A call to arms for Labour on welfare reform

Does Labour want to rebuild the model of the liberal welfare state or try something different?

Today the Welfare Reform Bill returns to the House of Commons to debate the amendments won in the Lords. To mark the occasion, Soundings journal publishes an e-book, Welfare Reform The dread of things to come. It is written by people who have spent years bringing public attention to the impact of welfare reform on the most vulnerable people in society.

Like the 1834 Poor Law Amendment Act, the Labour governments's 2009 Welfare Reform Act was provoked by a moral panic about the feckless poor, and the rising cost of welfare payments. Labour appeared unaware of the squeeze on wages for the bottom half of the working population. Globalisation and the economic boom were not trickling income and wealth down, they were spiralling upward to a small elite. Rising living standards for lower paid families were being sustained only by private borrowing and the growth in women's jobs. The result was growing indebtedness and increasing pressure on individuals and domestic life. Popular resentment toward people on benefits was being stoked by media stories of a dependency culture of welfare cheats. Rising immigration fuelled feelings of unfairness and resentment toward the political class and fed into the clamour against benefit scroungers.

Like the Poor Law, the target of welfare reform was the able-bodied worker who was considered to be shirking his or her duty to work. But Labour and coalition governments excluded the health dimension of the out of work problem. The large number of people living with limiting long term illness and its impact on individuals and their employability was not properly taken into account. It was politically expedient to focus on the supposed moral failings of the individual claimant, and the assumption that, contrary to the evidence, very large numbers were simply avoiding work.

A questionable evidence base and political calculation meant the design of welfare reform was organised around increasing conditionality. The lack of jobs, the inappropriate nature of many jobs for sick or disabled people, the considerable employer resistance to taking on the mentally or physically unwell, were downplayed in favour of a punitive approach to claimants. Like the poor law, welfare reform has ended up punishing the sick and disabled.

In the House of Lords, Labour has succeeded in defeating the government in a series of amendments. But this success masks a problem. Labour peers sprung a litany of amendments but they lacked a shared ideological project about the kind of welfare system they wanted. There was concern for fairness and compassion, a heartfelt fear of the impact on children, and awareness of the spectre of homelessness. But what kind of welfare system does Labour stand for? It seems to boil down to the Conservatives' system but a bit nicer here and there.

Whatever compromises emerge, the larger questions about the future of our welfare state remain. Labour will need to rethink its approach to welfare or risk being sucked into the political slipstream of the Conservatives. It will find itself assenting to measures and then qualifying its assent. It has a political problem because people do not know what it stands for and because it is viewed by many as being soft on welfare. It can never resolve its identity crisis nor sustain longer term popular support by trying to out-nasty the Tories.

By the time the Poor Law came into effect with its workhouses and principle of less eligibility hostility toward the poor had already peaked. Its cruelties and humiliations became notorious and it was met with considerable public resistance. A similar pattern is already emerging around welfare reform and its harsh and humiliating treatment of people who are ill or disabled.

Does Labour want to rebuild the model of the liberal welfare state or try something different? The question needs serious consideration. Beveridge's liberal legacy does not look politically robust today. It is not succeeding in protecting the most vulnerable. It risks being undermined by profit-seeking companies. Its safety net is mean and tattered. Who wants the impoverishment of the Job Seekers Allowance or the humiliation and fear of the Work Capability Assessment? Unlike the NHS, the welfare system lacks public support: in hard times and over longer periods of time, large fractions of the 80 per cent lose their sense of obligation toward paying for the needs of the twenty per cent.

In the coming period of austerity, welfare will be a critical political issue. The challenges of labour market volatility, of the soaring cost of pensions and an aging population, of a tax system in need of redesign, and of restructuring capitalism for wealth creation and jobs, might be better met with a reciprocal, contribution-based system of social insurance which ensures protection and is more politically robust. But it must be one that hard-wires compassion into its structure for those who, through no fault of their own, are unable to contribute. It will involve a massive change, perhaps one that is politically impossible given the liberal traditions of welfare in this country. But the present system is failing and the political prize for changing it would be enduring and historical. The call belongs to Labour, with its traditions of popular mutual aid and reciprocity.

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A year on from the Brexit vote it’s striking how little we know about where it will lead

So many questions, so few answers.

One year one. Anyone who hoped we’d know what Brexit might look like or even, heaven, forbid, that we’d be inhabiting a post-EU UK by now, must be thoroughly disappointed. Even those with more modest expectations are feeling slightly uncomfortable. Because, a year on, we don’t know that much more about what Brexit means  than we did on 23 June last year (well, we know it means Brexit, I suppose).  

We do know some things. First, that divorce talks are preceding trade talks, as the EU insisted – and David Davies denied – all along. Second what the European Union wants in the initial negotiations is crystal clear and indeed on their website, if you’re interested.

Third, the government, for the moment, remains committed to the kind of hard Brexit it has laid out since the Conservative Party conference. Nothing that has been said or done since the election indicates a softening of that position.

That’s it. That’s essentially all we have to show for the last year. This isn’t to say that stuff hasn’t been done. Both the European Commission and the British civil service have been beavering away on the Brexit issue. Papers have been written, careful, detailed analysis carried out. In fact Brexit has dominated the work of Whitehall since the fateful vote.

But for all this work, it’s striking how little we know about where this process will lead. The government’s commitment to a hard Brexit might not survive. Whether it does so or not will depend on what happens with the things we don’t know. The known unknowns, to coin (well, quote) a phrase.

First, we don’t know how long the prime minister will remain in post. This is obviously important, not least given Theresa May herself has seemingly singlehandedly been defining the kind of Brexit Britain should seek. Yet there is more to it than that. A leadership election would take time, and eat up yet more of the two years stipulated by the EU for the Article 50 process. It would also open the rift within the Conservative party over Brexit. Always a good spectator sport. Never a recipe for effective government.

Second, we don’t know how parliament will behave. Much has been made of the "soft Brexit majority" in the Palace of Westminster. But remember last June? When the significant majority of pro-remain MPs were expected to kick up a fight over Brexit? The same MPs who nodded the triggering of article 50 through with hardly a glance? We just do not know yet how MPs will behave.

And their behaviour will be shaped by both inter and intra-party dynamics. Both the large parties are internally divided over Brexit. The Labour leadership seems happy to leave the single market. Many Labour MPs, in contrast, are fundamentally, and publicly, opposed to the idea. Whether loyalty (not least given the prospect of another election) triumphs over opinions on the EU remains to be seen.

As it does for the Tories. I imagine the phrase "do you really want to risk a Corbyn government" will soon trip off the tongue of every government whip. Whether this threat will prove effective is anyone’s guess. Tory Remainers certainly seemed to rein in their criticism of the prime minister following the "chocolate trousers" affair. Maybe this was simply a case of keeping their powder dry until the legislation needed to make Brexit work hits parliament in the autumn. We’re about to find out. And it will matter much more now the Tories have lost their majority.  Indeed, I think this, more than anything else, is why the prime minister called the election in the first place.

One crucial determinant of how MPs behave will be what public opinion does. Regular polling by YouGov since the referendum has, until recently, shown virtually no movement in attitudes towards Brexit. Around 52 per cent think it was a good idea, and around 48 per cent a bad one. Sound familiar? There has in recent weeks been what could best be described as a slight wobble. What we don’t know is what will happen in the weeks to come. Should the polls show a swing away from Brexit, might politicians swing with it, increasing the pressure on the PM to modify and soften her stance?

Turning from Westminster to Whitehall, will a government with no majority adopt a different style to a government with a small one? This matters, particularly when it comes to business. The May Government before the election was notable for the way it put politics above economics, focusing on the need to ‘take back control’ even if this meant the potential for real economic damage. A number of business leaders report getting short shrift when they visited ministers to voice their concerns.

But can a weak government be so dismissive? We know what most businesses want – certainly the kinds of business that get to knock on ministerial doors. They want single market and customs union membership. They want, in other words, a soft Brexit. Chancellor Philip Hammond, it would seem, has been listening to them from the start. Will his colleagues now start to do so too?

And if government policy does start to shift, this in turn will open up a whole host of new unknowns. Most importantly, might the EU be open to some sort of deal whereby we limit free movement but get some kind of single market membership? That discussion has simply not happened, because of the way in which Theresa May closed it off by stipulating a hard Brexit.

Most EU observers think a compromise is unlikely in the extreme. Yet while the EU won’t be more generous to a non-member state than to a member state, there is no reason a non-member state should buy into all of core EU principles entirely, so there might be some room for compromise. Again, we don’t know. And we won’t unless we decide to ask.

So many questions, so few answers. That is the story of Brexit to date. One year on, and those answers are about to get clearer.

Anand Menon is the director of The UK in a Changing Europe. Read their report: EU referendum: one year on to find out more.

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