Goodbye to social cohesion

The Tories’ changes to child benefit rules will do nothing but widen the wealth gap in Britain, pena

Pete was getting a bit sweaty as he flicked through files on his computer. "So . . . there's a couple of jobs here I didn't notice before . . ." "What am I doing here?" I asked again, politely. "It's a targeted review," he muttered, and he swung his computer screen around for me to look at it, then read out the job advert it was showing, in a Very Loud Voice. Every word of it. I studied the points on the end of his shoes; they looked as knackered as Pete did. I let him finish, then tried again. "What am I doing here?" Pete whistled through his teeth and strummed his keyboard.

This was the Jobcentre, and I was signing on. It was a fascinating and depressing experience in humiliation and infantilisation. Over painful weeks, I had been through the "back-to-work session", the "job kit", the "three-step plan". A fortnight earlier, I had had a "review" with Mick, a pleasingly lugubrious chap. "Contain your excitement," he said at one point, "because I shall be issuing you with a blue dot." And, indeed, a little blue paper dot was duly stuck on the front of my attendance booklet.

I pressed Pete again: "I think I went through all this with Mick two weeks ago." "That was a review. This is a targeted review." And the difference is? Pete looked me in the eye at last, exhausted. "I'm still trying to work out how it's different, because I've never done one of these targeted reviews before."

A tax on women

The Jobcentre is an employment scheme in itself (and nothing wrong with that): £2.5m was spent on training Jobcentre personal advisers in 2007-2008, and the next year it was £3.8m. Last year it was £12.6m. The advisers are all very nice, but I rarely saw any of them doing anything that was remotely likely to get anyone back to work. How could they? They were allocated a maximum of six minutes per client (at one point it went down to four minutes), once a fortnight - to check a minimum of six job applications per person. All the system was able to do was shuffle people through with the correct documentation.

The problems with the welfare state are structural; they will not be solved by tinkering, by targets, or even by "targeted reviews". Such huge structural and social change cannot be met by Pete. It's really very simple: look at the figures. From the 1960s onwards, women's increasing education met a rising demand for "service-sector" skills in part-time and temporary jobs - so that female employment suddenly rose sharply. In the UK, for instance, it increased from 43 per cent in 1970 to 66 per cent in 1988, and in Germany from 48 per cent to 62 per cent. Overall, male working-age employment has fallen 20 points in the half-century since the welfare state as we know it was in­troduced; female employment has risen by the same amount.

But these figures mask more subtle differences. First, part-time and temporary jobs are replacing the old "male" jobs for life. Second, it is better-educated women who are taking the new jobs: with the decline in work for less educated males, there has not been a corresponding increase in jobs for less educated females, so the UK has a growing problem of work-poor, or no-work, households. You have to be able to earn a great deal to counter the "tax" on female earnings which is childcare costs.

Usually the right has no answer to this, caught between the twin beliefs that childcare costs are a private concern and unregulated labour markets the best way of spreading prosperity (to whom?). The first belief excludes less educated (and therefore low-earning) women from the labour market; the second attacks the historical shields of less educated men. Result: a growing body of entrenched unemployment in certain social sectors. This is why Margaret Thatcher's claim to have rolled back the frontiers of the state never extended to welfare bills; social expenditure under the Conservatives rose from 16.7 per cent of gross domestic product in 1980 to 20.2 per cent in 1995: in comparable figures, an increase from £99bn to £168bn. Unemployment benefits increased - the costs of "incapacity" quadrupled.

To baby or not to baby

You cannot counter structural economic change, and the social choices of millions and millions of people, with ideology. Given the choice between motherhood or employment, educated women choose to work, hence the declining fertility rates throughout the developed world at the end of the 20th century, before governments stepped in to subsidise childcare costs. For a thorough and readable analysis, I recommend this report from the Organi­sation for Economic Co-operation and Development: bit.ly/amoqfJ (PDF). Countries with higher childcare subsidies for young children today have higher work rates among less educated women.

These giant forces are not going to be affected by the Tory policy of ending child benefit for families in which someone earns more than £43,875, which is ill thought through and unfair: a single mother (or father) earning £43,875 gets hit, but a couple on a joint income of £87,750 could still receive the benefit.

“Swapping" child benefit for the married couple's allowance is even more incoherent: married couples without children will benefit, but women with children, married or not, will lose out. But, like that targeted review, the changes are neither here nor there in terms of the challenge of getting the less educated workforce back on its feet and slowing the emergence of a two-tier society.

What the ending of universal child benefit will do, for a saving of £1bn that could have been cut off the National Health Service instead, is undermine crucial support for the benefits system among families that do work and will now receive nothing from it. The policy will undermine social cohesion at a time when Britain - you, me, Pete - is going to need to show more of it. And that is a dreadful mistake.