The bias towards traditional welfare threatens social justice

Rather than defending existing social security entitlements, politicians need to mobilise public support for a new set of social investment priorities.

Reinforced by the wave of austerity following the financial crisis, a new Policy Network/IPPR report shows that social attitudes to welfare are overwhelmingly biased towards a small ‘c’ ‘conservative’ view of the welfare state – implying protecting higher pension payments, social security entitlements, and public expenditure on healthcare. On the other hand, public support for welfare state policies that are geared towards tackling new social risks – relating to structural changes in labour markets and employability, demography, gender equality and family support that traditional protection systems are poorly equipped to provide – is relatively weak. This is the great dilemma at the heart of the politics of the welfare state, which the present debate about welfare reform in the UK scarcely addresses.

In the ongoing discussion about the future role of the state, defending existing social security entitlements, rather than targeting investment at families and children is the public’s preferred option in many European countries, as new comparative polling data from Britain, France and Denmark highlights. Negative sentiment towards growth-oriented, social investment policies in education, active labour markets and family assistance is occurring at a time when slower growth and productivity are increasing the pace of de-industrialisation among developed economies, to the advantage of the emerging powers. The evidence is that shifting expenditure towards these growth-oriented strategies would help to build human capital and increase the capacity for innovation, while supporting the ‘gender revolution’ in paid work and household labour.

Since 2009, every type of welfare regime, including Germany, Sweden and the UK, has chosen a path of budget consolidation that is leading to severe cuts in social investment as a response to the financial crisis. If we consider the survey data on public attitudes towards the welfare state, it is possible to infer that this is merely a rational response by vote-seeking politicians: it is easier to cut back on "family-friendly" service-oriented aspects of welfare rather than healthcare and pension entitlements, as older citizens are more likely to vote.

This preference for the "traditional" welfare state over growth-oriented social investment policies that enhance equity gives serious cause for concern. Growing inequalities in electoral participation might further entrench the welfare status quo, heightening the risk of intergenerational inequality. Given that electoral participation in advanced democracies is falling quickest amongst the young and least affluent, better off and older votes are able to have a greater influence in the political process. For example, spending cuts in the UK have had a disproportionate effect on the young and poor –two groups that tend to have the lowest voter turnout, while universal benefits for the elderly have been largely untouched.

Indeed, support for the ‘traditional’ welfare state is strongest among the more influential cohort of older voters. In Britain, these voters are most likely to support the NHS (51 to 37 per cent), state pensions (44 to 13 per cent) and policing (36 to 18 per cent) as major public expenditure priorities. Conversely, they are less likely to support increased investment in primary and secondary school education by 16 to 32 per cent, and support cutting back maternity and paternity benefit by 37 to 15 per cent compared to younger voters. 78 per cent of Britons and 80 per cent of French voters believe that social protection for families is already more than sufficient. The diverging support for "traditional" welfare provision and a "social investment state" between young and old voters reflects a political context in which the population in many EU member states is getting older, and voters over 50 are most likely to vote.

Worryingly, the financial crisis seems to be consolidating support for ‘old’ welfare state structures at a time when social investment to tackle ‘new’ social risks is of great importance. Europe’s welfare states should be adapting to conquer new structural challenges, which currently pose a major threat to future equity, growth and social sustainability. The biggest threat to social justice in Europe is not institutional change, but the frozen welfare state landscape, perpetuated by the support of major interest groups that are able to control how welfare states operate. Politicians need to show leadership in order to mobilise public support for a transition to a different model of welfare capitalism based on a new set of social investment priorities, looking ahead to the next decade and beyond.

Patrick Diamond is senior research fellow at Policy Network and co-author with Guy Lodge of European Welfare States after the Crisis: changing public attitudes

Students protest against the abolition of the Educational Maintenance Allowance (EMA) outside Downing Street. Photograph: Getty Images.
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North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry experts imply that job creation in the UK could reflect that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed that only one in seven of the jobs projected in an industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial construction burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that natural gas is an essential part of the UK’s future “energy mix”, which, if produced domestically through fracking, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservatives support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This sentiment was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision and described fracking as a “fantastic opportunity”.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because they will either run out or force us to exceed international emissions treaties: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.