.  Then the government in England decided that a private firms could do the job of supervising offenders just as well.  We’ve just been hearing this week about some of the practices:  “supervision” over the phone and failure to breach offenders amongst them.  This is symptomatic of a wider problem (Economics 101 stuff).  Private firms work by making choices; choices imply decisions about what to do and what not to do; decisions not to things involve risks; rational decision makers work to the percentages.   If we don’t want services delivered by the numbers, we need professionals.

We could bring any of these policies back; some are expensive, some less so.  Unfortunately, that implies that we might have to learn something from experience, and the main thing we learn from the lessons of experience is that many politicians aren’t interested in the lessons of experience.

Is housebuilding “at record levels”?

I was puzzled to receive a note from Full Fact, the fact-checking organisation, that seemed to accept Theresa May’s claim that housebuilding was at “record” levels.  Her specific claim was that with a net gain of 217,000 units, more properties had been added to the English housing stock than at any other time in the last thirty years, apart from one year.  That may be true, but it’s a funny sort of “record”.  The second-best result during a period of deeply inadequate policy is hardly something to crow about – a bit like celebrating April’s higher rainfall in the Sahara.  August in the Sahara is wetter than April anyway, but it’s still a desert.

Housebuilding figures used to figure regularly in Social Trends; I’ve taken this figure, showing GB figures, from the 2000 edition.  Between 1950 and 1979, the average number of net additions to the housing stock in the UK were never less than 230,000, and at the highest point (1960-69) the average was 259,000.  This was at a time when both population and household numbers were significantly lower: the old measure, the number of units added per 1000 persons in the population, fell starkly after the 1970s.  It also makes a difference where the properties are – we long ago gave up moving work to where people actually lived.

The numbers matter.  If there are not enough houses, then people just have to live where they can, including property that is unfit or managing in someone else’s household.  Usually in a market the people who get left out in the competition for resources are the ones who are least able to pay, but housing doesn’t work as a pure market – people in prior occupation get to keep out people who don’t yet have what they need.   Ultimately, however, it’s a matter of maths: if there are more households than houses, someone, somewhere has got to be homeless.

Progress on the Social Security Bill

The  Social Security Committee’s first stage  report on the Social Security Bill says a lot of the right things about the draft:

  • the status of the principles needs to be clarified
  • the balance between the framework and secondary legislation needs to be redressed
  • there has to be a mechanism to review regulations – the committee recommends an independent Scottish Social Security Advisory Committee.

They have an accessible summary here.

Additional note, 15th December:  The Scottish Government’s Response has also been published; in general, the response seems to be made of warm words rather than a commitment to do anything differently.

Soviet Russia was not kind to benefits claimants

At a session about social security yesterday, one of the speakers invited us to celebrate the inspirational anniversary of the  Russian Revolution.  As someone mainly concerned with security rights and dignity in social security, there’s some incongruity in that request.   Soviet Russia was not wholeheartedly supportive of people who needed benefits to survive.  The laws against “parasites, tramps and beggars” varied between the different republics of the Soviet Union, but they included penal policies and fora for public humiliation. There are three articles about it by Beerman in the journal Soviet Studies:  “A discussion on the draft law against parasites, tramps and beggars”, 1958, 9(2), 214-222; “The law against parasites, tramps and beggars”,  1960 11(4), 453-455, and “The parasites law”,  1961, 13(2), 191-205.  No doubt a similar law would go down well with certain sections of the UK press, but it’s not a model to be followed.

A session in Haifa

I’ve been in Israel for the last couple of weeks, and yesterday I gave a presentation on the relational elements of poverty to a delightful group of academics, students and practitioners at the University of Haifa.    I’m shamefully incompetent when it comes to managing Hebrew at even the most basic level, but fortunately most of the academics I’ve met in my field don’t share my limitations.  They are being driven to publish academic journal articles in English in order to get tenure (15 articles in 5 years is apparently the norm, and book chapters and Hebrew articles don’t count).  The problem with that sort of direction in academic writing is that it tends to shape the character of the work that academics can engage in, and it’s not always to the benefit of the subject.  Good theoretical work needs time and variation; critical development that might influence policy in practice might tend to be repetitive.  Empirical research, by contrast, can often be divided up into meaty chunks and written up quickly, so that’s what people on the treadmill will be forced to do.

I’m a firm believer in a cooperative approach to academic discussion; I have been asked to think about making my work more accessible in Hebrew.  My work has previously appeared in Farsi and Arabic, and it’s intriguing that the same elements and approach seem to appeal across such different (and apparently divided) cultures.  We can only gain from dialogue and exchange, and it’s regrettable that some of my contemporaries have closed the door on that.

A report on Universal Basic Services

The Institute for Global Prosperity has produced a report proposing the introduction of a range of universal basic services.  The principle is the same as the principle of the National Health Service, education in schools, or the road network: providing universal services would offer a foundation for everyone in the society.  The fields in which they are proposing basic services are shelter, food, transport and “information”, which includes phone, television and the internet.

The schemes are not all worked out in the same way.  The proposals that would be genuinely universal are for public transport (extending the equivalent of pensioners’ bus passes to everyone) and communications.  The food service they propose is essentially a residual network for poorer families, replacing food banks and soup kitchens; the model for housing is an extension of existing social housing stock.  Neither would be universal.

They also compare the costs of their scheme with Universal Basic Income.   It’s not a completely fair comparison, because the provision they are proposing for housing and food is not provision for everyone; if they were genuinely offering either of those on a universal basis, the costings would look a lot different.  It is fair, however, to remind people of the alternative to Universal Basic Income.  People need an income so as to buy goods and services on the private market; it may be possible to take those services out of the market altogether.

Both the universal schemes they propose, and the underlying arguments, are interesting and thought-provoking.  I’m persuaded by the ideas of the universal bus pass and a universal infrastructure for the internet; I think others may need more work; but it’s a debate that’s well worth engaging in.