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Laurie Penny: The Paradox of the Welfare State

Aversion therapy for the poor.

Centuries ago, when ordinary men and women first began to dream of political suffrage, a radical theory surfaced whereby people without property or assets had as much right to a living as anybody else. Thomas Paine wrote in 1795 that every citizen should expect a minimum income as compensation for the "loss of his or her natural inheritance, by the introduction of the system of landed property." That notion has this week been utterly abandoned by the British administration.

Tomorrow, the Secretary of State for Work and Pensions will announce a new "contract" with the poor. Those receiving the miniscule and dwindling stipend that the government grants anyone without means to support themselves in these straitened times may be required to toil for the state, for free, or face being shoved off benefits.

This isn't just a Tory scheme. James Purnell, who tried to pull the same trick under Labour in 2009, has spoken of a "covert consensus" whereby, with true Vietnam war logic, it has become necessary to destroy the Welfare State in order to save it.

As strategies for tackling poverty go it's not subtle. In fact, it's roughly equivalent to a quack doctor plastering a typhoid sufferer with leeches or cutting a hole in a patient's head to cure a migraine. This trepanation of the welfare system is supposed to "get Britain working" by returning the poor to the "habit" of nine to five labour -- alongside savage cuts to housing benefit and Jobseeker's Allowance that will apparently "incentivise" them towards work that isn't there.

It's the Victorian aversion-therapy theory of poverty. Iain Duncan Smith, along with a sizeable chunk of the press, seems to have convinced himself that forcing low-paid or unpaid citizens to work for nothing or face homelessness and starvation will somehow snap them out of their beastly little "habit" of not having any money. It's a reimagining of poverty as a social disease that can be cured with shock treatment, rather than the inevitable result of years of profit-driven policymaking that have systematically neglected the needy and vulnerable.

The London Evening Standard's Matthew D'Ancona lovingly reports that Duncan Smith believes that work is "bigger than the idea of earning money." I'm sure that for him, with his personal assets of over £1m, work is less about the money than about the satisfaction and status of being one of the most powerful men in the country. For your average call centre or shop worker having to beg the boss every time they need to use the loo, though, paying the bills is precisely what it's about.

We keep being told that relentless work is good for us. The expectation that all people "of working age" should spend 45 hours a week performing pointless tasks in small cubicles for someone else's profit while cramming unpaid housework and childcare into the remaining time is only a very recent function of late capitalism, but conservative myopia would have us believe that this cruel and unusual process is somehow normal. If ordinary people begin to crack under the strain of trying to survive on ever-lower wages in an ever more insecure and debilitating job market, well, they're just not tough enough. They're layabouts and scroungers and they must be made to do more work for less pay to jolly well shake them out of it.

It's about control. It's always about control. When they say that work is good for us, what they mean is that work keeps us in line. Work makes us behave. Work makes us obedient and beaten and isolated and grateful. If that's the new definition of "the national interest", then we need to think harder about what sort of nation Britain is becoming.

How did this happen? How did we start tutting along when government spokespeople decry the fact that people on social security "expect money for nothing," rather than pointing out that this, in fact, is rather the purpose of a welfare state at a time of high unemployment? That the term for the phenomenon whereby people expect money in return for something is, in fact, employment? That if there's caring, cleaning and community work to be done, perhaps the state should be offering the people who do it a real living rather than barely-disguised contempt?

These welfare reforms are the next step in an ideological assault on ordinary workers being deployed by social conservatives of all parties and none who wish to protect the reputation of capital by blaming the financial failings of the rich on the moral failings of the poor. Believe me when I say that I really, truly wish it were going to work.

It's occasionally satisfying to see one's political enemies embark on the mother and father of all cock-ups, but not this time. Not when real lives are at stake. When these reforms inevitably fail, when the welfare system currently providing a rotten bandage for the old infected wounds to British industry, housing, wages and mental health care is finally ripped away, people I love are going to be left bleeding.

I don't want to watch this country become colder, crueller and more savage. I want to believe that Duncan Smith knows what he's doing. Unfortunately, what he is doing is approaching the problem of poverty with the same concerned brutality with which a Victorian doctor might approach a distressed patient: all she needs is a good hard slap and some ice water therapy and she'll pull herself together in no time. It might seem harsh, but a chap's got be cruel to be kind.
 

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.