Welfare policy of the United Kingdom

Creation of the welfare system and state

The United Kingdom is a union state – i.e a state where a state's component parts have joined together due to a union of crowns, administrative standardisation occurs but the component parts of a nature still retain pre-union features (i.e. separate churches) and power is still centralised, but with limited devolution. Because of this, the structure of various services (including welfare) in different countries of the UK changes in certain respects; for example, the laws which apply in Scotland may not be equally applicable to Northern Ireland or England and WalesFile:Wikipedia's W.svg. This also carries implications concerning governmental welfare programs.[1]

The UK has been defined as having a liberal welfare state system.[2][3] A welfare state is defined by the Encyclopædia Britannica as: "[A] concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life."[4] The Britannica also states that "fundamental feature" of any welfare state is that of social insurance, and the UK's National Insurance provides this.[4] This has been provided since 1911 by the National Insurance Act, and was originally a protective system against illness and unemployment; this later expanded to provide retirement pensions and other benefits.[5] Another feature of the welfare state is the public provision of basic education, health services (such as the National Health Service), and housing (in some cases at low cost or without charge).[4]

These were introduced to Britain in two stages: The Liberal reforms (1906–1914, considered the origins of the welfare state)[6] and the Beveridge Report of 1942, and subsequent post-war Labour government.

Liberal reforms

A study of poverty in 1901 by Seebohm Rowntree (called Poverty, A Study of Town Life) found that in a society where those who didn't work didn't eat, there were three times in people's lives when they were especially vulnerable: as a young child; when they were old; and when they were sick or unemployed.[6] In order to counteract his, so-called Radical Liberals led by Lloyd George took their first steps towards Britain's first welfare state.[7] The Liberal government of 1906-1914 implemented welfare policies concerning three main groups in society: the old, the young and working people.[6]

The young
  • In 1906 local authorities were allowed to provide free school meals, although this was not on a compulsory basis.[8]
  • The 1908 Children and Young Persons Act introduced a set of regulations that became known as the Children's Charter. This imposed severe punishments for neglecting or treating children cruelly. It was made illegal to sell cigarettes to children or send them out begging. Separate juvenile courts were set up, which sent children convicted of a crime to borstals (a forerunner to modern youth detention centres), instead of prison.[9]
The old
  • In 1908 pensions were introduced for the over 70s.[10]
Working people
  • In 1909 labour exchanges were set up to help unemployed people find work.[11]
  • The 1911 National Insurance Act was passed, ensuring free medical treatment, and sick pay of 10 shillings a week for 26 weeks.[6] An estimated 13 million workers came to be compulsorily covered under this scheme.[12]

Overall, the Liberal reforms marked a transition point between old laissez-faire attitudes, and those of a more collectivist nature. The reforms made only limited inroads into the problem of poverty. The pensions paid were inadequate and the unemployment benefits were limited to only certain trades, and then provided only for the employee and not his family. Winston Churchill summed up the aim of the Liberals when he said: "If we see a drowning man we do not drag him to the shore. Instead, we provide help to allow him to swim ashore." In other words, the Liberals tried to provide some help for the poorer sections of society, in order that they could help themselves.[13]

Beveridge report and Labour
Leaflet concerning the launch of the NHS in England and Wales.

The aftermath of the First World War boosted demands for social reform, and led to a permanent increase in the role of the state in British society. The end of the war also brought a slump, particularly in northern industrial towns, that deepened into the Great Depression by the 1930s.[7]

During the war, the government became much more involved in people's lives via governmental organisation of the rationing of foodstuffs, clothing and fuel and extra milk and meals being given to expectant mothers and children.[7] The wartime coalition government also committed itself to full employment through Keynesian policies, free universal secondary education, and the introduction of family allowances.[1] Many people welcomed this government intervention and wanted it to go further.[7]

William Beveridge is associated most with the setting up of a blueprint for the post-war welfare state. His Report on Social Insurance and Allied Services was published in December 1942, and it created much public interest at the time.[14] This became a major propaganda weapon, with both major parties committed to its introduction.[1] In essence, Beveridge advocated that all people in work would pay a single weekly flat rate contribution into the state insurance fund.[14]

In 1945, contrary to expectations, Labour won a landslide victory at the General Election and with an overall majority in Parliament there was nothing to stop the new government from carrying out its manifesto programme. Labour's reforms were based on the Beveridge Report and it began tackling the five giants identified by Beveridge:[14]

1. Want (Poverty)
  • National Insurance Act extended Liberal act to include all adults.
  • Industrial Injuries Act was passed, which made insurance against industrial injury compulsory for all employees.
  • 1948: National Assistance Act passed, which provided benefits for those not covered by the National Insurance Act.
2. Disease
3. Squalor
  • 200,000 houses per year built.
  • New Towns Act passed in 1946 laid the plans for 14 new towns in Britain.
4. Ignorance
  • Education act (originally the Conservatives' idea) makes secondary education compulsory until the age of 15 years and provided meals, milk and medical services at every school.
5. Idleness
  • Unemployment was reduced to 2.5% in spite of post-war problems such as shortages of raw materials and massive war debts through nationalisation.[14]

Dismantling of the welfare state

Thatcherism
“” I think we have gone through a period when too many children and people have been given to understand ... "I am homeless, the Government must house me!", and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves.
—Margaret Thatcher, Woman's Own
“”A man has to make his own way – has to look after himself – and his family too – and so long as he does that, he won't come to much harm. But the way some of these cranks talk and write now, you'd think everybody has to look after everybody else, as if we were all mixed up together like bees in a hive – community and all that nonsense. But take my word for it, you youngsters ... a man has to mind his own business and look after himself and his own.
—Eric Birling, An Inspector Calls (J. B. Priestley)

Thatcher began to attend lunches regularly at the IEAFile:Wikipedia's W.svg, a think tank founded by the poultry magnate Antony Fisher, a disciple of Friedrich von Hayek; she had been visiting the IEA and reading its publications since the early 1960s. There she was influenced by the ideas of Ralph Harris and Arthur Seldon, and she became the face of the ideological movement opposing the welfare state. Keynesian economics, they believed, was weakening Britain. The institute's pamphlets proposed less government, lower taxes, and more freedom for business and consumers.[15]

Neoliberalism is famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom.[16] Neoliberalism is a term which, since the 1980s, has been used by scholars in a wide variety of social sciences[17] and critics[18] primarily in reference to the resurgence of 19th century ideas associated with laissez-faire economic liberalism. Beginning in the 1970s and 1980s, its advocates supported policies such as privatization, fiscal austerity, deregulation, free trade, the reduction of the welfare state and reductions in government spending in order to enhance the role of the private sector in the economy.[16][19][20][21][22][23][24] The transition of consensus towards neoliberal policies and the acceptance of neoliberal economic theories in the 1970s are seen by some academics as the root of financialisationFile:Wikipedia's W.svg, with the financial crisis of 2007–08 one of the ultimate results.[25][26][27][28]

Current government policy
UK Government welfare expenditure 2011–12
  • State pension (46.32%)
  • Housing Benefit (10.55%)
  • Disability Living Allowance (7.87%)
  • Pension Credit (5.06%)
  • Income Support (4.31%)
  • Rent rebates (3.43%)
  • Attendance allowance (3.31%)
  • Jobseeker's Allowance (3.06%)
  • Incapacity Benefit (3.06%)
  • Council Tax Benefit (3%)
  • Other (10.03%)[29]

Comparing Coalition austerity measures with the Opposition's, the respected Financial Times commentator Martin Wolf commented that the "big shift from Labour ... is the cuts in welfare benefits."[30] The government's austerity programmeFile:Wikipedia's W.svg, which involves reduction in government policy, has been linked to a rise in food banks. A study published in the British Medical Journal in 2015 found that each 1 percentage point increase in the rate of Jobseeker's Allowance (dole) claimants sanctioned was associated with a 0.09 percentage point rise in food bank use.[31] The austerity programme has faced opposition from disability rights groups for disproportionately affecting disabled people. The "bedroom tax"File:Wikipedia's W.svg is an austerity measure that has attracted particular criticism, with activists arguing that two thirds of council houses affected by the policy are occupied with a person with a disability.[32]

Arguably the most alarming aspect of the current government's welfare reform policy is its redefinition of "poverty"; poverty is no longer classified by a family's income, but as to whether a family is in work or not.[33] Considering that two-thirds of people who found work were accepting wages that are below the living wage (according to the Joseph Rowntree Foundation),[34] this has been criticised by anti-poverty campaigners as an unrealistic view of poverty in Britain today.[33]

The Department for Work and Pensions has been criticised recently for using false case studies of benefits claimants in one of its leaflets following a Freedom of Information request by Welfare Weekly, claiming that they were for "illustrative purposes only"[35][36] and that it was "quite wrong" to pass these off as genuine quotes.[37]

Welfare Reform and Work Bill

One of these reforms was the Welfare Reform and Work Bill, supported by Iain Duncan Smith (Secretary of State for Work and Pensions) and the Conservative Party. Many people have criticised the bill, with some even going as far as to defining it as a "Pandora's box for Britain's poorest families".[33] The cuts to tax credits have been criticised for unfairly disadvantaging the working poor, and a clause in the bill allows the benefits cap of £20,000 (£23,000 in London) to be reduced further, without any consultation with Parliament, thus making those from larger families even worse off.[33] It also called for £12bn to be made in cuts.[38]

Harriet Harman (deputy leader of the Labour Party) ordered her Labour MPs to abstain from the vote for the bill as opposed to voting against it (a move which US-based magazine The Nation said "underline[d] Labour's moral and intellectual bankruptcy"[39]). However, one potential Labour leader associated with the hard left, Jeremy Corbyn, voted against the bill, alongside 48 Labour MPs who defied the orders of the deputy leader.[40] Other parties in opposition to the bill were the Scottish National Party (who said that the Bill was "...an attack on civil society, it's an attack on our poorest and hard working families, and it's a regressive Bill that takes us back in time with cuts that will hit women and children the hardest"),[41] the Liberal Democrats, the Democratic Unionist Party (Northern Ireland), Plaid Cymru and the Green Party of England and Wales.[42]

Shifting the rhetoric

In its defence, the government's official website, GOV.UK, claims under the heading Welfare that: "The benefits system needs to be reformed to be fair, affordable and able to reduce poverty, worklessness and welfare dependency. This will make sure people are helped to move into work while the most vulnerable get the support they need."[43]

Critics argue that this is the government's excuse to execute large-scale cuts in services, and that it perpetuates the stereotype that people on Incapacity Benefit or Disability Living Allowance are unwilling to work, faking their condition, or otherwise being "scroungers".[44] and that the term "welfare depedency" is tantamount to blaming the victim.[45] The rhetoric surrounding issues such as so-called benefit scroungers often ignores the facts: false benefits claimants are often a drop in the ocean in comparison to tax dodgers. As commentator Owen Jones writes in his book The Establishment: And How They Get Away With It:

“”The real villains ... have received anything like the attention they deserve. The behaviour of those on the bottom of Britain's profoundly unequal order is subject to an endless barrage of criticism and condemnation: it seems no accident that while Benefits Street graced Britain's television screens, shows called Tax Dodgers Street or Bankers Street were conspicuously absent.
—Owen Jones[46]

A slim majority of the British public agree with the view that we should be targeting tax evaders more than benefits claimants (52%,[47] although undoubtedly the number would be higher if it were not for sensationalist headlines in the tabloid press), and Iain Duncan Smith himself has dad to admit that the Department for Work and Pensions has over-emphasised statistics on benefit fraud,[48] whereas when asked outright by the chair of the Public Accounts committee if Apple, Google, Facebook, eBay and Starbucks were morally wrong for avoiding nearly £900m of tax between them, David Cameron gave a weak response, saying "we do need to make sure we are encouraging these businesses to invest in our country".[48]

However, very many people suspect that "politicians and big business are so close" that tax dodging would "be allowed to continue, irrespective of who is in government". That view is embraced by 67%, as against just 27% who reject it.[47] This shows that emphasis on those on the lower rungs of our society, whether it be so-called benefits scroungers or immigrants, is at the very least disingenuous, at the most cynical and manipulative.

Let's look at the evidence: The National Audit Office noted in 2015 that approximately £1.6bn of fraudulent benefits were claimed, in comparison to £4.1bn in tax evasion, £3.1bn in tax avoidance and £5.4bn due to criminal activity (e.g. smuggling).[49]

These figures all show that the government are focusing on the wrong groups – the £3.1bn figure in tax avoidance, for example, is still completely legal. Even if we were to gain all £1.6bn from fraudulent benefits claimants, this would only be the tip of the iceberg, and that people who criticise benefits scroungers without batting an eye to tax avoidance often have something to hide.

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References
  1. Spicker, Paul. "Social policy in the UK".
  2. Gøsta Esping-Andersen (1998). The Three Worlds of Welfare Capitalism. Princeton, New Jersey: Princeton University Press; Polity Press. ISBN 9780745607962.
  3. Ferragina, Emanuele, and Martin Seeleib-Kaiser. "Thematic Review: Welfare regime debate: past, present, futures?." Policy & Politics 39.4 (2011): 583-611.
  4. The Editors of Encyclopædia Britannica, ed. "Welfare state". Encyclopædia Britannica.
  5. The Committee Office, House of Commons. "Select Committee on Social Security Fifth Report, the Contributory Principle: The relationship between tax and National Insurance". Publications.parliament.uk.
  6. "The Liberal reforms 1906-1914 (summary)". GCSE Bitesize. BBC.
  7. Steve Schifferes (26 July 2005). "Britain's long road to the welfare state". BBC News.
  8. "Why were school dinners brought in?".
  9. "1908 Children's Act was created to protect the poorest children in society from abuse" (in English). Intriguing History. 12 January 2012.
  10. Gazeley, Ian (17 July 2003). Poverty in Britain 1900–1945. Palgrave Macmillan. ISBN 978-0333716199.
  11. "Case Study: Working People".
  12. David Taylor (1988). Mastering Economic and Social History. Macmillan Education. ISBN 978-0-333-36804-6.
  13. "Impact of Liberal reforms". BBC.
  14. "Beginnings of the welfare state". BBC.
  15. Beckett, Andy (2010). "11". When the Lights Went Out; Britain in the Seventies. Faber & Faber. ISBN 978-0-571-22137-0.
  16. Campbell Jones, Martin Parker, Rene Ten Bos (2005). For Business Ethics. Routledge. ISBN 0415311357. p. 100:
    • "Neoliberalism represents a set of ideas that caught on from the mid to late 1970s, and are famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States following their elections in 1979 and 1981. The 'neo' part of neoliberalism indicates that there is something new about it, suggesting that it is an updated version of older ideas about 'liberal economics' which has long argued that markets should be free from intervention by the state. In its simplest version, it reads: markets good, government bad."
  17. Taylor C. Boas, Jordan Gans-Morse (June 2009). "Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan". Studies in Comparative International Development 44 (2): 137–161. ""Neoliberalism has rapidly become an academic catchphrase. From only a handful of mentions in the 1980s, use of the term has exploded during the past two decades, appearing in nearly 1,000 academic articles annually between 2002 and 2005. Neoliberalism is now a predominant concept in scholarly writing on development and political economy, far outpacing related terms such as monetarism, neoconservatism, the Washington Consensus, and even market reform.""
  18. Noel Castree (2013). A Dictionary of Human Geography. Oxford University Press. p. 339. "'Neoliberalism' is very much a critics term: it is virtually never used by those whom the critics describe as neoliberals."
  19. Gérard Duménil and Dominique Lévy (2004). Capital Resurgent: Roots of the Neoliberal Revolution. Harvard University Press. ISBN 0674011589 Retrieved 3 November 2014.
  20. Thomas I. Palley (May 5, 2004). From Keynesianism to Neoliberalism: Shifting Paradigms in Economics. Foreign Policy in Focus. Retrieved November 11, 2014.
  21. Jonathan Arac in Peter A. Hall and Michèle Lamont in Social Resilience in the Neoliberal Era (2013) pp xvi-xvii
    • The term is generally used by those who oppose it. People do not call themselves neoliberal; instead, they tag their enemies with the term.
  22. Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003
  23. "Neo-Liberal Ideas". World Health Organization.
  24. Haymes, Stephen; Vidal de Haymes, Maria; Miller, Reuben, eds (2015). The Routledge Handbook of Poverty in the United States. London: Routledge. p. 7. ISBN 0415673445. "Neoliberalism represents a reassertion of the liberal political economic beliefs of the 19th century in the contemporary era."
  25. Lavoie, Marc (Winter 2012–2013). "Financialization, neo-liberalism, and securitization". Journal of Post Keynesian Economics 35 (2): 215–233.
  26. Manfred B. Steger and Ravi K. Roy, Neoliberalism: A Very Short Introduction, (Oxford University Press, 2010), ISBN 019956051X, p. 123
  27. Gérard Duménil and Dominique Lévy, The Crisis of Neoliberalism, (Harvard University Press, 2013), ISBN 0674072243
  28. David M Kotz, The Rise and Fall of Neoliberal Capitalism, (Harvard University Press, 2015), ISBN 0674725654
  29. Rogers, Simon; Blight, Garry (4 December 2012). "Public spending by UK government department 2011-12: an interactive guide". The Guardian.
  30. Martin Wolf (28 October 2011). "Britain has gone climbing without a rope". The Financial Times.
  31. Loopstra, Rachel (2015). "Austerity, sanctions, and the rise of food banks in the UK". BMJ: 2.
  32. Ryan, Frances (16 July 2013). "'Bedroom tax' puts added burden on disabled people".
  33. Javed Khan (19 July 2015). "The welfare reform and work bill will make poor children poorer". The Guardian.
  34. "Record numbers of working families in poverty due to low-paid jobs". The Guardian. 24 November 2014.
  35. Kevin Rawlinson; Frances Perraudin (18 August 2015). "DWP admits inventing quotes from fake 'benefits claimants' for sanctions leaflet". The Guardian.
  36. Kevin Rawlinson (21 August 2015). "Fake benefits claimant 'Zac' quoted in other DWP documents". The Guardian.
  37. The Minister for Work and Pensions, Iain Duncan-Smith, admits a leaflet about benefits containing fake quotes from fictitious claimants was 'wrong' Andrew Sparrow (24 August 2015). "Use of fake quotes in benefits leaflet 'quite wrong', Iain Duncan Smith admits". The Guardian.
  38. David Maddox, The Scotsman. "Labour deeply divided as welfare reform bill passes". (01:07, Tuesday 21 July 2015).
  39. D. D. Guttenplan "Why a Left-Wing Socialist Is Poised to Become the Leader of Britain's Labour Party", The Nation (August 26, 2015).
  40. Andrew Sparrow (21 July 2015). "Welfare bill: 48 Labour MPs defy party whip - as it happened". The Guardian.
  41. Scottish National Party (20 July 2015). "SNP Vote against Welfare Reform Bill".
  42. "Welfare cuts backed amid Labour revolt". BBC News. 21 July 2015.
  43. "Welfare".
  44. "The Broken Of Britain: Our Mission". Thebrokenofbritain.blogspot.com. 2011-01-15.
  45. Brendon O'Connor. "The Intellectual Origins of 'Welfare Dependency'". Australian Journal of Social Issues.
  46. Jones, Owen (21 April 2015). The Establishment: And How They Get Away with it. Melville House. p. xi. ISBN 9780141974996.
  47. Tom Clark (16 February 2015). "Treat tax dodgers more harshly than benefit cheats, says Guardian/ICM poll". The Guardian.
  48. "Shift the rhetoric from benefit scroungers to cheating corporations". New Statesman (12 November 2012).
  49. "Which costs more: benefit fraud or tax avoidance?". "The NAO did not break down how much of the £4.6bn was fraud, saying that both DWP and HMRC have differing definitions that make this difficult to assess. It said £3.3bn of the total was overpaid by DWP, representing around 1.9 per cent of its £164bn spend, while £1.3bn was overpaid by HMRC, around 4.4 per cent of its £29bn tax credit bill for the year. We can extrapolate from previous figures quoted by the NAO for the 2012/2013 financial year, which found around £1.2bn of deliberate fraud on the part of benefit claimants, representing around 34 per cent of the overpayment total that year. If these proportions remained unchanged, benefit fraud would have risen to around £1.6bn. The remaining £3bn would be accounted for by mistakes made by claimants when applying, or errors by department officials."
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