The sorry state of welfare

Universal credit – the Tories’ flagship welfare policy aimed at saving money, easing claimants’ transition into work, and simplifying the benefits system by merging six different benefits into one – has hit headlines recently for all the wrong reasons.

As it has been rolled out, the requirement that claimants wait six weeks or more before receiving payment has, reportedly, led to everything from indebtedness to evictions. And the charge attached to the Department for Work and Pensions (DWP) hotline has caused outrage, too.

Last month, Labour put forward an opposition-day (that is, non-binding) motion calling for the roll-out of universal credit to be halted. It passed 229 to nil. Controversially, Tory MPs were instructed to abstain or absent themselves in an effort to avoid a backbench revolt.

It has been widely reported that the DWP helpline costs 55p per minute, which is hardly affordable for the already hard-up. In fact, the cost varies from 3p to 55p on a mobile, and is no more than 9p on a landline. Nevertheless, it became part of a narrative that the Tory government is being grasping and inhumane.

The Archbishop of York described those being bitten by the roll-out as the ‘present-day successors’ of the widows and orphans referred to in the Bible. Labour MP Frank Field, chair of the Work and Pensions Committee, has said the government must ‘avert a Christmas disaster’. Much of this is overdone, similar to over-the-top claims about food poverty and suicidal benefits claimants. But there are still some real problems with universal credit.

Food banks have been reporting increased demand for some time, and rising homelessness has been linked to welfare reform. The Smith Institute has linked the introduction of universal credit with millions of pounds worth of rent arrears in Southwark and Croydon in south London. And according to SNP MP Drew Hendry, 60 per cent of his constituency caseload is universal-credit-related. He has complained of a ‘systematic lack of care shown to those most vulnerable in our society’.

Universal credit has been beset by delays and controversy from the start. And until recently, it has been rolled out in an almost apologetic way – at the rate of five Job Centres a month. This was due to be accelerated to include all new claimants by autumn 2018, so that it would be fully implemented by 2022 to cover an estimated seven million households. (Such is the extent of the problem of welfare dependency.) But it’s looking unlikely that target will be met.

There have been very real problems with the way in which universal credit has been rolled out. And on these issues, there have been welcome signs of retreat, as a result of the pressure exerted inside and outside of parliament. There’s been a u-turn on a cap for housing benefit for social-housing tenants, a reduction on the six-week wait is expected to be in next month’s budget, and the helpline is now free of charge.

But the principle behind universal credit is a good one, and needs to be defended. The architect of universal credit, former work and pensions secretary Iain Duncan Smith, still maintains that it could ‘dramatically change lives for the better’. This ambition, to reform the welfare system and make it fit for the new century, has unfortunately been bogged down in political point-scoring and design failures.

Welfare dependency is a longstanding social, economic and cultural problem. It will take more than a technical fix to solve it. But at least the Tories recognise there is a problem, and are trying to treat benefits claimants like adults. Under universal credit, claimants receive their benefits directly. (Housing benefit, for example, previously went straight to landlords.) Also, it is paid on a monthly basis, like a salary, instead of fortnightly or weekly. Many of its critics, by contrast, think ‘vulnerable’ claimants are incapable of budgeting for themselves.

Virtue-signalling over the needy may shame the government into another u-turn, but it will do nothing to help claimants. What’s more, the rows over universal credit – a policy that, in principle, all parties support – makes it seem more drastic than it is. It is a policy that is argued for in the language of ‘supporting’ the ‘vulnerable’. A reminder that there’s still a much broader debate to be had about the future of the welfare state.

First published in sp!ked

What’s all the fuss with a Universal Basic Income?

There’s something seductive about a Universal Basic Income. A regular, fixed, unconditional sum of money paid to everyone ‘just for being alive’. Trials are taking place around the world – with Ontario, Canada, announcing one earlier this year and Finland having started their pilot in January.

From left-wing radicals to right-wing libertarians, from so-called socialists to the high-tech billionaires of Silicon Valley – it is an idea with a wide and growing appeal. Labour Leader Jeremy Corbyn and his Shadow Chancellor John McDonnell have both said positive things about UBI, the latter setting up a working group to consider it. Mark Zuckerberg (worth $70 billion) and Richard Branson have also given their support to the idea.

Y Combinator, the Silicon Valley tech incubator with Airbnb and Dropbox in its portfolio, is to run a trial in two US States; following an earlier trial in Oakland, California. Company President Sam Altman, boasting a total valuation of start-ups at around $80 billion, has wider ambitions: ‘Eliminating poverty is such a moral imperative’ he has said of the initiative.

There is long-standing support for UBI. Sir Thomas More in his Utopia (written in 1516) has his narrator say: ‘it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse’. In The German Ideology, written by Karl Marx in 1845, he looks forward to a new society much like the advocates of UBI do:

… where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic …

There are two important points of difference though between historical advocates of a new society; and today’s champions of a UBI. First, the old idealists had a broad vision of creating a better society than the one they lived in. Those who argue for UBI tend to be driven by fears and anxieties about the world of work, and constrained by a culture of limits that inhibits discussion about how society and the economy might be organised differently. Second, historical materialists like Marx, went beyond More’s utopianism – literally nowhere – to situate their ideals in the real world. It is only because a future society would take care of ‘the general production’ that the individual could be liberated from the daily toil. Today’s advocates of UBI have no plans to expand ‘the general production’ on which such a handout must surely depend. Indeed, many of those arguing the case for UBI are anti-consumption and would rather rein in the general production in the name of a future more ‘sustainable’ than the present.

Advocates though, as I say, are various and have put forward various arguments for the introduction of a UBI. Some are practical – it would be cheaper to administer than the welfare state it is claimed, though it would be impossible to incorporate housing or childcare costs argue others, and depending on its generosity would have implications for immigration policy too. Guy Standing founder of Basic Income Earth Network, wants to reduce inequality and tackle job insecurity and arrest what he describes as the ‘drift to fascist populism’. The Finnish trial is meant to tackle unemployment and avoid the disincentives associated with the welfare trap; though there is trade union opposition, interestingly enough, on the grounds that the introduction of UBI will itself be a disincentive to work. In the context of the UK, changes in the economy, particularly the shift to self-employment and the emergence of a gig economy peopled by a so-called ‘precariat’, make the current welfare arrangements obsolete, it is argued. People tend to drift in and out of low paid work too quickly for it to accommodate to their constantly changing circumstances. In the US, the debate is slightly different but again driven by anxieties about the economy, in particular fears that automation will destroy jobs (keying into wider concerns about national decline).

I wouldn’t ordinarily put Joe Biden, former Vice President, in the company of More and Marx. But as an opponent of Universal Basic Income, next to those who advocate a handout for all, he is the more visionary sounding. ‘Silicon Valley Executives’ he says, are ‘selling American workers short’. Having a job is ‘about your dignity. It’s about your self-respect. It’s about your place in the community’. In this way, ‘[a]ll of us together can make choices to shape a better future’ he says, putting forward at least the idea that people can play an active role in creating a new society. Whatever the practicalities of introducing a UBI – and even the most sympathetic struggle to convince that it can be fully implemented or afforded – its desirability is surely in doubt.

There is, or at least there should be, a formidable moral case against UBI – as a disempowering and ultimately self-defeating policy idea that treats people as passive participants in an elite experiment – one that can only undermine people’s sense of themselves as self-reliant and responsible members of the community. That self-respect that Joe Biden talks about is the foundation of the very idea of being a citizen and a productive member of society. But there are also political arguments that are not being had, about the state of the economy, about challenging low horizons and demanding more of our political class and of employers. UBI has become, in this way, a substitute for coming up with a coherent set of ideas to address today’s social and economic problems. What could in different times be a perfectly good idea has instead become a distraction from more pressing matters.

Based on a speech at Battle of Ideas 2017

Does ‘Good’ Work Pay?

After the shock of the General Election result, the horrors of Grenfell Tower, and against the backdrop of the ongoing Brexit negotiations and Cabinet infighting – politics has once again been upended. The opposition have smelt blood. First on the list of demands has been an end to so-called austerity, not least for hard-done-by public sector workers. Jeremy Corbyn has accused the government of exhibiting a ‘lack of touch with reality’ in its refusal to pay public sector workers more money. Those brave fire-fighters who fought the terrible blaze in Kensington surely deserve more? As do those doctors and nurses working tirelessly as the NHS collapses under the strain of the sick. Those greedy tube-workers might drive us to distraction with their constant striking, but surely we can find more for demoralised teachers now that schools look like they might not be starved of funding after all?

This might sound fair enough. Badly paid public sector workers do deserve to be paid much more. And now is a good time to wring concessions from a government struggling to command authority in parliament. Northern Ireland has already benefited from the Tories’ disarray with the government’s promise to meet the costs of abortion for those women still forced to travel to England; and there’s the £1 billion bung that will fund much needed infrastructure in the province – something the government’s critics would welcome if it wasn’t a concession won by the much maligned DUP. The trouble is it is one thing to call for an uplift in public sector pay when it is capped at a miserly 1% and – for all your talk of the prime minister lacking a mandate – you remain leader of a divided opposition. What about the majority of the British public who don’t work in the public sector? How much should they get?

What about those working for the BBC? Graham Norton and Claudia Winkelman arepublic sector workers but, far from defend them, the Labour leader has called for pay restraint. ‘We have said again and again that there is a problem with excess pay and we need to address that’, he says. Indeed the Labour manifesto proposes a cap of its own that will slash pay so that nobody can earn more than a ratio of 20:1 of the salary of the lowest paid employee. Having a go at Gary Lineker (£1.8m) isn’t the same as supporting the down-trodden. On the contrary. Corbyn’s support for what he has previously referred to as a maximum wage does nothing to improve anybody’s standard of living. Indeed it makes that a much less likely prospect by undermining the logic for anybody demanding more. Why set a limit at all? Why can’t we all be rolling in it like Chris Evans (£2.2m) or – if that is too outlandish – why can’t the average worker at least aspire to be on a par with those wrongly-resented London Underground workers?

If you’re thinking that this is just an old socialist exhibiting the politics of envy you’d be wrong. Matthew Taylor, chief executive of the RSA, and former head of the No.10 policy unit under Tony Blair, was commissioned by the government to write (and has recently published) the Good Work report. ‘All work in the UK economy should be fair and decent with realistic scope for development and fulfilment’ it says. People should be treated fairly and have the opportunity to progress; work should make them feel happy and contribute to the wider ‘wellbeing’ of society too. ‘Pay is only one aspect in determining quality work’, says the Review, ‘for many people fulfilment, personal development, work life balance or flexibility are just as important’. No doubt, but don’t be fooled by the soothing tone and the downgrading of the crude business of making money.
More commonly known as the Taylor Review, it is largely concerned with re-‘aligning’ people’s diverging ways of making a living. But here too the alignment is in a downward direction. Those who have struck out on their own and started their own businesses, for instance, are not to be encouraged but reined in for fear that their efforts are not sufficiently exploited by the taxman. Taylor is alarmed to discover that increasing numbers of workers are getting above their station and imagining themselves to be ‘genuine’ business-people. Such enterprising and initiative-taking upsets the plans of Taylor, and others, with designs on the world of work; and threatens the budget for the welfare system which must be propped up at all costs.
The truth is that Taylor is far more at home coming up with ways to protect the ‘vulnerable workers’ of the gig economy than he is backing the ambitions of ‘bogus’ non-worker workers with some get-up-and-go about them. It is, of course, the case that a minority of people are struggling on short-term casual contracts that suit their employers more than they suit them. But this one-way flexibility that some experience is not an argument for more top-down restraint – the state is no guarantor of a better deal for workers, vulnerable or otherwise. Those on the receiving end need to organise and fight – with a bit of solidarity from the rest of us – for a much better deal, whether that’s more pay or better conditions.

The miserable levelling-down and equality of low expectations offered up by Corbyn and by Taylor should be rejected. We all deserve better than that.

First published in Huffington Post

Inequality? What Inequality?

First published in Huffington Post

If you’re born poor, you will die on average 9 years earlier than others. If you’re black, you’re treated more harshly by the criminal justice system than if you’re white. If you’re a white, working-class boy, you’re less likely than anybody else in Britain to go to university. If you’re at a state school, you’re less likely to reach the top professions than if you’re educated privately. If you’re a woman, you will earn less than a man. If you suffer from mental health problems, there’s not enough help to hand. If you’re young, you’ll find it harder than ever before to own your own home.

This is what our new Prime Minister, Theresa May, said before walking through the door of Number 10 Downing Street last month. Jeremy Corbyn, in a speech launching his defence of the Labour Party leadership, had this to say:

The injustices that scar society today are not those of 1945 … Want, Squalor, Idleness, Disease and Ignorance … And they have changed since I first entered Parliament in 1983…Today what is holding people back above all are … Inequality… Neglect … Insecurity … Prejudice … and Discrimination …

And his opponent in that contest, Owen Jones, said he would rewrite the party’s Clause4 ‘to put tackling inequality right at the heart of everything that we do’.

So is inequality a spectre (to misquote Karl Marx) that is haunting the UK?

According to Tom Bailey, who I have invited to speak on the topic, ‘The past few decades have seen a dizzying amount of the world lifted out of poverty’. This is a consequence of economic growth, he argues, in places like China where 500 million people who were living in poverty are no longer doing so. As a result global inequality has actually fallen. So what is meant by inequality today? If we are increasingly equal and people are being pulled out of poverty at unprecedented rates, why are leftists and conservatives alike so obsessed with it?

How desirable, even, is equality? In the UK we were at our most equal in 1979, after four decades in which the gap in earnings got progressively narrower. At the outbreak of the second world war just over a third of the national income went to the top 10% of the population. Forty years later they accounted for just over a fifth of the national income and the poorest were a bit better off than they were before. While this may sound like a comparative utopia it is perhaps worth remembering that this was also a time of profound crisis and division in the country. The world economy was in turmoil and the British state was about to stamp on striking workers and rioting inner-city youth.

More to the point for all the focus on relative poverty by campaigners, we are absolutely better off now than we were back then. Even the poorest are nowhere near as poor as they were. This may seem an obvious point but it is continually lost on those who seem to think we’ve never had it so bad.

But what of gender inequality in the workplace? The ‘reviewing’ of Kevin Roberts’ position as Chairman of Saatchi and Saatchi for saying it isn’t a problem is surely evidence enough that it is? Well, no. As Joanna Williams argues, ‘the gender pay gap is dead’. If you compare like with like, the so-called glass ceiling is a myth. The assertion that women are getting a bad deal at work is a distraction from what really does hold them back – a lack of affordable childcare. The misplaced focus on women’s fast-diminishing inequality in the workplace also ignores the longstanding decline of traditionally male-dominated industries and the rise of the more female-friendly service sector in its place. The UK and indeed the world is less sexist than ever. The leading role of women in some of the planet’s most powerful jobs, from Christine Lagarde and Hilary Clinton to Theresa May and Nicola Sturgeon, should make that obvious.

That’s not to say all is well. Far from it. But rolling out the same old rhetoric about capitalist excess, exploited workers and untold misery – when capitalists have never been so risk-averse, unproductive and keen to virtue signal; and the ill-effects of their system so mitigated by state intervention – makes no sense. We are living through a period not only of longstanding economic stagnation but also of political cluelessness about what to do about it. It is surely more important – especially now, post-Brexit, when the political class is running for cover – that we have a national debate on how we go about building a more prosperous future, not worrying over the dividing up of what little wealth is being generated now.

Poverty pay: the political elite says this is as good as it gets

First published in International Business Times

Not so long ago support for a minimum wage, much like nationalisation of the railways and unilateral disarmament, marked you out as a state socialist. Today the Living Wage is the new common sense. While there is some opposition from employers, it is striking that the government and the bulk of the political establishment only quibble over the level at which it should be set.

It currently stands at a recommended £7.85 an hour, or £9.15 an hour in London. The National Living Wage, to be introduced by the government in April, will be a little less at £7.20 for over-25s rising to £9 by 2020.

While no-one had heard of zero-hours contracts until recently, taking a laissez-faire or state interventionist stance on the labour market would once have had you fall either side of a clear political divide too. No longer. Today, all are agreed that what amounts to casual working needs more or less regulating.

“Those exclusive zero-hours contracts that left people unable to build decent lives for themselves – we will scrap them.” That wasn’t Red Ed or Corbynomics: that’s David Cameron.

While the critics might want him to go further and ban them outright there is a consensus. The main political parties are opposed to the worst excesses of ‘poverty pay’, and agree that something must be done about it. But is this really such a good thing? It seems to me that this statist meeting of minds is shaped less by the fair-mindedness of the political elite than by the self-imposed limits of our anaemic political culture.

Clueless about solving the bigger problems, and unable to inspire anything but contempt, politicians desperately jostle around for easy headline-grabbing interventions like these. For instance, Culture Secretary John Whittingdale has told Premier League football clubs they should pay their staff a Living Wage. “It would,” he says, “be difficult to argue they can’t afford it”.

Meanwhile, Costa has announced it will pay its staff a Living Wage slightly more generous than the national one. But why stop there? Living standards, especially for the poorest, have plummeted in recent times as wages have fallen and prices have risen. Is this really the best they can do?

It is a depressing sign of the times that such gesture politics can be spun as good news. In the absence of capitalist dynamism to raise people’s standard of living, this is all there is. There is no appeal to trickle-down economics anymore: an optimistic if not unreasonable belief that we all benefit as the economy grows.

Baristas are supposed to be happy with their new minimum (sorry, living) wage rather than imagine a world in which they might live like barristers or millionaire footballers. Instead of ambitions for more and better, the adolescent cry of “it’s not fair!” can be heard.

In a recent poll of students by job site Glassdoor, a third thought zero hours contracts were exploitative, a quarter wanted them banned, and over a third of those offered one turned it down.

As Diarmuid Russell at Glassdoor said: “These findings are intriguing, given these contracts allow students to move in and out of the job throughout the year, and potentially pick up hours which fit around studies and holidays.”

Quite – you might expect those who never tire of telling us about their spiralling debts to be a little less picky.

It isn’t just students convinced of their own victimhood. A chef who used to work for Hugh Fearnley-Whittingstall was recently in court having being apprehended by police at a drug dealer’s house. According to his defence lawyer ‘it wasn’t him what did it’ – it was the zero-hours contract he signed with River Cottage. “As a result [he] was suffering from depression and sadly relapsed into heroin use,” it was claimed.

So as well as the notion that the best the poorest can hope for is to be a bit less badly off, is the patronising idea that some of us (chefs and students included) are so fragile that we couldn’t cope with a zero-hours contract anyway. While critics rightly argue that such employers are subsidised by us all in the end as those who work for them have to rely on welfare top-ups to their meagre incomes, this is only part of the problem with the official narrative on poverty pay.

What matters more is that the entire political elite, convinced that the poorest sections of the working class need protecting from the inequities of a flexible labour market, are telling us that this is as good as it gets.