The Daily Mail describes Mick Philpott as “the vile product of Welfare UK”. For George Osborne, “There is a question for government and society about the welfare state, and the taxpayers who subsidise the welfare state, paying for lifestyles like that.”
The first accusation is that welfare produces the sort of behaviour that Philpott engaged in, most obviously the decision to have a very large family. I reviewed the evidence for the effect of benefits on family size this in an earlier posting. The evidence shows the opposite – there are slightly more large families on benefit than in the wider population, but people who get benefits for longer periods are less likely than others to have further children. In May 2011, there were 1,354,280 families with children in receipt of benefits: 25,980 had five children, 8,780 had six, 3200 had seven, 1080 had eight, 360 had 9, 130 had ten and 50 had 11 or more. Those figures add up to less than 3% of families on benefit. A large family is not itself a sign of dysfunction – my grandmother was one of twelve, large as many families were before the Great War. If there is a problem, it’s a small one – but there is no clear sign here that there is a problem.
The second comment invites us to ask whether people who receive benefits are deserving or undeserving. The only way to decide that is to have a system which checks people’s moral worth, and to do that, we have to ask questions. It’s been obvious for centuries – I mean that literally – that this approach does not, and cannot, work. It does not work because because the vast majority of poor people are not poor because of any moral fault – in the days of the Poor Law, it was because of old age and sickness; because the minority who are undeserving are still in need; because the administration required to make the judgments is insufferable; because there is no way to hold the boundaries fairly; and because the moral judgements poison the system. I don’t want to have to live with a system that is intrusive, presumptuous, expensive and ineffective, even if George Osborne does.
Working in preparation for the budget, I’ve been looking at some stats from the OECD. I was interested to find out to what extent public sector employment could be thought of as a way of protecting the economy, and that led me to the nearest approximation I could find, “Employment in general government and public corporations“. The figures don’t show any clear relationship to economic performance, but I wondered if they might show a different kind of effect. Here is a table tracking the OECD’s listings of public sector employment and child poverty.
||Employment in general government and public corporations
||Poverty among children, %, late 2000s
There are reasons not to trust the figures here – is child poverty in the UK only 13.2%? – and simple statistics can mislead, but a correlation of the two columns comes out on Excel at -0.56, which is unusually high for social data. It does look as though public sector employment and job creation in the public sector are key elements protecting people from poverty.
Several Christian churches have joined together to condemn lies and myths about poverty and welfare dependency. The lies we tell ourselves is an angry, impassioned attack on some of the dominant images of welfare in the press and government statements. I don’t agree with everything in the report – if anything, I think there is even more misinformation than they suppose – but I’m giving the link here for people to decide for themselves.
A paper for the World Bank questions whether green growth policies are good for the poor. Stefan Dercon argues: “High labor intensity, declining shares of agriculture in gross domestic product and employment, migration, and urbanization are essential features of poverty-reducing growth. … trade offs are bound to exist. … the poor should not be asked to pay the price for sustaining growth while greening the planet.”
The argument is not new; it is perhaps more remarkable for its source. In The Future of Socialism, Tony Crosland argued that higher personal consumption – consumption, not just formal economic growth – is fundamental to the living standards of the poor. The policy he advocated was not to achieve maximum growth, or even high growth relative to other countries, but to improve people’s position over time, because that was necessary to achieve greater equality. Later, in Socialism Now, he added a crucial rider: that without growth, redistribution would be impossible. “I do not of course mean that rapid growth will automatically produce a transfer of resources of the kind we want … but I do dogmatically assert that in a democracy low or zero growth excludes the possibility.” Those arguments seem to me to apply with equal force to the developing world; and they raise the question whether it is possible to be pro-green and pro-poor at the same time.
I’ve read some parochial comments about British social policy in the last week. A chapter in the new Routledge Handbook of the Welfare State claims that “In no country did social exclusion become more prominent as a basis for social policy than in Britain.” France, which has led the world in this, developed the concepts of “exclusion” and “insertion”, and restructured their benefit system around them in the 1980s; the European Union treaties, influenced by the French speaking directorates, depend on “combatting exclusion”; the model has now spread to places like Portugal and Brazil. A report from the IEA claims that “Social expenditure in the UK stands at one of the highest levels in the world.” That’s true in one sense – any relatively rich country is likely to spend more through social expenditure than a relatively poor country. More relevantly, the UK is just above the OECD average (24.5% social expenditure, compared to the OECD average of 22.1%). Its expenditure is exceeded by, for example, France, Germany, Austria, Belgium, Denmark, Italy, Portugal and Spain – in other words, by most long-standing EU members.
The heading I’ve put on this entry is admittedly unfair – I couldn’t resist it. The problem with these comparisons isn’t so much that they’re insular, as that they’re looking in the wrong direction. People making policy in Britain tend to focus on the example of other English speaking countries – notably the US and Australia – rather than its European peers, or any review of broader international developments. That’s our loss.
Earlier this week a Conservative MP proposed a ten minute rule bill to issue claimants with smart cards that would stop them from buying unapproved items like alcohol or cigarettes. I ignored this at the time, because it’s hardly worth taking seriously, but this morning it’s reported in the Mail and the Sun that Iain Duncan Smith, the Secretary of State for Work and Pensions, thinks it’s a good idea. He’s quoted as saying: “I’ve been looking at this process to figure out whether it’s feasible, how would it work, how does it match with legal obligations, so we’ve already been examining this”.
He can save the expense, because we already know. The voucher scheme for asylum seekers is “ineffective, inhumane and results in unnecessary suffering.” That comment comes from a detailed report by the Refugee Council. The scheme left people hungry, unable to pay for necessary services, exposed to hostility in shops and looking for ways to subvert the system.
The way vouchers are used and abused is obvious. Anything marketable can be sold. Some traders will pass off some illicit goods like cigarettes as food; people will go to the supermarket with their friends and exchange food for cash or other goods; drug dealers will get their clients to exchange goods for the drugs. Among asylum seekers, 79% reported that they swapped vouchers to buy items they couldn’t otherwise get, and 68% said that they got less than the face value of the voucher as a result. It is hard to imagine that claimants with drug dependencies will demonstrate a higher level of compliance.
Further note, 9th February 2016: A report from Georgia in the USA offers a neat demonstration of the principle that ‘anything marketable can be sold’: the cards are beng traded criminally at a discount. The DWP issued a contract in 2015 to test how such a scheme would work. The answer is: just as you’d expect.
A new report for the Joseph Rowntree Foundation gives a recognisably faithful picture of the situation of workless people in deprived communities. It shows, yet again, that the myth about “three generations who have never worked” is drivel. The researchers searched “doggedly” in areas of high unemployment for anyone to fit the criteria, and there wasn’t anyone. I’m not surprised, because that’s exactly what the previous longitudinal studies, going back to 1950s, have found: see e.g. Atkinson et al (1983) Parents and children, or Kolvin et al (1990) Continuities of deprivation.
An article in today’s Observer argues:
“Make no mistake. The 1% uprating means that for the first time since 1931, the income of the poorest will fall as a deliberate act of government policy.”
That’s only half true. This is the first general cut since 1931, but there have been other, less wide-ranging cuts, and many have been deeper.
The minimum income standards that apply in the UK have never been complete, and they have not been maintained very faithfully. The rates of the system in 1948 were represented as being based on Rowntree’s 1936 standards, but they were actually less, and known to be inadequate at the time. (I have amended this from the first posted draft, in recognition of a comment from John Veit Wilson, whose authoritative study I can’t do justice to here.) In the 1980s, there were changes in the structure of the basic rates, leaving some people markedly worse off – for example, householders under the age of 25. And various provisions have been made for money to be taken off benefits, for example deductions that apply to people who fail to take up work – the suspension of benefits through sanctions is currently affecting very large numbers of people (3 million claimants have had varied length sanctions, and 1.3 million fixed length sanctions, since 2000). There has never been a true national minimum. Perhaps there should be.
A new report from Demos offers a distinctive way of looking at the experience of poverty in Britain. The report identifies fifteen different household types, in three main cohorts or categories: families with children, working age people without children and pensioners. The report is strongest in relation to child poverty, where the statistical material is backed by qualitative descriptions of the circumstances.
It’s a very good, serious report, and it’s convincing in parts. It should certainly make the government hesitate about its recent proposals to “measure” child poverty in much cruder terms. I have two main reservations, however. The first concerns the principle of segmentation, which tends to imply that the categories (several are given jokey names) are predictable and stable. One of the central messages about the dynamics of poverty in other studies has been that poverty is multi-faceted and complex, that people move in and out of different patterns of deprivation, and that there is often a “web” of deprivation where people struggle to redefine their circumstances, only to find that they are trapped by another problem. People’s lives are complex, and attempts to simplify and classify inevitably tend to stereotype.
The second problem lies in the recommendations for policy, some of which are based unavoidably in the characteristics of people who are poor. One has to ask whether the problems considered – low wages, insecure employment, poor pensions – are really something that should be addressed at the level of the individual.
The European Commission has proposed the development of a new fund to give European aid to the ‘most deprived’, mainly homeless people and children in poverty. The money would be directed through Member States or ‘partner organisations’ – that is, through NGOs.
I’ve written in the past about the Commission’s attempts to establish competence by developing programmes that create a precedent (see The principle of subsidiarity and the social policy of the European Community, Journal of European Social Policy, 1991 1(1), pp 3-14; Social policy in a federal Europe, Social Policy and Administration 1996 30(4) 293-304). When the Lingua programme allowed the EU to fund language teaching in schools, the responsible commissioner claimed: “we now have competence in education”. It’s been a long time since the EU did much to pursue that agenda; but if this fund is approved, the EU will have competence in poverty relief.