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Sat, 31 October 2020

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Labour needs a welfare policy that reflects the modern world – not a return to the outdated ‘contributory’ principle

Labour needs a welfare policy that reflects the modern world – not a return to the outdated ‘contributory’ principle

Labour have called for Universal Credit to be scrapped and replaced with a new welfare system

4 min read

This crisis is a moment to create a welfare system based on solidarity and empathy. We must not return to the language of the ‘deserving and undeserving poor’

It has been difficult to discern the outline of Keir Starmer’s policies since he took over as leader. This is not necessarily his fault. First the Brexit nightmare and now the horror of coronavirus have completely eclipsed normal political debate.

But, in his first national interview, Starmer’s new shadow work and pensions Secretary Jonathan Reynolds seems to be pointing to the direction of travel on social security. Reynolds argues that Britain’s welfare system needs a stronger link between “what you put in and what you get out” and that those who have made a “greater contribution to the system” should receive more out of it.

And he adds: “I simply feel that the lack of connection between what you put in and what you get out has become a major problem of social security and the political support for it”. (Of course some might argue that the “major problem” of social security is the very low levels of benefit.)

But these are not throw-away remarks by Reynolds, nor has he been quoted out of context. He is reflecting exactly the views of Starmer’s head of policy Claire Ainsley. She said in her book The New Working Class: “Successive policies have weakened the contributory elements of the benefits system and there is a case for restoring the principle of contribution as a means of meeting expectations and restoring confidence.”

Ainsley goes on to suggest a policy of lower and higher rate of unemployment benefit, so that those who have made contributions through previous earnings receive a greater entitlement than those who do not have previous contributions.  

Of course the contributory principle was one of the original principles of the welfare state. But that was a very different labour market. There was full employment, stable work, strong trade unions and women largely did not work.

In 2020 the people who could suffer from the  “contributions” approach include: people who are excluded from the labour market; those who have to work part-time because they are carers, those who can’t get more hours; those who are single parents; women generally; the young and the disabled.

Universal benefits are not just fairer, they are simpler to administer. The “contributions” approach always means elaborate means testing and the increased possibility of people falling through the net.

And it is the “contributions” approach that has led to migrants being charged for using the NHS and the “no recourse to public funds” policy. Behind the “contributions” thinking is the notion of the deserving and undeserving poor. And for some voters there is no more undeserving group of citizens than people whose skin colour happens to be different from their own.   

It is also a strange time for Reynolds to come out for “contributions” thinking. Currently over 8.7 million people are furloughed. That is one in five British workers dependent on the state, at a cost of over £8 billion to the taxpayer. But noticeably chancellor Rishi Sunak was not asking what the individual contribution of each furloughed worker was and then capping the taxpayer contribution accordingly. In fact this is just the moment to create empathy and solidarity between, on the one hand those who have never been dependent on the state before (and never thought that they would be) and on the other, those who have been dependent on the state for a long time. Instead Reynolds want to talk about “contributions”.

This is not a new type of thinking in the Labour Party. In 2015, the then Labour shadow work and pensions secretary Rachel Reeves said: “We are not the party of people of benefits. We don’t want to be seen, and we are not, the party to represent those who are out of work. Labour are the party of working people, formed for and by working people.”

Labour party members will demand a proper debate on social security policy. And they will want forward-thinking policy that reflects the realities of today’s labour market, not backward-looking talk of Labour not being the party of people on benefits. 

 

Diane Abbott is Labour MP for Hackney North and Stoke Newington

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