You can’t reduce poverty without an adequate welfare state

Labour is right to look to boost wages and housing, but international evidence shows that pre-distribution can never be the whole answer.

No one denies that Rachel Reeves, as Labour’s shadow work and pensions secretary, has one of the toughest gigs in town. Fiscally, it seems a Labour government would cap spending on social security. Politically, at a time when highly punitive policies such as the benefit cap attract broad public support, Labour is sensitive to proposing any reform that could be spun as "soft on scroungers". Getting the politics and the economics right will not be easy.

Reeves’s long-awaited speech on social security yesterday was clearly a product of this highly constrained context. Insisting claimants must improve their basic skills looks sensible if implemented fairly, while the focus on contribution is palatable from both the fiscal and political point of view. Given the boundaries within which she operates, Reeves’s decision not to hive off 18-to-24-year-olds from mainstream social security provision and subject them to especial opprobrium has to be commended.

But what did the speech have to offer those of us who see poverty reduction as one of the key functions of a social security system? It’s great to see the political establishment finally recognise that we expect social security to do too much of the heavy lifting in the UK. High housing costs, low levels of parental employment, low and often sporadic wages all require the state to step in and help more than it has to in other developed economies. Without a doubt, addressing these structural determinants would both decrease poverty and drive down the social security bill in one fell swoop.

But international evidence also shows us that pre-distribution can never be the whole answer. The countries we look to as beacons of success - the Nordics, the Netherlands, Germany – still run poverty rates of over 20 per cent before their governments weigh in with taxes and transfers. Unpalatable though it may be, the truth is you can’t reduce poverty without an adequate social security system. 

So where does this leave Reeves and team? In a difficult place for sure. But is it as simple a choice as talk tough or commit political suicide? A public call to remember why we have – and should prize – our social security system is essential and one politicians have long neglected.  It should also be possible to make a case for building a new consensus around the objective of fairness and, crucially, tell us what response Labour can offer to the poorest families, who have borne the brunt of austerity to date. Hard tasks perhaps, but not impossible and they carry the potential to transform the lives of millions. As the evidence shows, without a sustainable settlement on working-age – and especially family – benefits, child poverty looks set to remain an enduring and shameful feature of the British landscape. 

Children play a game of football in front of a residential development in the London borough of Tower Hamlets. Photograph: Getty Images.

Alison Garnham is chief executive of the Child Poverty Action Group

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.