Why Labour is right to consider a salary insurance scheme

A welfare system that provides greater support to people when they need it most offers an alternative to the divisive pose bring struck by the coalition.

On Sunday, the Observer reported that Labour are considering an IPPR proposal to establish a system of National Salary Insurance (NSI). This would offer working people who have contributed into the benefits system, but have lost their job, much greater income protection at the point they need it most. The twist on the proposal – which has provoked most reaction – is that to control the costs of the system, the extra money provided would be recouped once people are back in employment.

To clear up one thing straight away: this proposal is in addition to existing entitlements to Jobseeker's Allowance (we do not want to turn JSA into a loan). This means that, contrary to one claim, it wouldn’t mean people who hadn’t worked get more than those who had.

In our original proposal, we suggested that the additional amount available might be £132.50 a week for six months, providing people with £200 a week in total, including their £67.50 in JSA (which has actually now risen to £71.70 a week). These numbers could be altered, but the core rationale is three threefold.

First, for anyone earning much above minimum wage, the benefits system offers very weak protection of their income for short-term, temporary periods of unemployment. For instance, social security provides just 38 per cent of the previous average wage for a single person who also qualifies for help with rent. This compares to an EU average of 58 per cent. For those not eligible for housing support, such as the two-thirds of homeowners, the replacement rate for average earners is just 13 per cent. And it’s not that the private insurance market is filling the gap: a survey published last week by Scottish Widows found that only 5 per cent of people own an income protection policy, which would pay out if they lose their job.

The second rationale for NSI directly flows from the first: the popular legitimacy crisis facing the welfare system is not only about the sense that it pays out too much to people who have not worked, but also that it offers so little protection to those who have. A decade and a half of welfare reform has focused on increasing the conditions attached to the receipt of benefits, but has neglected the erosion of any meaningful reward for the contributions of those who have worked (outside of the state pension). Labour is right to alight on this issue as part of developing a strategic alternative to the populist and divisive pose bring struck by the current government on welfare.

However, the challenge in seeking to improve income protection and rebuild the contributory principle is that it costs money. This is where the third rationale comes in. Deploying the income-contingent loan principle in NSI means that greater security at the point of crisis can be improved without imposing considerable extra net costs. In other words, the social security system would add a new function: smoothing household income to help people to cope with the loss of a wage, keeping them out of the hands of payday lenders and loan sharks, while reclaiming the money once they are back on their feet.

Some have argued that repayment will create a disincentive for people to return to work. Clearly this risk should be monitored on implementation, and the point at which repayments began and the repayment rate could be amended to reduce this concern. But over half of people who claim JSA leave the benefit within three months; 80 per cent after a further three months. Conditionality would continue to apply, so people would be required to take up job offers (or lose access to NSI) and if they hadn’t found employment in six months they would revert to the much lower level of JSA (a strong incentive to find work within that period). Fundamentally, this policy is explicitly aimed at people who have a good work record and so are motivated and job ready.

Critics of this idea have questioned why the extra income protection provided by NSI cannot be attained simply by increasing the level of contributory JSA. The problem of course is where the money would come from (we estimated the upfront cost at somewhere between £1.8bn and £2.6bn, though it is hard to be precise). One option is redistributing money from within the existing social security budget, perhaps by lower disregards or sharper tapers on Universal Credit (or, of course, ending the protection of pensioner benefits). Alternatively, the costs could be met by extra departmental cuts, more borrowing or higher taxes. But it is highly unlikely that any party will cut public services or raise taxes to pay for a higher rate of JSA (especially with £21bn of welfare cuts that some want to see reversed potentially ahead of this in the queue).

Given all this, those of us interested in building up economic protection for working people should probably bank on having to be creative.

A National Salary Insurance system would provide people with £200 a week for six months after they become unemployed. Photograph: Getty Images.

Graeme Cooke is Associate Director at IPPR

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Bertie Carvel's diary: What would the French think about infidelity to Doctor Foster?

The joy of debuting a new series, Rupert Murdoch's squeamishness and a sting in the tail.

According to the adage, the first thing an actor does when he gets a job is to go on holiday. And so, having finished our sold-out run of James Graham’s Ink at the Almeida and with the show (in which I play a young Rupert Murdoch) about to transfer into the West End, I’m packing my bags.

But before I can skip town, I’ve one more professional engagement: the press launch of series two of the BBC drama Doctor Foster, which we finished filming at Christmas. I’ve now seen the final cut of all five episodes, and I’m excited to share it with an audience. There’s no substitute for seeing other people’s reactions at first hand, especially with a show that got people talking so much first time around, and it’s electric to sit in a cinema full of expectant journalists and commentators and feel the room respond. Nothing beats this: to put so much into making a thing and then experience an audience’s unmediated, reflexive reaction. When it goes well, you feel that you’ve shared something, that you’ve all recognised something together about how things are. It’s a unifying feeling. A sort of bond.

Cheating spouses

Handling the interviews has been tricky, when there’s so little one can say without giving the plot away. (The first series began with Suranne Jones’s character Gemma, a GP, suspecting her husband Simon of having an affair.) What’s more, lots of the questions invite moral judgements that I’ve tried my best to avoid; I always think it’s really important not to judge the characters I play from outside, but simply to work out how they feel about themselves, to zero in on their point of view. There’s a sort of moral bloodlust around this show: it’s extraordinary. People seem to want to hear that I’ve been pilloried in the street, or expect me to put distance between myself and my character, to hang him out to dry as a pariah.

While I’m not in the business of defending Simon Foster any more than I’m in the business of attacking him, I am intrigued by this queer mixture of sensationalism and prurience that seems to surface again and again.

Shock horror

Oddly enough, it’s something that comes up in Ink: many people have been surprised to find that, in a story about the re-launch of the Sun newspaper in 1969 as a buccaneering tabloid, it’s the proprietor who considers dropping anchor when the spirit of free enterprise threatens to set his moral compass spinning.

I’ve never given it much thought before, but I suppose that sensationalism relies on a fairly rigid worldview for its oxygen – the SHOCKERS! that scream at us in tabloid headlines are deviations from a conventional idea of the norm. But what’s behind the appetite for this sort of story? Do we tell tales of transgression to reinforce our collective boundaries or to challenge them?

For me there’s a close kinship between good journalism and good drama. I’m reminded of the words of John Galsworthy, who wrote Strife, the play I directed last summer, and who felt that the writer should aim “to set before the public no cut-and-dried codes, but the phenomena of life and character, selected and combined, but not distorted, by the dramatist’s outlook, set down without fear, favour, or prejudice, leaving the public to draw such poor moral as nature may afford”.

So when it comes to promoting the thing we’ve made, I’m faced with a real conundrum: on the one hand I want it to reach a wide audience, and I’m flattered that there’s an appetite to hear about my contribution to the process of making it; but on the other hand I think the really interesting thing about the work is contained in the work itself. I’m always struck, in art galleries, by how much more time people spend reading the notes next to the paintings than looking at the paintings themselves. I’m sure that’s the wrong way around.

Insouciant remake

En route to the airport the next morning I read that Doctor Foster is to be adapted into a new French version. It’s a cliché verging on racism, but I can’t help wondering whether the French will have a different attitude to a story about marital infidelity, and whether the tone of the press coverage will differ. I wonder, too, whether, in the home of Roland Barthes, there is as much space given to artists to talk about what they’ve made – in his 1967 essay, “The Death of the Author”, Barthes wrote that “a text’s unity lies not in its origin but in its destination”.

No stone unturned

Touring the villages of Gigondas, Sablet and Séguret later that evening, I’m struck by the provision of espaces culturels in seemingly every commune, however small. The French certainly give space to the work itself. But I also notice a sign warning of a chat lunatique, so decide to beat a hasty retreat. Arriving at the house where I’m staying, I’ve been told that the key will be under a flowerpot. Lifting each tub in turn, and finally a large flat stone by the door, I find a small scorpion, but no key. I’m writing this at a table less than a yard away so let’s hope there won’t be a sting in this tale.

Ink opens at the Duke of York Theatre, London, on 9 September. More details: almeida.co.uk

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear