Webb essay winner: Goodbye to all that

The workhouse is gone, but child poverty demands attention.

Over one hundred years ago Beatrice Webb headed the group that published the Minority Report. Webb claimed that the purpose of the report was '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' . The report represented one of the first attempts to determine and tackle the root causes of poverty. Unfortunately Webb's innovative claims went widely ignored at the time of their publication. The majority consensus remained that poverty was due to a weakness of individual character. Webb was a strong believer in the claim that poverty is a result of systemic factors. She believed that if the systemic factors were addressed then poverty could be ended. Time has allowed for major reforms and today Webb's ideas raise some important questions about what constitutes poverty and how it can be measured within the UK.

Modern day measures of poverty tend to focus on the number of people who earn below 60% of the median income. Income is important and should be considered when addressing poverty, however the individual causes and components of poverty deserve a greater appreciation. As a starting point it is worth using the most popular living standards index that exists today. The Human Development Index (HDI) is very well-known mainly due to its simplicity. It exemplifies how any good index should be easy to understand if it is going to be practical. The HDI has many qualities which suggest that Webb would have used it as a poverty index. The use of literacy rates and gross enrolment ratios are good indicators of 'training when young'. Life expectancy from birth is an all-encompassing indicator as it says something about whether there is 'sufficient nourishment', 'treatment when sick' and a 'modest ... livelihood' being provided within a society. Additionally the income index within the HDI acts as an indicator for the 'living wage when able bodied'.

However one problem with the HDI is that it does not take into account the inequalities that may exist within a seemingly well-functioning society. This means that the HDI does a bad job of addressing Webb's point of any national minimum being 'open to all alike, of both sexes and all classes'. A promising alternative is a disaggregated index. A widely cited example of a disaggregated index is the Gender-related Development Index (GDI). However Webb described her beliefs about wages with the phrase, 'Equal Pay for work of Equal Value in Quantity and Quality'. She stated that her main concern was for the 'national minimum' to be open to men and women alike, rather than men and women necessarily earning the same . However Webb did recognise that the phrase 'Equal Pay for Equal Work' had been used in her time to unfairly prohibit women.

If Webb were alive today she would more likely have preferred a disaggregated HDI that calculates different indexes for different income groups in society . Income inequality is arguably the bigger factor affecting UK poverty today as a citizen's disposable income is what has a greater effect on their ability to take part in social activities and buy necessities for daily life. The disaggregated HDI for the lowest quintile income group would therefore be a good poverty index keeping Webb's beliefs at heart. This type of HDI would identify whether a 'national minimum of civilised life' is being achieved in the UK.

On the other hand there is the question as to whether the equal weighting given to life expectancy and GDP per capita by the HDI is reflective of Webb's views. As life expectancy is such an all-encompassing factor it is only fair that it has greater weight placed on it. Not only that but GDP per capita is also the indicator that most suffers from using a disaggregated HDI. This is because GDP growth is simply an increase in output by a nation. If a nation increases its output in weaponry then this will do little to help the living standards of the poorest fifth of the UK . More specific to Webb is the fact that GDP per capita doesn't say anything about the income for the unemployed, the sick and the elderly. Therefore a better indicator is required.

The indicator that should replace GDP per capita should be one that is more appropriate to poverty. Considering Webb's initial desire for the more helpless members of society to be given support she would probably feel heartened by the claim that she needn't worry about the livelihood of the aged. Recent data suggests that this claim is accurate, going so far as to say that it is less likely for pensioners to live in low-income households than non-pensioners . This is of course something that should be monitored regularly to ensure its validity, but at the moment a UK poverty index doesn't have to make as many allowances for the income of elderly citizens. This conclusion may actually be considered an example of Webb's triumph in impacting modern policy as her consideration for the elderly helped to signal the foundations of pension schemes today.

The outlook is not as bright for the ill and the unemployed though; the original victims of the workhouse. In fact long-term unemployment and illness go hand in hand in some parts of the UK. Statistics have suggested that approximately three quarters of working age people who have been receiving out-of-work benefits for two years or more are either sick or disabled . One of the problems with long-term unemployment as a result of a sickness or disability is that it may lead to a vicious circle whereby the person is never able to fully recover due to their time spent away from professional or social activity. Unemployment in itself is not totally deplorable though. In fact short-term unemployment may actually be viewed as an opportunity for people to find better jobs for themselves. For people in this position there is a Job Seekers Allowance ensuring them a 'living wage' at all times.

However it is long-term unemployment that can contribute to poverty and lower living standards. To some extent even Webb appreciated the Majority's sentiment towards poverty when she advocated 'detention colonies...for able-bodied people who refused either work or training' . This suggests that Webb's desire was for sickly or disabled citizens to be preparing themselves for after treatment when they would be able to get back into work. The onset of citizens defrauding benefit services in modern times makes this an issue that needs addressing.

Therefore the indicator replacing GDP per capita is the percentage by which long-term benefit recipients' increases or decreases over the period of one year. To create an indicator for long-term benefit recipients there should be maximum values of increase and decrease specified which can be used appropriately to create a new component of the poverty index. Similar to the way one creates an index with GDP per capita data to compile the HDI. The only difference is that an increase in the number of long-term benefits recipients pushes the index down whereas an increase in GDP per capita pushes the HDI up.

Webb's use of the phrase 'living-wage' is also important here and is embedded within the motivation to reduce long term benefits recipients. The minimum wage exists in order to mark a level of subsistence that is sufficient for all citizens. This means that getting people working means getting people earning, at the very least, the 'living-wage'.

On the other hand Webb specified the importance of treatment for those who are sick. The current index appears to have more of a focus on ensuring people are working rather than actually improving in health. Fortunately this issue is implicitly dealt with in two ways. The first way is through the fact that the UK has a universal healthcare system which means that treatment is accessible for all regardless of income. The second is the realisation that the long-term benefits recipients' indicator indirectly takes into account the quality of healthcare provision in the UK. If the healthcare system was to deteriorate and patient waiting lists grew longer, rendering more citizens incapable of working, then this would contribute to an increase in the number of long-term benefits recipients.

The final, and possibly most important, issue that the index should address is 'sufficient nourishment ... when young'. The UK has seen a vast increase in the level of child poverty over the years and it is suggested that almost a third of all children in the UK are living in poverty . This means that the UK has a proportionally greater number of children in poverty than many other developed countries. The issue is serious enough to be given an individual indicator within any UK poverty index.

However there is a difficulty that arises in indexing child poverty. One might choose to use an indicator that focuses on the number of children in child poverty, or alternatively one could use an indicator that measures a major cause of child poverty. The latter type of indicator seems more appropriate when one considers Webb's tactic of approaching poverty by looking at structural causes.

The difficulty then arises in determining what causes are sufficiently worthy of being measured. There are numerous causes of child poverty within the UK. The main causes are often the same as the causes of most types of poverty; low income possibly caused by unemployment, lack of institutional support and social division. However there are also causes that are unique to child poverty such as higher divorce rates and greater numbers of teen pregnancies. The proposed index already considers long term unemployment and education levels within the UK which goes some way in raising public awareness about some of the main causes of child poverty.

However the final indicator will focus on causes specific to child poverty. To identify these causes within the realm of Webb's thinking the key word that needs to be recognised is 'nourishment'. Nourishment can refer to physical or emotional factors and when taken in a modern day context it refers to a good standard of living for the young. The indicator will therefore focus on factors that inhibit nourishment. The first factor to be included in the child poverty indicator is the number of underage pregnancies that result in actual births. It is being used because, naturally, young mothers find it extremely difficult to nourish their children in the same way as an older, more settled woman would.

The second factor used is the concentration of poor children in the UK. It is sometimes the case that poverty breeds more poverty. In an area with highly concentrated child poverty the poor children only see other poor children; effectively depriving them of social nourishment. Currently half of the children in the UK who are eligible for free school meals are concentrated in a fifth of the schools . The proposed way of indexing this is by using a technique very similar to the one used when calculating the Gini coefficient. A line of absolute equality is formed which is based on all schools having an even proportion of children on free school meals and then the actual data is plotted. The ratio of the areas between these lines can then be used to create a concentration coefficient.

The third and final factor is the number of lone parents within the UK. Recent data suggests that 46% of children in lone parent households are living in poverty whereas within two-parent families the figure is 22% . The number of lone parents and the number of underage pregnancies that result in actual births would both be indexed in similar ways. The percentage increase or decrease each year is expressed as a fraction of some maximum; similar to the way in which the long-term benefit recipients' indicator is indexed.

These four components can be used in an effective way to increase awareness of poverty. The first component is education and looks at gross enrolment ratios and literacy rates. The second component is living standards and uses the indicator of life expectancy. The third component is unemployment and is considered by the number of long-term benefits recipients. The fourth component is child poverty and uses the number of underage pregnancies that result in birth, the number of lone parents in the UK and the concentration of poor children. The four components are all weighted equally. The three indicators for child poverty are also weighted equally within their respective component.

Additionally the components of education and living standards are disaggregated and only focus on the poorest fifth of the UK; stemming from Webb's intention for a national minimum. After all if the index suggests that the UK's poorest citizens are living longer and learning more then the level of prosperity for the whole UK is either at the level suggested by the index or, more likely, even higher. The remaining components of the index are not disaggregated as they are not as directly affected by income.

The issue of poverty can be promoted by this index in the same way as the HDI. The minimum value possible is 0 and the maximum is 1. If the number given by the index increases one year then poverty, as defined by the components that make up the index, has decreased. Politicians hoping to increase the index number could only do so by increasing how long we live for, getting people back into work, improving access to education or tackling the causes of child poverty.

To conclude, this poverty index is designed with Beatrice Webb's initial vision. However it also recognises that she worked at a time when poverty in the UK was of an absolute nature. Her insight into the UK system with the Minority Report helped to recognise that the poverty people were experiencing was structural and it was up to the state to change it. She helped create the ideas that were behind the welfare state and the universal healthcare system. In doing this she achieved the structural change she had intended and it is because of her efforts that the index suggested in this essay is so particular to the UK. Not many countries can boast being a welfare state, having universal healthcare and a minimum wage. If Webb were alive today to compile her own poverty index for the UK she would probably smile at how UK citizens can keep out of the workhouse and not worry about the Poor Laws, that is, before turning her attention to the problems of child poverty and social cohesion.

This article first appeared in the 02 January 2012 issue of the New Statesman, And you thought 2011 was bad ...

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Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

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