Towards a real welfare debate

From Scope NI

The biggest problem with the “welfare debate” in Northern Ireland is that we are not having one – at least, not in any reasonable public sphere.

What we are having is a clash, based purely on labels, between those who simply don’t trust the Tories on one hand, and those who believe all those on benefits are scroungers on the other. If we are serious about a welfare system which works, we need to challenge ourselves to move beyond pre-existing political partisanship.

To promote a useful debate, we need first of all to ask the basic question of what a welfare system is for; then we need to ask how the challenge of achieving that may have changed over the years; and then we need to look at how we may achieve the optimum outcome specifically in Northern Ireland. This is to be done quite aside from the context that, realistically, Northern Ireland’s system has to be very close to Great Britain’s in order for it to be affordable via subsidies from the UK exchequer (an arrangement known as “parity”, which requires welfare and taxes to be similar across the UK).

The welfare system in its modern form dates back to the Beveridge Report, by Liberal economist William Beveridge, in 1943. This identified five “giant evils” in society – squalor, ignorance, want, idleness and disease – and proposed dramatic changes in social policy to tackle them. These included (in practice) the introduction of a National Health Service free at point of access, state-sponsored legal aid to ensure access to justice, and a welfare system to act as a safety net. These were all introduced by the post-War Labour government in Great Britain, and (although not immediately in all cases) subsequently by the Unionist administration in Northern Ireland.

Fundamentally, the purpose of Beveridge’s report was to tackle poverty; and the purpose of his welfare system was to provide a safety net. The question in the 21st century, therefore, is does the welfare system provide a safety net to help tackle poverty? We need to be clear that the answer to this, conclusively, is “no”.

The current UK Work and Pensions Secretary (with responsibility for welfare) is Iain Duncan Smith, whose previous role was as Founder and Chair of the Centre for Social Justice. This think tank, established in 2004, came to not dissimilar conclusions to Beveridge six decades earlier. For Beveridge’s “Great Evils” it identified five key drivers of poverty – family breakdown, worklessness, educational underachievement, indebtedness and addiction. Other issues, such as poor housing or low income, are of course associated with poverty but, the Centre argued, they were symptoms rather than causes – and the aim was to tackle the causes.

My own work with the Centre in Northern Ireland found that there was in fact little difference in Belfast from the rest of the UK, and particularly little difference from post-industrial cities such as Liverpool or Glasgow. Certainly, issues such as social segregation and the nature of devolution mean that the interventions required may need to be differently administered, but the fundamental drivers of poverty were the same. (I personally found little evidence, however, for identifying “family breakdown” as a driver of poverty; it seemed to me there was an inherent bias towards arising from the Christian ethos of the Centre’s founders in that regard.)

Tackling these drivers of poverty is not something a welfare system can do alone, nor is it the sole reason for the system. However, it is fair to ask whether the system is helping as much as it could. Plainly, it is not. Why is this?

By 2010, the system did almost nothing to tackle worklessness, educational underachievement, indebtedness or addiction at all. Both by design and culture it had come to be something which compensated people for being in poverty, rather than providing them with a helping hand out of poverty. There were two particular deficits in the system which stood out for me – in many cases it actually penalised people for going into work, and it was far too complex. It is worth investigating these further.

Work is the fundamental route out of poverty. It is commonly stated that the majority of those in poverty are in work, but there are two flaws with this. Firstly, it suggests “poverty” is the same as “low income”; secondly, it misses the point that the vast majority of those in work do not experience poverty (however defined), whereas the vast majority out of work do. Work is about far more than income – it is about social networks, self-esteem and further opportunities. Work, therefore, is to be encouraged – yet, in a huge range of circumstances, the UK’s welfare system was designed in such a way that so many benefits were lost by those entering the workplace that doing so actually causes an overall loss in income. None other than the Massachusetts-based Institute for Healthcare Improvement condemned the UK welfare system for exacerbating mental health problems precisely because it traps people in a cycle of low self-esteem with no way out through the workplace, because accessing employment actually comes at a cost in many cases. That is a nonsense and it was clear in 2010 that it was long past time for reform.

An overly complex system also causes extreme difficulty and stress to the very people it is supposed to help. The vast array of credits, top-ups and rates developed over the years led to genuine confusion about what people were entitled to. In my own advisory capacity I frequently meet people who come to me about potentially accessing one benefit who are in fact missing out on another benefit or rate to which they are entitled, because they had found the system bewildering. On top of that, many people reliant on benefits are also experiencing low self-esteem which limits their ability of even desire to spend time working out what their entitlements are. Clearly, these different layers of rates and benefits are causing too much confusion and actually cost people support to which they are fully entitled. By 2010 it was clear that this too had to be reformed.

On top of all this theory, we cannot ignore one other obvious point concerning the whole culture of the welfare system – there is a culture not of supporting people, but of trying to catch them out. The assumption is almost that any applicant is a potential fraudster and that, thus, any application for any benefit should be treated with suspicion. The whole thing turns into a paper trail, when the system is supposed in fact to be based on basic humanity and trying to provide a safety net when people need it. This adds, of course, to the complexities and the stress involved. Actual fraud happens of course, but rates are in fact extraordinarily low, and in fact this is even more the case in Northern Ireland than elsewhere in the UK. This culture too, therefore, needs to be reformed.

If the welfare system is designed to provide a safety net to those who need it as part of tackling the key drivers of poverty, it was plainly not working in 2010. The reforms passed in Great Britain in 2012 include new “work assessments” and “tapers” designed to ensure those who can access work can do so without financial loss, while also ensuring those who cannot are properly supported; “Universal Credit” is designed to simplify the system and provide direct support where it is required; “Personal Independence Payments” are similarly designed to provide more support to people in greater need (and, implicitly, less support to those in lesser need). As with any reform, there are of course winners and losers but that is the whole point – the reformed system is more targeted on providing interventions which will have real outcomes, particularly to help people return to work. There is also at least a chance that a system designed to be much more personal and much more specific to each individual’s needs will be one in which the culture is one of trying to support rather than trying to catch out.

Ah, but Northern Ireland will surely lose out? It is hard to see, on the basis of the overall reforms proposed, how that is the case. For example, Northern Ireland has the highest rate of economic inactivity in the UK, and the reformed system would help reduce this gap; Northern Ireland has the highest rates of disability, and the reformed system will provide more targeted assistance for those in severest need; Northern Ireland has the lowest rates of fraud, and there are grounds at least for hope that the reformed system will recognise that and be more helpful in ensuring those entitled to support receive it.

Has it all gone perfectly? Of course not. Part of this is the nature of reform – things will always go wrong, not least when IT systems are involved. Part of this, no doubt, is the nature of the Conservatives – alongside legitimate reforms they are indeed seeking to introduce “cuts”, for example by restricting annual rises in benefits, in a way which in fact goes against the whole basis and spirit of the reform programme. Nevertheless, we need to be very clear to distinguish between the principles of the reforms, the practice of the reforms, and proposals which are not reforms at all but straightforward cuts.

Northern Ireland, therefore, should introduce welfare reform. Its needs are not significantly distinct from elsewhere in the UK, and indeed it stands specifically to gain in some areas. However, in conclusion, there are three areas where Northern Ireland needs to do particular work in order for the reforms to be truly beneficial.

Firstly, the reforms assume a functioning state-sponsored childcare system as exists in Great Britain; this does not exist in Northern Ireland, and it would need to. Secondly, the reforms assume the availability of work; there remains too great a reliance on the public sector and non-export business such as construction (although recent levels of private sector foreign direct investment provide grounds for hope). Thirdly, the reforms as now being carried through include a Spare Room Subsidy (the so-called “Bedroom Tax”), which has nothing to do with the original research and would have a particularly negative impact in Northern Ireland given the reality of social segregation; this means that Northern Ireland needs initially to provide mitigation against this, and that it then needs to move decisively to address that social segregation. However all of this, without exception, can be done by a devolved Assembly with very limited budgetary consequences (certainly far more limited than breaching “parity”).

Fundamentally, the principles of welfare reform are sound. However, we do have a devolved Assembly and we do have the capacity, if we choose to use it, to shape the reforms to suit us even within the confines of “parity”. I fear the fact we have wasted five years not having a proper debate on the topic is our fault, no one else’s – but, perhaps, better late than never!

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2 thoughts on “Towards a real welfare debate

  1. Ian you are pretending that welfare reform here is as easy as it is in England, it is not. This comes down to finding a strategy that implements the full change of administrative benefit changes – Universal Credit and Personal Independence Payments, Protecting the MOST vulnerable in the long term (Yes there will be some vulnerable losers, and policy changes need to address that), plans to deal with the transition between two levels of benefit cuts: pre-election (Stormont House) and post-election (a Stormont House II) introduces the Top up Scheme details – the Made in Northern Ireland solutions to the Bedroom Tax and other problems and assists in Job creation strategies.

    Neglecting even one of these issues, and no real change has happened. We have welfare deform, not welfare reform.

  2. Regarding social segregation, why is North Down not highlighted as being a problem of massive social segregation in comparison to say West Belfast or Foyle?

    What measures are being made in North Down to tackle social or rather if we cut out the nice words sectarian segregation, or are richer constituencies considered less segregated.

    Is sectarian segregation just a problem for the poor who live in mono-religious ghettos rather than those who live in mono-religious suburbs having mono-religious friends and mono-religious co-workers?

    Surely when it comes to social-segregation the solution is the provision of welfare and community groups, not criticizing the peace-walls.

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