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

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Commons Confidential: What happened at Tom Watson's birthday party?

Finances, fair and foul – and why Keir Starmer is doing the time warp.

Keir Starmer’s comrades mutter that a London seat is an albatross around the neck of the ambitious shadow Brexit secretary. He has a decent political CV: he was named after Labour’s first MP, Keir Hardie; he has a working-class background; he was the legal champion of the McLibel Two; he had a stint as director of public prosecutions. The knighthood is trickier, which is presumably why he rarely uses the title.

The consensus is that Labour will seek a leader from the north or the Midlands when Islington’s Jeremy Corbyn jumps or is pushed under a bus. Starmer, a highly rated frontbencher, is phlegmatic as he navigates the treacherous Brexit waters. “I keep hoping we wake up and it’s January 2016,” he told a Westminster gathering, “and we can have another run. Don’t we all?” Perhaps not everybody. Labour Remoaners grumble that Corbyn and particularly John McDonnell sound increasingly Brexitastic.

To Tom Watson’s 50th birthday bash at the Rivoli Ballroom in south London, an intact 1950s barrel-vaulted hall generous with the velvet. Ed Balls choreographed the “Gangnam Style” moves, and the Brockley venue hadn’t welcomed so many politicos since Tony Blair’s final Clause IV rally 22 years ago. Corbyn was uninvited, as the boogying deputy leader put the “party” back into the Labour Party. The thirsty guests slurped the free bar, repaying Watson for 30 years of failing to buy a drink.

One of Westminster’s dining rooms was booked for a “Decent Chaps Lunch” by Labour’s Warley warrior, John Spellar. In another room, the Tory peer David Willetts hosted a Christmas reception on behalf of the National Centre for Universities and Business. In mid-January. That’s either very tardy or very, very early.

The Labour Party’s general secretary, Iain McNicol, is a financial maestro, having cleared the £25m debt that the party inherited from the Blair-Brown era. Now I hear that he has squirrelled away a £6m war chest as insurance against Theresa May gambling on an early election. Wisely, the party isn’t relying on Momentum’s fractious footsloggers.

The word in Strangers’ Bar is that the Welsh MP Stephen Kinnock held his own £200-a-head fundraiser in London. Either the financial future of the Aberavon Labour Party is assured, or he fancies a tilt at the top job.

Dry January helped me recall a Labour frontbencher explaining why he never goes into the Commons chamber after a skinful: “I was sitting alongside a colleague clearly refreshed by a liquid lunch. He intervened and made a perfectly sensible point without slurring. Unfortunately, he stood up 20 minutes later and repeated the same point, word for word.”

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era