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.

What has the coalition achieved?

The coalition government under David Cameron has had a rough time recently. Surveys show that key ministers are deeply unpopular amongst the British people and the poll figures for both parties, the Conservatives and the LibDems, took a beating since the Rose Garden photo op in 2010.

Happier times! Cameron and Clegg in the Rose Garden of Number 10 in 2010

There have also been rumblings amongst Conservative members of parliament about the leadership qualities of David Cameron, prompted by a perceived advantage given to LibDems in key policy areas. Nick Clegg and his parliamentary colleagues, so the complaint goes, determine policies to a far greater extent than they should. Given the widespread disenchantment with the coalition one might be forgiven to ask: what is the point of the coalition? Has it achieved anything so far?

The most effective opponent of the coalition government is not Her Majesty's Opposition, yet perhaps time itself and the tendency of all electorates to indulge in selective memory. It is easily forgotten how radical this government actually has been, much to the consternation of some former Labour ministers who had similar plans for transformations of public services, yet either never got round to implement them or were blocked by Gordon Brown.

Just reviewing a list of recent reforms reveals the magnitude of the policy programme of the current government. Fundamental change and reforms have received legislative approval in education, health, constitutional affairs and welfare.

Take welfare for example. James Purnell was the one but last Labour Welfare Secretary and his plans for welfare reforms approximated closely those of the current postholder Ian Duncan Smith. When in power, Labour had a keen awareness that the current trajectory of welfare spending was unsustainable in the long term. Ian Duncan Smith, starting in 2010, implemented a radical shakeup of the welfare and benefits system which, for the first time in more than 30 years, involves the re-assessment of benefit recipients for payments.

Despite some criticism from disability rights organisations the reforms seem to be largely in tune with the views of the British public and there seems to be widespread consensus that benefit payments require better targeting at those in need. Ian Duncan Smith carefully built the case for reform and is about to implement it, ceaselessly reminding reform opponents that simply continuing to increase welfare expenditure is not an option and may exacerbate inbuilt injustices.

In other words, he managed to locate the current reforms in the wider context of equity and justice, as well as present them as largely continuous of previous postholder's intentions. Similar feats have been pulled off by the Education Secretary Michael Gove, who argued that his education reforms are in essence an extension of the academy programme started by Labour under Tony Blair.

Yet, how truly radical the policy agenda of this government has been is only revealed by looking at those areas that have little resonance with the British public. It is in matters such as constitutional affairs that investing political capital rarely pays off and hence little progress is often made over decades. Shortly after coming to office, the coalition legislated for fixed term parliaments which removed the prime ministerial prerogative to set the date of the general election, something not even Labour was ready to give up.

After only two years, the record of this coalition government compares positively with Tony Blair's first term, even though he always regretted not having adopted a more radical approach when coming to power. Yet as selective as collective memory might be, it is also usually arriving at a more balanced appreciation of achievements as time goes by. John Major's government, though deeply unpopular at the time, might be a case in hand. Major's term in office is now seen as laying the foundation for the unprecedented economic recovery in the second half of the 1990s creating the space for the expansion of public expenditure under Labour. In this sense, Cameron and Clegg may have their best time still ahead of them.

How to reform welfare

The government has announced today that, if the Lords pass amendments to the welfare reform bill currently going through parliament, they will send the bill straight back to the Lords without making any changes. In other words, the government is digging in its heels. In media interviews Ian Duncan Smith, the Work and Pensions Secretary and ministers displayed an unprecedented amount of confidence over the weekend that they will get their way. Judged by the outpour of criticisms in the past couple of weeks from disability rights organisations and other charities, the government’s certainty that they will get their way is simply astonishing. What happened?

A couple of things have happened. First, Britain has seen a gradual but steady shift of opinion from the left who would think of benefits as a way to alleviate deprivation and address inequalities, to the right, who see benefits as a safety net when anything else has failed. 

On top of that, Conservatives, in particular Ian Duncan Smith, has used a reform strategy that is nothing short of smart. If you remember, after his failed leadership of the Conservative Party, IDS became the chairman of the Social Justice think tank, which set about to investigate in detail the issues around poverty, worklessness and benefits. 

His hard work on analysing the complexities around worklessness has led to the formulation of a radically different approach to the ‘get on yer bike’ call by previous Conservative governments. 

IDS’s welfare reform has some interesting political tactics. First, present the issue of welfare reform as one that centres on the interests of those on benefits. The debate about the deleterious effects of worklessness on families and children is typical for this strategy. 

Second, never use immoderate language but acknowledge the complexity of the issue and the personal dimensions of worklessness. This ties in with a public recognition that moving people from unemployment into jobs requires personalised support. 

Third, and most plausibly, make an argument about the link between work and the level of benefits as an incentive to work or stay on the dole. IDS has throughout the debate stuck to these parameters of the strategy. 

All this means that there are precious few serious politicians or political commentators who argue that things should stay as they are. Apart from left doomsayers, such as Polly Toynbee, there seems to be a broad consensus in the population that the cap on benefits is the right thing to do. 

Most interestingly, as the latest polling suggests, there is even a large majority amongst Labour supporters who think that the government is justified in pushing for a benefits cap of £26,000. The poll results also suggests that there is a sizable minority amongst Labour supporters who would like to see this limit to be LOWER than the government wants it to be. 

In addition, the welfare reforms have benefitted from the fact that the Labour party has tried too in its last years in government to reform the benefits system and that there is a broad consensus that the benefits system is hideously complicated which invites fraud and error on a large scale. 

The previous Work and Pensions secretary James Purnell (Labour) probably doesn’t believe his eyes. I am pretty convinced that his proposals (had he been allowed by Gordon Brown) wouldn’t have looked much different to those of the current government. 

All in all, this means at least one thing: welfare reform is a win win for the government. That is why IDS can afford to bat away any calls for changing this legislation that may crop up in the Lords this afternoon. Whatever happens in the upper house, he will get his bill through. He knows that the British public supports him.