Rights, Wrongs and Responsibilities: Citizenship and Social Policy

RIGHTS, WRONGS AND RESPONSIBILITIES: CITIZENSHIP AND SOCIAL POLICY AN IPPR LECTURE by MALCOLM WICKS MP Among the very many challenges facing the next Labour government will be to rebuild trust in the social security system. This requires some rigorous thinking now, in Opposition. By 2015 the system will be characterised by mass unemployment and low benefit levels. Moreover, after years witnessing the triumph of fear over hope, faith in the welfare state will be at a low level with many benefit claimants on the hostile end of popular attitudes, not least from those in employment whose salaries are in decline. Faced with this likely legacy, Labour’s challenge is not to defend the system circa 2010 but rather to rebuild new public confidence in a system based on rights and duties, a move back towards full employment and sound finance. A tall order, yes, but not more so than that facing the 1945 Attlee Government that moved forward on so many fronts – housing, planning, social security and, of course, the National Health Service. Indeed, we can draw strength from the ambition, idealism and determination of that Labour Government, in the immediate post‐War period, when economic circumstances (including the simple shortage of materials for housing) were so much worse than those confronting the Coalition Government now. History Where do we begin? Let me suggest one starting point. We are witnessing the 100th anniversary of the birth of National Insurance: the 1911 National Insurance Act received Royal Assent in December of that year, contributions were first made in July 1912 and the first benefits paid the following January. That early history is associated with illustrious political figures, notably the Liberal, Lloyd George, and also Winston Churchill himself who said: ‘If I had to sum up the immediate future of democratic politics in a single word I should say “Insurance”. If I had my way I would write the word “Insure” over the door of every cottage, and upon the blotting book of every public man…..’.1 The 1911 National Insurance Act may have been a modest measure, but it paved the way for radical reform. Later, of course, another famous Liberal, William Beveridge, produced his ground‐breaking wartime report of 19422. Beveridge spoke graphically, using language that puts contemporary spin doctors to shame, about the challenges that lay ahead: “Reconstruction has many sides, international and domestic. On the domestic side one can define its aims best by naming five giants evils to be destroyed – Want, Disease, Ignorance, Squalor and Idleness.”3 1 W S Churchill, Liberalism and the Social Problem, Hodder & Stoughton, 1909, p254 2 Sir William Beveridge, Social Insurance and Allied Services, cmd 6404, HMSO, 1942 3 Sir William Beveridge, Pillars of Security, George Allen & Unwin, 1943, p42 1 Following the war the Labour government introduced the National Insurance Act of 1946 and with it unemployment and sickness benefits, old age pensions etc. Beveridge’s vision, of course, was never fully enacted. Notably National Insurance benefit levels were often below those of non‐contributory means‐tested benefits. And from the late‐1960s onwards a powerful and well‐meaning welfare rights movement (and I was part of it) encouraged take‐up of these means‐tested benefits and extended the boundaries of entitlement, but this inevitably undermined the contributory principle. Profound social changes around divorce and separation, cohabitation (with relationships often more fragile than marriage) and births outside marriage led to a dramatic increase in the number and proportion of one‐parent families. In 1961 300,000 dependent children lived with a lone parent, by 2010 it was 1.8 million [Table 1]. Table 1 Single family households:1 by type Great Britain millions 1961 1971 1981 1991 2001 2010 One family households Couple2 No children 4.2 5.0 5.3 6.3 6.9 7.1 1–2 dependent children3 4.9 4.8 5.1 4.5 4.5 4.6 3 or more dependent children3 1.3 1.7 1.2 1.1 1.0 0.8 Couples with dependent children 6.2 6.5 6.3 5.6 5.5 5.3 Non-dependent children only 1.6 1.5 1.6 1.8 1.4 1.5 Lone parent2 Dependent children3 0.3 0.6 1.0 1.3 1.7 1.8 Non-dependent children only 0.7 0.7 0.8 0.9 0.7 0.8 1 Data are at Q2 (April–June) each year and are not seasonally adjusted. 2 These households may contain individuals who are not family members. Couples include a small number of same-sex couples and civil partners. 3 Dependent children are children living with their parent(s) aged under 16, or aged 16 to 18 in full- time education, excluding all children who have a spouse, partner or child living in the household. These families may also contain non- dependent children. Source: Census, Labour Force Survey, Office for National Statistics Many are dependent on means‐tested benefits. These trends put huge pressure on the system and raised serious questions about the appropriate balance to be struck between a rights approach, given clear social needs, and a contributory one. Moreover, a powerful feminist critique portrayed the system, correctly, as one more suited to a man’s employment profile than that of a woman. This was partly put right by later Labour governments which legislated for home responsibility payments, crediting in mothers during the period when they were bringing up their children and, later, also recognising the role of carers in the family. However, the lower earnings of women meant that it was only partially remedied, especially as earnings‐related pensions were extended. The contributory principle was also undermined by successive governments, both Conservative and Labour, that failed to renew and communicate the social contract that the 2 contributory principle was based upon and depended upon. Indeed those governments increasingly regarded the contributions system as simply another form of taxation. This has been all too apparent in recent times when, during the dying months of the Labour Government, there was an argument between Gordon Brown and Alistair Darling as to whether to raise National Insurance contributions (favoured by Brown) or VAT levels (favoured by Darling). I suspect that during these internal discussions little thought was given to the nature of the contributory principle and what National Insurance was meant to be all about. Despite all of this, National Insurance still plays a very major role [Table 2]. In 2010/11 contributory payment expenditure was just over £82 billion pounds, some 43% of total social security payments. Income related benefits represented 38% of the total [including tax credits], while non‐contributory non‐income‐related benefits [disability benefits and Child Benefit] represent 19% of the total. Table 2 UK total – all social security payment expenditure: % of total UK social security % of total UK government % of UK GDP £ million payment expenditure expenditure Contributory 82,358 43% 12% 6% Income‐related 73,362 38% 11% 5% Non‐contributory non‐income‐related 37,531 19% 5% 3% Total 193,252 100% 28% 13% UK Total Managed Expenditure 687,800 Gross Domestic Product at current Market prices (ONS series YBHA) 1,478,417 I believe firmly that the ethical, political and financial case for the contributory principle remains strong and coherent. Yet it is undoubtedly in a state of disrepair, faded and jaded. Now is therefore a good opportunity, a century on, to re‐evaluate the purpose of National Insurance, and to ask the question 'does National Insurance have any real relevance in contemporary Britain and in particular can the contributory principle still serve as a foundation stone for a modern social security system?’. Values The starting point, as we seek to develop coherent and affordable policies for the future, must be our values. ‐ our underlying beliefs that shape our key principles. What are the key values? Well, a good starting point, as ever, are the values of the French Revolution – liberté, égalité, fraternité: I would argue that these are guided by three key principles 3 we must aim for a more equal society; it must be one that liberates individuals and families, empowers them, plays to their strengths and is allied to their aspirations ‐ not a dead end, dependency state; and it must encourage ‘fraternity’ – or social cohesion. It should help integrate society, not divide it. The last point, the role of social security in promoting social cohesion, has been neglected in recent decades. It is timely therefore to remind ourselves how a generation of social reformers focussed on this objective. The theme of social cohesion was certainly central to Beveridge’s vision. As his biographer, José Harris, has observed4, Beveridge had long believed, thirty years before his report, that social insurance was “a means not simply of meeting needs but of promoting social solidarity and of bringing institutions and individuals into partnership with the State”. She observes that this theme was not only still powerfully present in the Beveridge Report “but now it was a cohesion that was ethical rather than organisational”. The foremost advocate of an integrationist, universal and solidarity model of social welfare remains Richard Titmuss. He argued his case, in part, on the grounds that developing services and benefits simply for poor people would result in ‘poor services’. As he wrote: “…an impression is sustained that poor people are a distinctly separate and permanent sector of the population, a class or a race or a caste apart.”5 Rather he argued that: “Universal services available without distinction of class, colour, sex or religion, can perform functions which foster and promote attitudes and behaviour directed towards the values of social solidarity, altruism, toleration and accountability”.6 These words of Richard Titmuss from the year 1972, ring out as a strong truth that should guide the Labour Party towards a new social welfare approach in the second decade of the 21st century.

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