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From Big Society to good society

Civil society should not be a substitute for the state but an addition to it.

Rarely in human history can an idea have suffered so much opprobrium as the Big Society. On the left, it is seen as a fig leaf for the cuts. On the right, it has been seen as a fluffy add-on.  The voluntary sector initially flirted with the idea because they saw money in it, but has since rejected it, feeling that it is a way of having to do more with less.  For the Archbishop of Canterbury, it is “waffle”.  Paul Twivy, the founder of the Big Society Network, has admitted that the big society concept is “divisive within the Cabinet” and “loathed by the public”.  Following four re-launches of the policy, it is clear that the Big Society is in trouble.  According to an NfpSynergy survey, only nine per cent of the public believes it will happen. 

Yet, the Big Society is an important idea that speaks to two forces that are central to the human condition: association and participation.  This is clear from David Cameron’s definition of a Big Society given in a speech in Liverpool in July 2010:

The Big Society is about a huge culture change where people in their everyday lives, in their homes, in their neighbourhoods, in their workplace don’t always turn to officials, local authorities or central government for answers to the problems they face but instead feel both free and powerful enough to help themselves and their own communities.

Replace the word “big” with “civil” in that passage, and you have a self-organising society where people associate together and participate in solving problems that matter to them.  Such an approach has a long tradition in the UK, and has powerful antecedents both on the right and the left.  On the right, the Big Society goes back to Edmund Burke, and the idea that liberty depends on conscience and that if people behave themselves, they do not have to be oppressed by the law or governments.  The ideal is that people do things for themselves and that governments should be as limited as possible.

On the left, the idea goes back to the roots of co-operative socialism in which working people organised themselves to develop trade unions and the Labour Party.  Recognising as much, Jon Cruddas, the recently appointed head of Labour's policy review, has argued that his party was wrong to dismiss Cameron's Big Society and that it can learn from the Prime Minister's "pro-social politics".

Much of this organising had roots in the friendly society movement of the 19th century in which people built their own houses, formed burial societies and developed their own savings and loan institutions.  At the turn of the last century, Peter Kropotkin championed “mutual aid”, envisioning a society based on voluntary association between workers free from government.  Written as a counter to Social Darwinism, Kropotkin's book drew on the scientific analysis of animal behaviour, and concluded that co-operation and mutual aid are the most important factors in the evolution of species and the ability to survive.

Mutual aid was the way that communities used to survive hardship.  In “How green was my valley”, Richard Llewellyn describes how people in mining communities in late 19th century Wales supported each other when the going got tough, had a strong moral code based on religion and distrusted the police and the government.  

The coming of the welfare state changed all that – and for the better.  The post war settlement entailed government stepping in to guarantee that all people would have security as a matter of right.  National insurance, free education and health, subsidised housing, and a safety net for all those who needed it, ushered in a new system that would banish the suffering of the 1930s depression forever.  As Nye Bevan said, as he introduced the National Health Service, “the flag day is no way to run a hospital”.  Nowadays, It is hard to appreciate how frightened earlier generations were by the costs of falling ill and how fortunate working class people felt to have access to secondary education and to free milk at school.

But these gains came at a price.  William Beveridge, whose 1942 report designed the welfare state, protested that the implementation of his proposals through state agencies meant that cold bureaucracies would dominate the system.  As early as 1948, he wrote about the “damage” that the welfare state was doing to what people do for themselves.  He suggested that the government should “encourage voluntary action of all kinds” and “remove difficulties in the way of friendly societies and other forms of mutuality”. 

But Beveridge was ignored, and the idea that people should do things for themselves went into decline.  Despite the material advances and rising living standards, the system itself was paternalistic and created dependency.  

From the 1960s onwards, the welfare state came under attack.  This was partly due to the fact that ordinary people had little role in the system except as clients and so felt little ownership of it.  On the left, there was frustration about the size, inflexibility, inaccessibility, impersonality and lack of true accountability of the social security apparatus, and people disliked being clients of an unsympathetic system.  On the right, there was a cruder and more visceral reaction.  People became increasingly unwilling to pay taxes to support social security for those they regarded as “scroungers”.

The response on the left was to try to put ownership back into the system through the idea of “participation”.  Learning from the American War on Poverty, the Skeffington Report from the Committee on Public Participation in Planning (1969) advocated ways in which the public might share and assist the planning preparation process from the earliest stage possible.  Community development, in which local people play a leading part in the issues that affect them, became part of official policy, and the Social Needs Act 1969 set up a means for funding it through the Urban Programme.  These policies were designed to bring ordinary people back into the public domain and to give them a stake in their communities.

The response on the right was different.  Rather than looking for solutions in the community, it sought solutions in the economy. An “enterprise culture” should replace a “dependency culture”.  Policy should favour tax cuts, privatisation of government services, and deregulation of industry and the environment, as well as cuts in government spending.  This would raise the status of business, growth, moneymaking and profit, and reduce wasteful social spending.  The individual, not the community, was the main unit of analysis.  A key text was Charles Murray’s “Losing Ground”.

In the past thirty years, the desire for economic betterment has been the dominant force, and community development failed to gain traction.  Economic growth has led to a massive rise in prosperity for the country with median incomes having increased by 60 per cent in real terms between 1979 and 2010.  The cost has been a growth in inequality such that growth in incomes at the top end of the distribution has been much greater than those at the bottom.  We are increasingly divided not only in wealth, but also in our social attitudes.  Penny Young, who oversaw the 2011 Social Attitudes Survey, commented: “In a time of economic austerity and social unrest, the big question coming out of this year's report is whether we really are in it together, or just in it for ourselves?”

So here’s the rub.  Our civil society is in a mess. The decline in mutual aid that began in the 1940s has continued ever since so that we are now a selfish society in which people generally care little about people outside their friends and immediate family circle, particularly if they are poorer than themselves or different from themselves.  The culture of citizenship has been weakened by the top-down nature of the institutions of the welfare state, where people are classed as clients, and the materialist culture of capitalism, where people are classed as consumers. 

Without a sense of solidarity, it is a short step to conflict and disorder – we need to look no further than Northern Ireland for this, but there are many other examples, including the riots that started in Tottenham last year and spread like wildfire across the country.  There is an urgent need to reweave the fabric of the threads that bind people together.  The Big Society, with its emphasis on the value of citizenship, could be a good way to do this.  We need a sustained commitment to civil society.

This takes us into the practicalities of how to do it, and this is the terrain where the Big Society is weak.  Prime Ministerial edict can’t do it. Governments can’t do it either.  People have to do it themselves.

There are essentially three conditions that need to be fulfilled if this is to happen.  The first is that we have to recognise that ordinary people, including those on low incomes, are competent to run their own affairs.  At present, our thinking is conditioned by two fallacies that E.P. Thompson identified in The Making of the English Working Class some 50 years ago.  One is what he called the "the Fabian orthodoxy”, in which “the great majority of working people are seen as passive victims of laissez faire”.  The other is the “orthodoxy of the empirical economic historians”, in which working people are seen as “a labour force, as migrants, or as the data for statistical series”.  We have to recognise that people have power and agency.

The second condition is that there is significant reallocation of resources to community organisations, rather than professional organisations that act on behalf of people or treat them as clients.  Over the past fifty years, government programmes fostering community involvement have been run by agencies and structures that are impenetrable for local people.  The Neighbourhood Renewal Programme, for example, which ran from 2001 to 2007 and was designed to close the gap between the poorest places and the rest, set up complex partnerships of professional agencies with tokenistic participation of people from the community.  Similarly, much of the voluntary sector contributes little to civil society because it is highly professionalised, possessing few connections to local people other than through the delivery of services.  Resources should instead go to organisations like London Citizens that is composed of citizens themselves and enables them to build their own power. They mobilise thousands of people across religious, ethnic and racial divides. London Citizens thrives in the poorest areas because it works on issues such as the “living wage” that are central to the survival of families in such areas.  We can also learn from international organisations like the Global Fund for Community Foundations, which helps citizens’ groups to build their own asset base so that they can be free from the persistent “projects” demanded by official aid agencies.

The third condition is that it is imperative to develop a new social contract.  It is clear that Big Society, plus austerity, plus cuts to public services does not add up to a good society.  What is needed is a clear agreement on the role of the state and the role of civil society.  Beatrice Webb suggested an “extension ladder” model.  Under this, the role of the state is “to secure a national minimum of civilised life open to all alike, of both sexes and all classes”, by which she meant “sufficient nourishment and training when young, a living wage when able-bodied, treatment when sick, and modest but secure livelihood when disabled or aged”.  Civil society should provide an “extension ladder” that is placed “firmly on the foundation of an enforced minimum” raising standards of life “to finer shades of physical and moral and spiritual perfection”.  On this model, civil society should not substitute for the state but be additional to it. 

These three suggestions would lead to profound ways in the way that society organises itself and get us to a point where we regain our civic pride. The Webb Memorial Trust is working on these issues as part of its “Rethinking Poverty” Programme.  This will investigate what a good society without poverty looks like and how we can get it.  Unlike many studies, it will include the participation of all kinds of people and will not be restricted to the policy elites.

Barry Knight is Principal Adviser to the Webb Memorial Trust.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.