feature Celebrating sixty years of the welfare state?

In the recent celebrations of the sixtieth being of many working-class communities by the socio-economic upheavals of those years.’ anniversary of the implementation of the majority of Beveridge’s welfare state Benefits also help people cope with family change, including allowing some individuals reforms, the National Insurance Acts and either an independent income within relation- ships or a way out of relationships which turn the National Assistance Act, which out to be abusive. And social security also ties together introduced a nationwide system of the whole population together in interwoven webs of cross-subsidy (as part of the public national insurance and a means-tested finances, which Richard Titmuss likened to Crewe junction, with transfers going in many safety net, seem to have been forgotten. different directions). Fran Bennett looks at what happened. This last point is worth emphasising. Far from benefits up to 2003 being a mechanism which emphasised ‘them’ and ‘us’ (as New Labour, wrongly, said when it introduced new tax cred- its), both national insurance and could be seen as drawing people together.2 National insurance does this by bringing about a sharing of risks, and acting as a national sav- ings scheme without high overheads. Child benefit does so by achieving redistribution over the individual lifecycle and between the genera- tions, with the whole community contributing to Mark Boulton/Photofusion everyone’s future through helping parents with the cost of their children’s upbringing. In fact, Why celebrate the sixtieth anniversary research by John Hills and colleagues in 1997 of the social security system? showed that the tax and benefits system as a Ten years ago, Robert Walker described the whole was then more about what they called social security system as the greatest success ‘William Beveridge’-type redistribution (over the of the twentieth century welfare state.1 He individual lifecycle) than ‘Robin Hood’-type emphasised that it is society’s principal weapon redistribution (between rich and poor).3 against social exclusion (and, therefore, evidence of a civilised and civilising society), it gives a A national conference held in 1992 did focus on return on savings and a reward for past contri- social security, and two volumes of essays were butions, and it is an investment in people and published as a result.4 Some authors argued the future prosperity of the country, and a cushion that the National Assistance Act introducing a at times of economic change. Norman Ginsburg national means-tested safety net was the key from London Metropolitan University (one of the achievement of Beveridge’s report. It is more contributors to a website set up by the University comprehensive than many such schemes in the of Wales to mark sixty years of the welfare developed world, and involves a legal right to state at http://welfarestate2008.newport.ac.uk) help, rather than a discretionary claim mediated expands on this last point: ‘One of the great through a social worker, which has been more paradoxes of the Thatcherite Conservative era common elsewhere. There are also nationally is that the welfare state helped, to some extent, uniform rates of benefit, not always the case in to cushion the devastation wrought on the well- other countries.

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So why are we not celebrating this security is the first since Beveridge – in other achievement? words, to assume that the system we have is There are some longstanding reasons which the same as it was in the late 1940s. Of course, may explain why we are not so ready to cele- this is not the case, even if some elements are brate sixty years of the social security system. still recognisable. So did any developments First, the criticisms of the original Beveridge since Beveridge’s time make social security a scheme are well known. For example, it was cause for celebration? built on the traditional family unit, with most married women’s rights mediated through their The evidence is mixed. Paul Gregg identifies husbands’. The wife as a mother (according to three periods of change since Beveridge.5 The Beveridge) would be hard at work adding to the first was an attempt to introduce earnings rela- British race, with provision for immigrants and tion for benefits in the 1960s and 1970s, to other forms of diversity not really imagined. make the UK’s national insurance system more like those of continental Europe. But this did not There were also some glaring gaps in social stick. Earnings-related additions to short-term insurance, which left some groups unprovided national insurance benefits were abolished in for. In addition, though it dealt with interruptions the 1980s and we are now well on the way to in earnings, low pay and poverty in work were abolishing earnings-related state pensions, a not seen as significant problems. Perhaps most process which started in the 1980s.6 importantly, the social insurance scheme pro- vided minimum rights for the many – the mod- Non-means-tested, non-contributory benefits est level of benefits and the initial dependence were introduced in the 1970s under the then of the system on flat-rate contributions meant Labour government to give an income and meet the scheme was limited in its ambitions and the additional costs for disabled people, and to middle classes did not really develop a deep- provide an income replacement for carers. Claimants… seated loyalty to it in the same way as they did These are one of the success stories of social to social insurance systems in some other security provision, arguably looking more like frequently have European countries. More recent critics have the benefits based on citizenship, which are strong feelings also argued that it excludes some groups, gives more common in the Scandinavian countries, more to the higher paid, and is not proportional and making a real difference to the lives of many of stigma and or progressive in terms of the burden it imposed disabled people and carers. But, for carers in frustration on contributors. particular, these benefits are paid at an inade- quate level. In addition, governance was an issue. There is a model of social insurance in which insurance There was also an expansion of means-tested contributions are seen as more separate from benefits in the 1970s, including new benefits for taxation, and the funds are often managed by people in paid work, such as family income the social partners – trades unions and employ- supplement and a national system of rent and ers. Arguably, this model can give both contrib- rate rebates. This was the first major recognition utors and claimants a more tangible stake. But (apart from benefits for specific costs, such as our national insurance system has always been child benefit and disability benefits) that social state-run and contributions are now being security provision might also be necessary for increasingly integrated into the tax system. people in work.

There are perhaps more obvious reasons why The 1980s were dominated by cuts in national we are not celebrating the sixtieth anniversary insurance benefits, as well as the tightening of of means-tested benefits. On the one hand, qualifying conditions. Then the mid-1980s saw claimants of such benefits frequently have the Fowler reviews, which started from the per- strong feelings of stigma and frustration. On the spective of the Thatcher government’s attempts other, the taxpayers who fund the benefits often to reduce public spending and ended by creat- have just as strong feelings of resentment ing a means-tested benefits system suited to a against those who claim. This suggests that it is mass role and computerisation.7 Gregg talks not sufficient for a viable welfare state to about the increasing moves in this period towards depend solely on altruism, especially where a residualised means-tested model of benefits, people in poverty are concerned. brought about by both these developments.

Developments since Beveridge In opposition, Labour’s 1992 shadow Budget A common error among social policy commen- included proposals for more generous universal tators is to talk as though each review of social benefits – child benefit and pensions in particular

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– financed by higher payments. But significant- posed by the Commission for Social Justice – ly, these plans were seen as being rejected by but that this had been rejected on the grounds the electorate when Labour did not win the of cost. The rejection was probably also due to general election that year. They were also linked the strong influence of changes in the system of to the ‘southern discomfort’, which Labour was ‘welfare’ in the United States on New Labour said to be suffering from – a situation in which ideas. the acceptable limits of taxation were seen to have been reached and aspirant voters were So where are we now? Positive supposedly put off by Labour’s tax proposals. developments since 1997 Some commentators now argue that this was a Levels of financial support have improved – and mistaken interpretation, or at least may have not just for those in work, via tax credits. Child been exaggerated. But the belief was so strong benefit has been increased in real terms, at that we could be said to be still living in its least for the first or eldest eligible child. Benefits shadow. for young children in out-of-work families have more than doubled in real terms. The incomes Following the general election, the Commission of pensioners on have also on Social Justice was set up by the late John improved and are now up to the ‘minimum Smith. It was expected to support means-test- income standard’ devised recently by researchers ing everything that moved in the wake of the for the Joseph Rowntree Foundation.10 The electorate’s apparent rejection of the shadow Government is committed to increasing the Budget proposals. Instead, the Commission basic state pension in line with earnings argued that means-testing was old-fashioned, increases by 2012, or at least in the course of and did not fit either the modern family or the the next Parliament. Maternity pay has been nature of the labour market in the late twentieth extended, it is easier to qualify for maternity century. Instead of extending means-testing, it allowance, there is now at least some paternity proposed a modernised social insurance pay, and the earnings limit for people on carer’s scheme adapted better to the needs of part- allowance has been increased. These are all Sanctions do not time workers and carers, with options for the very welcome moves and mean that, in all these better-off to pay additional contributions for areas, benefits are now improved compared seem to motivate extra benefits. It also laid the basis for more with the situation in 1997. lone parents towards recent reforms, in emphasising the role of social security as investment in human capital and, Causes for concern the labour market therefore, as essential for economic growth.8 In There are, however, some significant causes for retrospect, this was perhaps rather over- concern. There has been a shift towards greater emphasised, in that it does not apply to many conditionality for those to whom it already significant issues of current social provision applied, together with a spread of conditionality (such as the ageing population or rising to some groups to whom it did not previously demands for long-term care), but at the time it apply. The evidence about the impact of condi- was thought essential in order to rehabilitate tionality is mixed. Often interaction with person- social security as a legitimate area of spending. al advisers is appreciated by claimants, although recent evaluation shows that sanc- However, when ‘New’ Labour gained office in tions do not seem to motivate lone parents 1997, it was determined to show the City it towards the labour market.11 meant business. It implemented a two-year freeze in public spending (including cuts in Secondly, as Jonathan Bradshaw among others lone-parent benefits), which had initially been has argued, the level of basic benefit (income proposed by the Conservatives when in govern- support or jobseeker’s allowance) for working- ment. It also tended to talk of spending on age adults is abysmal, and continually decreas- social security as representing the bills of eco- ing relative to the living standards of the rest of nomic failure, and as a burden which needed to the population, as benefits are usually uprated be minimised. only in line with prices each year. Benefit levels for young single people are even lower. This is Labour’s Green Paper on welfare reform in bound to threaten the achievement of the 19989 labelled its ideas for the future as a ‘new Government’s goals for both its welfare to work contract for welfare’ – a harbinger of things to and child poverty strategies. come. There were rumours that Frank Field MP, then Minister for Welfare Reform, had suggest- Thirdly, there has been a merging of national ed a revitalised national insurance scheme – insurance and means-tested benefits (first job- though probably not quite the same as that pro- seeker’s allowance and now employment and

14 Poverty 131 feature support allowance). Gregg talks about the cur- or incapacity benefit, but who have an earning rent benefits system as an activational welfare partner – led to a suggestion that there could be model, with greater emphasis on incentives and a non-means-tested benefit for the first twelve support as well as conditionality. He no longer weeks, or perhaps an individual rather than a talks about what kind of benefit people get household means test could be used. But many (contributory, means-tested or non-contributory claimants, particularly women, would still lose and non-means-tested) as being a meaningful out under the first modification and the second issue to discuss. seems unlikely to happen. The Government’s response in its latest Green Paper15 appears to Fourthly, there is also a shift which John Hills be the abolition of in its entirety. has identified12 towards a proliferation of means tests – both in the traditional social security The failure to grasp the difference between dif- system, and outside (for example, through ferent kinds of benefits for women in particular the introduction of education maintenance also appears to reflect a curious blind spot in allowances and student grants). This has terms of gender issues on the part of the occurred only in part because the system has Government. It seems to see no contradiction in become more generous (for example, through imposing conditionality on partners who have tax credits), so that it is drawing more people in. no right to receive benefit themselves, as their As Hugh Bochel and Andrew Defty found a few partners (in joint-claim jobseeker’s allowance) years ago,13 Labour MPs are now largely sup- receive a dependant’s addition on their behalf. portive of means-testing, while Conservative Work-focused interviews had to be abandoned MPs expressed strong opposition. Increasingly, for carers after complaints at MPs’ surgeries. benefits seem to be seen in the UK not primari- Although Lisa Harker16 raised some of the issues, ly as a means of providing social protection for the Government does not seem to see what individuals over their lifetime, but as a way to goes on in couple households as relevant to The failure to grasp deal with household need at one point in time. welfare-to-work strategies. This is despite the existence of evidence that it is highly relevant. the difference A focus on benefit simplification has been And lastly, whilst there are clear attractions in between different developed (again), with the setting up of the the idea of individualised budgets for disabled Benefit Simplification Unit among other initia- people, in terms of empowerment, flexibility, kinds of benefits for tives. On the surface, this is welcome, as and personalisation, there seems to be no real women reflects a claimants find the complexity of the benefits recognition of the potential tensions between system frustrating, and this results in many not the carer and the cared-for person, or the curious blind spot… getting their rights. (However, whilst the argu- importance of having separate incomes for each. on the part of the ment against simplification is often that the complexities are there to meet additional needs, How to create a sustainable social Government in practice they are often there to prevent enti- security system? tlement.) But it is important not to have just an So the current scenario presents various signif- administrative imperative for change. icant challenges – even leaving aside the prom- ised civil service reductions, the looming Perhaps the most significant facet of Labour’s recession and the upcoming general election. approach to benefits has been the overwhelm- There are no easy answers about how to create ing focus on employment. This has influenced a social security system that we can celebrate proposals to create a single working-age bene- now and sustain in the longer term. Tony Blair, fit (for example, from the Institute for Public when he talked as Prime Minister about making Policy Research14). There is obviously a genuine the whole welfare state popular again,17 was desire among its proponents to tackle the prob- really referring to the benefits system. Labour lems claimants have in moving from one bene- has tried in various ways to achieve this. It has fit to another, and it is clear that to some extent attempted to implement redistribution by the allocation of individuals to certain benefits is stealth (eg, through increases in benefits for arbitrary, and availability for work conditions out-of-work families with children), but this could be more flexible. But there does seem to approach cannot work for ever. In addition (as be a failure to recognise the implications of the work by MORI for the Fabian Commission on proposal, which in some versions would col- Life Chances and Child Poverty showed18), it lapse virtually all working-age benefits into one results in the public not being aware of the means-tested alternative. Concerns expressed efforts that the Government is making to tackle about this – particularly about the implications child poverty, or of its (relative) success. It there- for women who are currently entitled to a non- fore becomes more difficult to build up public means-tested benefit such as carer’s allowance support for continuing efforts in this direction.

Poverty 131 15 feature Celebrating sixty years of the welfare state?

The Government also tried to use the tax cred- More generally, celebration of the multiple func- its system to dissociate those in work needing tions of a social security system in a modern additional help from benefit claimants – in an society would be welcome. Benefits are not attempt to disconnect (some) income transfers only intended to relieve poverty. Yet this is often from social security altogether. This seems to the perception of even those people who have succeeded, at least to some extent, in that receive them. For example, a recent report for people often see tax credits as a supplement to the Government showed that even people who their income as ‘hardworking families’, and are get disability living allowance think it is a bene- more likely to take them up19 (though the take- fit for being out of work. This may, of course, up rate still does not match that for child bene- bear out claimants’ experiences, in that their fit, and there is anecdotal evidence that the entry into work may trigger a review of their eli- administrative debacle on the introduction of gibility. But in principle disability living tax credits has resulted in some people not allowance is available to help meet the addi- renewing their claims). But tax credits can only tional costs caused by disability for those both replace certain bits of the benefits system, and in and out of employment. The Government may also exacerbate the distinction between should be championing this, and explaining it ‘hardworking families’ and those on benefits, to as part of our provision for the extra costs of the detriment of the latter. disability for all.

The other alternative the Government has tried Secondly, working with the grain of public opin- is to improve the image of claimants and the ion is not enough – in fact, as already noted, it benefits system in the eyes of taxpayers – by can be counterproductive. Public opinion often ensuring that fraud is vigorously tackled, pursu- needs to be challenged. We all recognise that ing ‘abuse’ and proclaiming a ‘something for politicians must maintain their relationship with something’ welfare state in which claimants the public and are dependent on it for their Giving claimants a must be seen to be doing everything they can to future. But as Ruth Lister has said, govern- role in shaping the help themselves. Again, this may work. But it ments have a responsibility to lead public opin- may also be problematic in terms of raising ion (in a progressive direction), not just to woo benefits system negative images of claimants to begin with – it.21 This Government has already done this in should be seen as and evidence from the US suggests this may terms of public attitudes towards disability, work as a ratchet effect, always in one direction, mental health issues, sexuality and to some relevant to the rights towards ever harsher treatment in order to extent gender. It is now time to do it for benefit and responsibilities assuage the fears of the public. claimants too. agenda So if these ways of trying to create a popular Thirdly, we should endeavour to get the admin- social security system all have drawbacks, what istration right. This may seem on the surface to would be a better way to ensure its sustainabil- be a trivial issue. But the administrative disas- ity? The first issue must be language. The ters we have seen in various schemes recently Government increasingly recognises that the not only bring chaos to many claimants’ lives, language ministers use is important, but some- but also undermine any claim the Government times blames the media for creating the prob- may make that claimants have inalienable rights lem. But not all phrases are made up by in return for fulfilling their responsibilities. In sub-editors; many come straight from spindoc- addition, they are a shockingly bad advertise- tors and are used by ministers. For example, ment for the benefits system in the eyes of the the constant labelling of claimants as suffering wider public. from ‘dependency’ manages to brand them as helpless addicts whilst also blaming them. This Fourthly, the public should feel they have a cannot but create demands for additional con- stake in the system. It may be too difficult now ditionality and sanctions. And it must also affect for the UK to create fully-fledged social insur- the attitudes of frontline workers, who are also ance funds, or to match the social democratic members of the public, and dealing with feelings of ownership of the social protection claimants every day. As the Social Exclusion system which appear to be more common Unit found recently in its investigation into serv- among Scandinavian citizens. But there is cur- ices for socially excluded adults, being treated rently no mechanism for claimants to feel they with respect (or not) is key to whether they have can influence the benefits system, and no a positive experience of interaction with the requirement on government to engage them in welfare state.20 doing so. Yet the Institute for Public Policy Research found recently when doing focus

16 Poverty 131 feature groups with jobseekers that they had articulate Fran Bennett is a senior research fellow at the University ideas for reforming the system, but nowhere to of Oxford and a former director of CPAG take them.22 Giving claimants a role in shaping This article is an edited version of a speech she delivered to the benefits system should be seen as relevant CPAG’s annual welfare rights conference, ‘The Welfare to the rights and responsibilities agenda – an State: 60 years on’, held on 4 September 2008. extension of rights for claimants and responsi- bilities for the state. 1R Walker, ‘Promoting Positive Welfare’, New Economy 5:2, 1998, pp77-82 2F Bennett, ‘Myths About the Tax and Benefit System’, Benefits 38, Increasingly there are calls for the contributory 2003, pp199-200 national insurance scheme to be retained only 3 See, for example, J Hills and others, The Future of Welfare: a for pensions.23 But a continual erosion of nation- guide to the debate, Joseph Rowntree Foundation,1997 4S Baldwin and J Falkingham (eds), Social Security and Social al insurance benefits can only lead to increasing Change: new challenges to the Beveridge model, Harvester cynicism and mistrust of government intentions Wheatsheaf, 1994; J Hills, J Ditch and H Glennerster (eds), by the public. This is not a stable foundation for Beveridge and Social Security: a retrospective, Clarendon Press, 1994 building a social security system which is 5P Gregg, UK Welfare Reform 1996 to 2008 and Beyond: a sustainable not only in economic, but also in personalised and responsive welfare system?, CMPO Working political, terms. Paper 08/196, Centre for Market and Public Organisation, University of Bristol, 2008 6 Department of Health and Social Security, Reform of Social Conclusions Security: programme for action, Cm 9691, White Paper, HMSO, According to Wim van Oorschot, Professor of 1985 7F Bennett and J Millar, ‘Social Security: reforms and challenges’, Sociology from Tilburg University, speaking at in J Millar (ed), Understanding Social Security, The Policy Press, the Social Policy Association conference this forthcoming year, debates about social security in the Anglo- 8 Commission on Social Justice, Social Justice: strategies for national renewal, Vintage,1994 Saxon context tend to focus only on one side of 9 Department of Social Security, New Ambitions for our Country: a the equation – the redistributive side, with argu- new contract for welfare, Cm 3805, Green Paper, HMSO, 1998 ments about whether benefits are being allocat- 10 J Bradshaw, S Middleton, A Davis, N Oldfield, N Smith, L Cusworth and J Williams, A Minimum Income Standard for Britain: ed to the right people. He argued that we what people think, Joseph Rowntree Foundation, 2008 should, instead, think more about the inputs 11 V Goodwin, The Effects of Benefit Sanctions on Lone Parents’ side, as would tend to happen more often in Employment Decisions and Moves into Employment, DWP Research Report 511, Corporate Document Services, 2008 continental Europe. What are the motives of 12 J Hills, Inequality and the State, Oxford University Press, 2004 individuals who are willing to contribute to the 13 H Bochel and A Defty, Welfare Policy Under New Labour: views common good via the social security system, from inside Westminster, The Policy Press, 2007, reviewed by Ruth Lister and how can we maintain that solidarity? These 14 J Bennett and G Cooke (eds), It’s All About You: citizen-centred motives may range from a sense of moral duty welfare, Institute for Public Policy Research, 2007 to pity for claimants, but he emphasised that 15 Department for Work and Pensions, No-one Written Off: reforming welfare to reward responsibility, Cm 7363, Green Paper, TSO, they are also based on enlightened self-interest, 2008 which he argued is the cornerstone, rather than 16 L Harker, Delivering on Child Poverty: what would it take?, Cm the enemy, of the welfare state. He was very 6951, Department for Work and Pensions, 2006 17 T Blair, Beveridge lecture, 18 March 1999 clear that residualisation – cutting back benefits 18 The Fabian Commission on Life Chances and Child Poverty, Life to focus only on the neediest – was not a way Chances: what does the public really think about poverty?, Fabian of protecting provision for the poor in an era of Society, 2005 19 HM Revenue and Customs, Child and Working Tax Credits globalisation, but instead was likely to result in Statistics: April 2008, 2008 a permanent discussion about the deserving- 20 Social Exclusion Unit, Improving Services, Improving Lives: ness of benefit recipients and a deterioration of evidence and key themes, Office of the Deputy Prime Minister, 2005, pp58-59, cited in R Lister, ‘Recognition and Voice: the welfare in the broadest sense. challenge for social justice’ in G Craig, T Burchardt and D Gordon, Social Justice and Public Poverty: seeking fairness in diverse There is a danger in the current climate that so societies, The Policy Press, 2008, pp105-122 21 See, for example, citation of R Lister by L Bamfield in ‘Making the much policy energy is channelled into discus- Public Case for Tackling Poverty and Inequality, Poverty 121, sion of tax credits and welfare-to-work strate- CPAG, 2005 gies that there is none left over for broader 22 See note 14 23 See, for example, J Bennett and G Cooke (eds), It’s All About You: questions such as these. We need to continue citizen-centred welfare, Institute for Public Policy Research, 2008; to create policy and political spaces for engag- see also J Hills, Inclusion or Insurance? National insurance and the ing in vigorous debates about the shape of the future of the contributory principle, CASE 068, Centre for Analysis of Social Exclusion, London School of Economics, 2003, for a social security system and the welfare state discussion of a similar idea more generally, rather than allow ourselves to be confined to the narrow focus of topical issues of ‘welfare reform’. ■

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