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8 April 2020updated 30 Aug 2021 1:09pm

How the coronavirus crisis has renewed the case for the welfare state

Rather than a burden, the welfare system is a form of collective insurance against life’s hazards.

By George Eaton

The NHS, former Conservative chancellor Nigel Lawson once observed, is “the closest thing the English have to a religion”. As the nation’s people congregate each Thursday at 8pm to hymn the health service, this description has rarely felt more apt. After the longest period of austerity in its history, the NHS is once more promised “whatever it needs”. Prussia was described as an army with a state; the UK currently resembles a health service with a state. 

The coronavirus pandemic is both a health crisis and an economic one; the NHS has borne the former, the wider welfare state is enduring the latter. Between 16 and 31 March, 950,000 people successfully applied for Universal Credit – ten times the usual fortnightly average. While successful applicants must still wait at least five weeks for their first payment, the government has increased the standard UC allowance by £1,000 a year (a further £80 a month), raising benefits to their highest ever real-terms level. Until recently, unemployment benefit was worth no more than it was in the early 1990s, despite the economy having grown by 75 per cent since then.

For decades, the political imperative has been to curb welfare spending. Those who had the temerity to claim benefits were depicted as “scroungers” (not “strivers”), “shirkers” (not “workers”), and “takers” (not “makers”). In his 2012 Conservative conference speech the then chancellor George Osborne declared: “Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits?” That the overwhelming majority of claimants had previously worked, or would soon work again, was apparently of no relevance.

Such rhetoric was accompanied by punitive measures: working-age benefit increases (including for those in employment) were frozen so that payments no longer rose in line with the cost of living; total benefit payments were capped at £20,000 (or £23,000 in London), regardless of household size or need; tax credits were limited to a maximum of two children; and claimants were routinely declared “fit for work” when they patently were not (2,380 people died between December 2011 and February 2014 after passing work capability assessments). 

The political condemnation of those who made use of the welfare state was successful in altering public perception. A 2013 study by Ipsos MORI found that people believed £24 out of every £100 spent on benefits was claimed fraudulently, a figure 34 times higher than the official estimate of 70p per £100. Nearly 30 per cent of people thought the state spent more on Jobseeker’s Allowance than on pensions when, in reality, 15 times more was spent on pensions. 

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Mindful of such perceptions, Labour frequently echoed Conservative rhetoric and accepted welfare cuts. The party’s 2015 manifesto promised to maintain the household benefit cap, and to limit child benefit rises to 1 per cent for two years. Even Labour’s celebrated 2017 manifesto suggested the party would proceed with £7bn of the Conservatives’ planned £9bn welfare cuts. 

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But as has now become clear, an adequate social security system is not merely optional but essential. It should not have taken the UK’s gravest crisis since the Second World War for this truth to be reaffirmed. The welfare state has never been a burden on economic growth; rather it is a form of collective insurance against life’s hazards: ill-health, unemployment, disability and the death of a partner. 

In his imperishable work A Theory of Justice (1971), the US philosopher John Rawls imagined individuals behind a “veil of ignorance”, knowing nothing of their talents, their wealth or their class. In these circumstances, he suggested, they would adopt what Rawls called “the difference principle”: inequalities of wealth and income are only justified if they work to the advantage of all citizens, and specifically the poorest in society. 

Throughout the horrors of the pandemic, this thought experiment has recurred to me. Behind a veil of ignorance, who would not favour the protection of an expansive welfare state? (Or, indeed, a comprehensive lockdown.) 

The UK government has already extended the welfare state into new realms, vowing to pay 80 per cent of furloughed workers’ salaries up to £30,000 a year (£2,500 a month). Yet what is little known is that this apparent act of munificence was already the norm in parts of Europe. As the Independent’s policy correspondent Jon Stone has noted, in the Netherlands, citizens are paid 70 per cent of their previous salary for a maximum of 38 months (75 per cent for the first two), in Germany they receive 60-67 per cent of their salary for a maximum of 24 months, and in France they are paid 57 per cent of their salary for 24-36 months. 

“Nothing is so permanent as a temporary government programme,” Milton Friedman once acidly remarked. Crisis measures invariably shape the order that eventually follows. To endure the pandemic, and its aftershocks, the UK will require a permanently more resilient and generous welfare state. 

Even before Covid-19’s malign ascent, public opinion towards welfare had begun to reflect our better nature. The 2018 British Social Attitudes survey found that 56 per cent believed that cutting benefits “would damage too many people’s lives” – the highest figure since 2001. Faced with record food bank usage (the Trussell Trust distributed 1.6m emergency food parcels from April 2018 to March 2019), record levels of in-work poverty and a 165 per cent rise in rough sleeping in England since 2010, it is perhaps unsurprising that such progressive instincts are reasserting themselves.

The 1918-19 “Spanish Flu”, one of the deadliest pandemics in human history, spurred the creation of the Swedish welfare state, one of the most egalitarian systems ever known. For Swedes, as with the English and the NHS, this model is a source of patriotic pride. 

The coronavirus pandemic, like its predecessors, is a salutary reminder of our shared humanity. Against such foes, the welfare state is our collective defence. Yet for decades, politicians competed to cut this resource. In a new era of crisis, we may yet hope that they instead compete to fulfil human needs.