Politicians must understand Welfare needs reform

Politicians should not back welfare reform because of ‘parity’, but because the current system is clearly unfit for purpose. Instead, we need a welfare system which actually does what it is set up to do; which enjoys broad public support including those who contribute to it as well as those who benefit from it; and which is part of a package of reforms needed in order to maintain our standard of living for generations to come – the others being economic, health and educational reforms which are in devolved hands.

Let us start with the basic question: what is the purpose of the welfare system? Its founding document is the Beveridge Report of 1942, which was also the basis of the NHS. It was designed to tackle the five ‘Great Ills’ of squalor, ignorance, want, idleness and disease, and Beveridge wanted a comprehensive system free of ‘sectional interests’ (thus he opposed means-testing). So it would be a contract between the State and the individual (in which the State would guarantee a safety net but the individual continued to have responsibilities), it would command widespread public support (interestingly Labour was the last of the three main parties to adopt it, but all eventually did), and it would be genuinely ‘revolutionary’ (i.e. built to last generations, regardless of short-term economic conditions).

The current system performs poorly on every count. Where Beveridge proposed a system providing a ‘safety net’, the suggestion now is that people see it as a ‘lifestyle choice’ (in fact, I would suggest instead that the issue is too many children growing up into a ‘dependency culture’, where a life away from the benefits system is seen as an unattainable goal). Where Beveridge warned against ‘sectional interests’, debate is now split between the ‘right’ (suggesting that everyone on benefits is a feckless scrounger) and the ‘left’ (suggesting that everyone on benefits is in desperate need) – neither is the case! Where Beveridge specifically cautioned against means-testing because it would cause a ‘poverty trap’ (where people were better off financially on benefits than off them), the current system has created such traps right across the country, with many people unable to afford to work (often because of costs such as housing and childcare they would suddenly incur).

It is small wonder, therefore, that the welfare system does not enjoy widespread public support. All main parties in UK politics are committed to reform. The ‘Great Recession’ has only caused greater anger among harder-pressed taxpayers who perceive themselves to be paying towards a system which seems designed to create poverty rather than tackle it; and also notably among those currently receiving benefits who find they cannot work and thus cannot benefit from the social interaction, self-confidence and skills development which work would bring them. Squeezing the taxpayer for more money towards a system which fundamentally does not work is a legitimate political concern; and seeking to maintain a system which demonstrably traps people in poverty is indefensible.

We would all benefit from getting more people out of poverty and dependency – something the current system actively hinders in many cases. If we are to create the wealth we need to maintain the standard of living we have come to expect, we need more adults in work, a healthier population, and fewer young people lacking even basic skills. So having ‘more people economically inactive’, ‘poorer mental health levels’ or ‘worse education outcomes at the bottom end’ is not an excuse for maintaining the current welfare system, but rather an imperative for additional economic, health and educational reforms – areas which are all in devolved hands.

Current welfare reform proposals are not perfect and we should look carefully at how we implement some aspects. However, this should act not as an excuse for inaction, but as a spur towards broader reform. Proposed changes to employment law, the on-going ‘Compton Review’ of healthcare, and this week’s announcement of investment in basic skills teaching are all essential parts of the package – and so is reforming our welfare system to make it fit for purpose.

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