Sunday, 20 March 2016

Grinding poverty

There have always been two different approaches to poverty. Some have seen poverty as a product of financial inequality, to be mitigated by additional resources, mainly welfare payments. Others have seen it as an indicator of insufficient inclusion or access to opportunities, in particular opportunities brought about by work. The first approach is largely driven by indignation about differences of means, whilst the second feeds on philosophies rooted in personal responsibility. The former leader of the Conservative Party, Iain Duncan Smith (IDS), who has resigned from his post as Work and Pensions Secretary on Friday was a believer in the second approach. Having been booted out by his party colleagues from the leadership post in 2003 he re-invented himself as a fighter against poverty and hopelessness. He founded the Centre for Social Justice, visited the Easterhouse Estate in Glasgow and, over the next 8 years, formulated a sophisticated welfare reform strategy. In 2010, being appointed Work and Pensions Secretary in the first Cameron cabinet, he implemented wide-ranging welfare reforms designed to tackled worklessness and poverty of working families. His efforts culminated in the announcement of the National Living Wage last year which will lift income from work beyond the level of means that can be obtained through out of work welfare payments. It crowned a long and distinguished career of a compassionate conservative. Yet, it was not always like this.

Vision for change - IDS at the Easterhouse Estate in Glasgow in 2002.
Foto Murdo MacLeod/The Guardian
Poverty has been an object of political reform ever since the industrial revolution created winners and losers in the world of work. In times of full employment until the 1970s, it was largely seen as a consequence of low wages. As the West was hit by large scale structural unemployment, poverty became a by-product of worklessness as well. Ever since these momentous years in the 1970s, the debate about poverty has centred around sufficient welfare payments to those in need, giving them the means to live a decent life. The watchword was dignity.

However, as it became clear that increasing welfare payments contributed to a fundamental change in people's attitudes towards work, reformers changed tack. They began to argue that, whilst little could be done to change people's willingness to work, the consequences of worklessness could, and should be, mitigated through ever higher welfare payments. In particular, it was argued, children of parents who were out of work required additional resources. The main avenue to eradicate child poverty was increasingly perceived to be higher out of work welfare payments to parents, reinforcing a vicious circle in which parents were incentivised to demonstrate to welfare officers how poor they were to gain access to additional resources. A tragic spiral of low levels of personal responsibility, de-legitimising work as a source of income and welfare as a legitimate replacement for income through employment ensued that eventually led to some British families in receipt of hundreds of thousands of pounds every year. The logic was undeniable. Once need was identified, adequate welfare had to be provided.

IDS was not the first person to challenge this logic, but, looking back, it is hard to imagine today how difficult it once was to articulate a different strategy. The impetus for change however did not come from this country, or from conservative politicians, but from social reformers on the left in the US. They recognised the link between out of work payments, behaviour and increasing welfare needs. In a way, they argued, the missing component in eradicating poverty was personal responsibility. What was needed as a hand up, not a handout, echoing the slogans of radical social reformers in the 19th century.

When coming to office in 1992, President Bill Clinton embarked on fundamental welfare reform, based on the principle of incentivising work. Other countries followed suit, interestingly mainly socialist and social democratic governments. In Britain, significant welfare reform was judged a shot too far within the Blair and Brown Cabinets, although progressive reform minded Labour politicians like James Purnell articulated the need for change.

The resignation of IDS on Friday ended one of the most effective welfare reforms this country has seen since the introduction of the welfare state under Clement Attlee. IDS changed for the better the references for the debate in this country. We now speak of the need to support people to get into work, assess their fitness to work, instead of patting them on the back and sending them home with a welfare cheque. This has undoubtedly created frictions and difficulties. Changes to welfare entitlements have been fiercely resisted by those habituated into a life on the dole and the proponents of the status quo.

However the main parameters of the national debate are now around how to sufficiently incentivise employment. And it is IDS's contribution to have brought about this shift.


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