Where next for the Labour Party on Welfare?

In recent weeks, the Labour Party leader Ed Miliband has been subject to repeat attacks from senior party colleagues including John Prescott, David Blunkett, Andy Burnham and Maurice Glasman, (see here). Criticisms have been mainly due to a perceived lack of “rock hard defence” (against the government) and a failure to “shout loud enough” on important policy issues. Unsurprisingly, welfare has been top of the list of policy areas where Miliband is accused of lacking clarity and substance (see here). Below I sketch out how a new progressive welfare policy might look, considering some key elements that I believe the party have not been ‘shouting loudly’ enough about.

First, the strongest dividing line between a Miliband and Blairite welfare policy must lie in its approach to the economy. New Labour welfare policy stood in the shadow of a neoliberal supply-side approach towards unemployment. As is noted elsewhere, policymakers adamantly denied that regional variations in unemployment were a result of demand-side deficiencies, despite strong evidence to the contrary (cf. Beatty and Fothergill, 2002 and 2005; Theodore, 2007). Miliband’s Labour Party ought to demonstrate its commitment to new job-creation projects in areas of high unemployment. They must think creatively of ways to develop an inclusive, green economy which brings much needed work opportunities to areas of high unemployment. As argued before, the ‘right to work’ must be advocated as a central tenet of a coherent welfare policy.

Second, the Labour Party ought to invest more heavily in training programmes for the unemployed – so-called ‘active labour market policies’ (ALMPS). The difference in spending between the UK and other OECD countries is well illustrated by Daniel Sage (see here). He notes that the UK spends just 0.4 per cent of GDP on ALMPS. Perhaps unsurprisingly, this is well behind the Scandinavian countries e.g. Sweden at 1.1 per cent and Denmark at 2 per cent. A greater shock however is the difference between us and our more Liberal brothers, the Germans and French, who spend 0.9 and 1.2 per cent, respectively. No welfare contract between the state and the unemployed can be genuine if it does not include real resources to help people obtain sustained work.

The two points above thus cover the state’s obligations on the ‘supply’ and ‘demand’ side of unemployment. Decent and realistically attainable work must be in place and people must be equipped with the necessary tools to be able to get it. Looking more specifically at the welfare system, Labour must outline plans for simplifications. Irrational cost-saving mechanisms such as the immediate withdrawal of payments upon somebody obtaining work are counter-productive, causing people to fall back on crisis loans which are far more costly in the longer term. The Labour Party must welcome the principle of simplification behind the Coalition’s Universal Credit and propose its own changes which take this further.

Once promises have been made on these fronts then the Labour Party can state its position on the most politically sensitive issue – conditionality – the expectations upon welfare recipients in return for state support. This is an uncomfortable area for Labour leaders and it is one in which they know that they are consistently behind the Conservatives in opinion polls. It is thus something on which they must offer greater clarity.

The scale of ‘benefit fraud’ is notoriously difficult to measure. Left-wing commentators’ often use recent estimates from the Department for Work and Pensions which state that only 0.6 to 0.8 per cent of total expenditure is lost to fraud (DWP, 2009). My personal opinion is that this is probably wrong for the following reasons:

1)      It’s inevitably difficult to measure something that people are likely to lie about

2)      From working with benefit claimants in London, it seemed likely that a higher amount than that did cheat the system for all sorts of reasons, (e.g. they were moving from JSA to work and were waiting for their first pay cheque to come through so that they could be sure they could meet that month’s rent)

In spite of this, the fact is that two-thirds of working-age benefit claimants are now in work (see here) and many of the other one-third are too sick to work. Thus, there must be a sense of perspective on the issue of benefit fraud. Labour Party leaders must avoid, at all costs, the tabloid frenzy of ‘scroungerphobia’. Nonetheless, if the state genuinely does meet its obligations – unlike the current and previous administrations – then a fair degree of conditionality can and arguably, should be a part of the welfare system. 

Zero Hour Contracts and Labour Market Precarity

Since the Guardian uncovered that Sports Direct and, prior to that, Buckingham Palace, were employing many of their staff on ‘zero hour contracts’ the shocking truth of the precarity of the UK labour market has been increasingly brought to light. Today the newspaper also revealed that McDonalds employs 90% of its staff (83,000 people) on such contracts (Guardian, 2013).

A spokesperson for the fast food giant defends the company’s practice by arguing that "(m)any of our employees are parents or students who are looking to fit flexible, paid work around childcare, study and other commitments.” (ibid.). Perhaps unsurprisingly, she offers no substance for this assertion when, in fact, the evidence shows that precarious work has a variety of negative consequences for most workers.

Below I present some of this research and end with a wider discussion of the issue. Following the broader theme of this blog, I reflect on the injustice of zero-hour contracts and discuss how they are indicative of the wider moral deficiency of the current form of capitalism.

First, here is a flavour of some of the vast quantity of literature on the relation between precarious work and health and well-being:

·         A cross-national study of casual and non-casual workers in OECD countries found that the former reported more health complaints and a poorer work-life balance than the latter (Bohle et al. 2004)

·         In a comparison between six labour market groups, Virtanen et al (2003) found that those on ‘atypical’ contracts (characterized by insecurity) were second only to the unemployed in terms of poor self-rated health, disease and depression.

·         In other instances, it has been shown that poor quality/precarious work can actually be worse for health and well-being than unemployment (Bambra 2011, Butterworth et al., 2011)

The following studies reveal something about the nature of the relationship between precarious work and family and social life:

·         Bohle et al. (2004) show that disruption to family and social life is markedly higher amongst casual workers.

·         More specifically, Artazcoz et al. (2005) find that precarious employment affects whether men and women decide to remain single, cohabit or even have children.

·         Le Bihan and Martin (2004) find that unpredictable and non-negotiable working hours typically lead parents to depend on informal childcare arrangements, i.e. grandparents and friends (contrary to claims by the spokesperson from McDonalds that zero-hour contracts are helpful for parents in arranging childcare).

·         Lastly, the qualitative effects that casual working conditions have on family life can be seen quite poignantly in the following interview with a mother working under such circumstances:

"We do not have such a thing as a typical day. This week has been the first one when we have had some regularity at work. Actually, after the birth of my son, we haven’t had any routine . . . I have normally three different shifts and I haven’t had a permanent contract. This has meant that I never know when they call me for work. I can’t, for example, tell my son in the morning whether he will have to go to the day-care centre that day or not.” (ibid).

Employees on zero hour contracts lose out in two ways. Not only are their hours unpredictable, they are also often non-negotiable. Thus, as one contract from the fast food retailer Subway shows, employees are ‘in debt’ to their employer:

"The company has no duty to provide you with work. Your hours of work are not predetermined and will be notified to you on a weekly basis as soon as is reasonably practicable in advance by your store manager. The company has the right to require you to work varied or extended hours from time to time." (Guardian, 2013, emphasis added)

Noting the sections in bold above, it is clear that the company is dictating an employment contract which is beneficial to them from the perspective of maximising efficiency and profit-making (through keeping staff costs low/in line with managerial preferences). Read in this way, the language of the ‘zero hours employer’ is symbolic of the uncompromising nature of modern capitalism. It is assumed that efficiency trumps all, regardless of social or environmental costs. Calls for an end to zero hour contracts must therefore be welcomed as they pose a fundamental challenge to the value base of our current economic system.

Disability and Inequality in the UK

‘Ensuring fairness’ has been the slogan for the moral crusade which the UK Coalition government has been embarking on in its policy of welfare reform since its ascent to office in 2010. So far, draconian measures have been implemented with relatively little resistance. Undoubtedly this is because – as its leaders know, see here  – the British public is largely on its side. They are sceptical about the benefits system, all too eager to differentiate between ‘deserving’ and ‘undeserving’ claimants.

A frequent group labelled ‘undeserving’ are the 2.5 million claimants of sickness benefits. These are perhaps the most diverse body of welfare recipients, comprised of a wide spectrum of people with a plethora of health problems of varying severity. Below I present some facts on disability and social security in the UK and suggest arguments which those on the Left may use to overcome the dilemma between public perceptions of the ‘deserving’ and ‘undeserving’ sick.

The ‘deserving’ sick

Many recipients of disability benefits are extremely sick, with fluctuating conditions which would not be tolerated by any employer. This makes it impossible for them to work, thus making them entirely dependent on state and/or family support. For these individuals, not only do they need income replaced that would otherwise be gained through work, they also require additional funds to meet the costs associated with being disabled.

An analysis by Zadia and Burchardt (2003) shows the significant financial penalty on those with disabilities, which increases dramatically with severity of impairment(s). This ranges from 11% of extra costs in cases of the lowest severity to 69% in the highest. The first argument that the Left must consistently make is that there is a moral obligation for a civilised society to genuinely ensure that people who are sick have an adequate income to live on.

The strength of this argument must not be underestimated. Van Oorschot’s (2006) ‘universal ordering’ of deservingness places disabled people as second only to the elderly in terms of perceptions of entitlement. Indeed, the Coalition is aware of public attitudes on this, repeatedly claiming to ‘protect the vulnerable’. However, while this rhetoric is often banded around, evidence is lacking about the extent to which those with disabilities, and particularly the most severe kinds, are being affected by austerity. The Left must produce and respond to cumulative evidence of the impact of the cuts on those where there can be little to no question about their ‘deservingness’.

‘Undeserving’ claimants

The other side that the Left must wrestle with is how to deal with those on disability benefits who the public consider less ‘deserving’. Undoubtedly this is the greater challenge, as it is currently being monopolised by the Coalition government as a way to drive forward its reforms. Those whom the public are likely to distrust might include people reporting mild/moderate depression, back problems or other less severe or constant conditions.

First, it is important to establish that public concerns are not unfounded. A 2002 survey of Incapacity Benefit claimants found that only one third of adult males felt they could do no work at all (Beatty and Fothergill). Other surveys and qualitative studies reveal similar results (e.g. Alcock et al., 2003, Beatty and Fothergill, 2005). It is therefore unhelpful and counter-productive for those seeking to defend social security to deny that there are people on sickness benefits that should be at work. This does not reflect reality and does nothing to counteract public perceptions.

Rather, a robust argument ought to be constructed about the role of labour market demand in fuelling high and rising sickness benefit costs. The evidence is compelling for a link between claims of sickness benefits and unemployment. For example, Beatty and Fothergill (1997 and 2004) demonstrate that regional variations in claims are concentrated in areas of low labour market demand such as former coalfields, seaside towns and disadvantaged rural areas. The authors describe this as a “diversion from unemployment to sickness”, a rational move as sickness benefits are generally more generous, less intrusive and less stigmatising than unemployment benefits. Similarly, as Baumberg (2011) illustrates, the evolution of a more competitive labour market over the past thirty years has pushed people with work-limiting disabilities - who may otherwise have worked – on to benefits.

In sum, the rub lies in how the problem of the ‘undeserving’ sick is presented and the way in which it is addressed. First, it must not be denied that there are people on sickness benefits that ought not to be there because: 1) the evidence is compelling and 2) wherever possible, we should promote a better life for people than living on benefits. Crucially, however, it must not be drawn from this that people need ‘sticking’ in to work. Rather, the Left ought to promote the right to work and highlight labour market reforms as the best and most humane way to cut the sickness benefits bill. Demand must be stimulated in economically depressed regions and employers must make greater adjustments so that real opportunities are created.

Thatcherism, Spirituality and Public Policy

News of Margaret Thatcher’s death was received with a mixture of grief, relief and in some less tasteful cases, triumph and celebrations. My personal reaction was one of mild interest, veering on indifference. After all, it was surely only a matter of time before this 87 year old woman, whose latter years had been plagued with ill-health, would pass away.

British politicians were quick to make their views heard. The Prime Minister paid tribute to her “lion-hearted love for this country”, whilst the leader of the Labour Party, Ed Miliband, hailed the “extraordinary life and unique contribution of Margaret Thatcher”. There was certainly an air of the Oxford debating club ‘good show old chap’ about the proceedings. In fact, there was only one Labour politician who took the opportunity to say anything negative. Glenda Jackson launched a scathing attack on the “social, economic and spiritual damage” caused by Margaret Thatcher and the enduring legacy of Thatcherism.

Now anybody reading this blog will be all too familiar with the social and economic arguments against Thatcherism: the creation of a vast underclass through rapid deindustrialisation, the enormous growth in inequality and the well-documented negative impact of this on health, well-being and crime (amongst many other indicators) and the creation of an over-reliance on the financial industries which has led to a deeply fractured and unbalanced British economy. That is why it is the third aspect of Ms Jackson’s analysis, the “spiritual damage” caused by Thatcherism, which intrigued me the most and is one which merits further discussion.

Qualitative shifts in society since Margaret Thatcher’s premiership can most easily be observed through surveys like British Social Attitudes (BSA). A snapshot of changes in attitudes over the past 25 years reveals how certain Thatcherite sentiments appear to have become more engrained in popular psyche. An obvious example of this is the hardened approach to the unemployed – a group most vilified under Thatcherism. According to the BSA, in 1983 46% of people thought unemployment benefits were too low and caused hardship, compared to 26% in 2007. Similarly, in 1983 35% thought benefit levels were ‘too high and discouraged job finding’, compared to 57% in 2007 (see here).

Is this what Ms Jackson meant when she referred to the ‘spiritual damage’ of Thatcherism - a hardening of attitudes towards one’s fellow man and a greater tendency to blame the individual for collective failings? Social scientists may be more inclined to describe this as a shift in normative rather than spiritual values and indeed perhaps this was what Glenda Jackson meant. She may have been evoking the idea of ‘spirit’ portrayed in Ken Loach’s recent film “The Spirit of ‘45”. In this sense ‘spiritual’ might have had nostalgic, as opposed to religious connotations and simply referred to the decline of the collectivist impulses of the British people.

However, it is worth considering Ms Jackson’s comments in the context of other societal changes that have occurred over the past thirty years. Research by Professor Michael King from University College London shows that the ‘spiritual, but not religious’ now represents a major strand of public opinion (20% of Britons, see here). What is more, the importance of spirituality has extended for many people to major areas of public life. As the former Archbishop of Canterbury Rowan Williams remarks in his recent book ‘Faith in the Public Square’:

“The spiritual dimension of all sorts of things, from school education to business practice, is recognised more and more seriously” (2012: 85).

Returning again to the question of the spiritual damage that Ms Jackson accused Thatcherism of inflicting, there is in the broadest sense a spiritual argument against the promotion of a more unequal society. Indeed, conversely, the quest for greater equality has long been associated with ethical and spiritual righteousness. Champions of equality like Nelson Mandela stand out as figures of great moral worth. In religious traditions, equality is a value to which people are encouraged to aspire, following the examples of great spiritual leaders like Jesus Christ. All peoples are seen to be created in the image of God possessing souls of equal worth, thus religious followers are called upon to respect others and create conditions in which all can flourish.

I was struck by Robert de Vries’ recent post on Inequalities (see here) about the research into ‘infrahumanization’ – the denying or simplifying of emotional identities of certain social groups (the homeless, poor people, benefit claimants). In ‘spiritual’ terms this could be viewed as an attempt to denigrate the soul of another, thus inequalities of this kind may be seen as an affront not only to the individual but also to God.

But is it really possible for analysts in the fields of social and public policy to engage constructively with such ideas? If so, then why have they not received greater attention? There are undoubtedly many reasons why ‘spiritual public policy’ is rarely discussed. Many public policy analysts sit firmly in the Fabian tradition of using empirical evidence to promote structural change. However, with one in five Britons claiming some form of spiritual allegiance, might it not be time to engage seriously with theological arguments for policy interventions?