The big picture

This ‘Poverty and social security: where next?’ blog series has given valuable pointers about what a future government should do to mend social security and tackle poverty over the coming decade. To draw the series to a close, I discuss selected key challenges and potential directions for change, focusing mostly on provision and poverty for those below pension age, which most would see as requiring more attention today.

Sustaining the social security system and tackling poverty

However, mending social security and tackling poverty are not synonymous.

First, a social security system in which everyone has a stake cannot be limited to the relief of poverty alone, but must have much wider goals. These include the sharing of risks to livelihoods (including unemployment, sickness and old age), as well as additional costs (due to disabilities or having children). This would be an embodiment of mutual solidarity in the face of an uncertain world. It would also help prevent poverty, as Ruth Lister pointed out.

Secondly, tackling poverty cannot be achieved through benefits alone. These are crucial elements of a solution. But, as Kate Bell and Anjum Klair noted, much can be achieved by reducing (for example) housing and childcare costs, rather than continuing with means-tested assistance to help with increasingly marketised provision.

In-work poverty: not just about work

So what are the key challenges and directions for change? I start with ‘in-work poverty’. This is rightly attracting increased attention. But the label often means solutions are seen solely from the perspective of the person in work – higher hourly wages, or better in-work benefits.

These are clearly important. But in-work poverty requires more forensic investigation. It may often be due to low work intensity, in particular in couples, with one partner not in employment due to unemployment, sickness or caring. So improving access to, and levels of non-means-tested benefits (especially carer’s allowance) and parental leave payments is crucial. Restoring the level of employment and support allowance for those who may return to work, and reversing its time-limiting to a year, are examples of this approach.

In addition, as Kate Bell and Anjum Klair noted, support for those needing to work part time should be improved. Many stuck on low pay (and at risk of long-term poverty) are women, who should also, therefore, be helped to move on and up in work when appropriate, perhaps with temporary payments for progression.

Universal credit: design, not just delivery

We must recognise the real suffering caused by universal credit delivery, as Stephen Timms MP argued. Child benefit and carer’s allowance have, ironically, provided a safety net for many.

But the fundamental problems are the structure and design of universal credit. Reversing the ratcheting up of conditionality and sanctions should be part of any reform. But combining six benefits with different aims into one drastically limits policy flexibility, whilst putting (nearly) all your eggs in one basket puts the whole household income at risk. Monthly assessment can also result in income being mismatched to needs, depending on when changes of circumstances happen. This is just not feasible for people at these levels of income.

My considered judgment is that universal credit is not fit for purpose. It would be complex to unravel the organisational changes already made. But any new government will have to decide whether to do so.

Universal basic income: partial possibility?

Some support universal credit because it smooths the transition between being in and out of work, and between working different numbers of hours (although the immediate bite of the ‘poverty trap’ at month’s end when earnings increase is not conducive to security).

Universal basic income could fulfil this same aim – as child benefit already helps to do for many. But it is unlikely that a full-blown version, paid to individuals at an adequate level with no means test or conditions (though perhaps with a residence requirement), will be introduced in the UK any time soon.

However, a partial basic income, paid at a lower level alongside other benefits, is possible. Andrew Harrop has suggested converting the personal tax allowance into a payment for all, in or out of work. Other benefits would be retained, but reduced to take account of this.

Whether this is pursued may depend on views about how much to tackle employment insecurity at source versus compensating for it; and whether public opinion will accept even low-level benefits without conditions or means tests for able-bodied working-age adults. Another concern is whether women will exit the labour market if they get a small state income with no right to return to employment. (This could also be true for the personal learning account suggested by Kate Green MP – perhaps one reason the Netherlands has recently abolished a similar scheme.)

Some argue for rejuvenated, more inclusive social insurance. Indeed, the biggest recent reform, the new state pension, strengthened the contributory system; and paid parental and carer’s leave, and a social care insurance scheme are currently being discussed. Merging national insurance contributions and income tax seems more unlikely, and a recent Fabian Society report on tax recommended reinforcing the contributory principle (which could be widened, to include more recognition for other forms of contribution.)

What is clear is that less emphasis should be placed on the mechanism(s) and more on the central goals of a revitalised social security system, as Andrew Harrop has argued before.

Gender analysis

Another drawback of universal credit is the one payment per household, seemingly ill-designed for families today. Similarly, identifying one partner as the ‘main carer’, with no recognition of the other’s caring responsibilities, contradicts the emphasis on shared parenting elsewhere in government policy.

A final challenge is therefore how to give individuals some financial autonomy, whilst acknowledging the interdependence of caring and endeavouring not to reinforce the gendered division of labour. Providing independent income is easier, however, if the benefit unit is the individual and benefits are non-means-tested.

As Mary-Ann Stephenson noted, social security reform needs to incorporate gender analysis. This would focus not just on what resources are transferred between men and women, but also on the impact of such changes on gender roles and relationships, and gender inequalities within and beyond the household, both now and in the longer term.

Learning from those on low incomes

Recent experience of universal credit demonstrates the failure to learn from those living on low incomes. But it is crucial to do so, in relation to both priorities for benefits and how claimants are treated. Some exciting experiments are under way, including the ‘experience panels’ in Scotland described by Sally Witcher.

As Mike Amesbury MP wrote, jobcentre staff should be enabled to give constructive help. The ‘sustainable livelihoods approach’ has been used by Oxfam in Wales to help such staff understand the lives of people in poverty and their assets (not just what they lack).

There is scope to expand this approach. It would also help to ensure that the key principles of dignity and respect – enshrined in the Scottish social security system – become realities.

But we also need to think carefully about the ways in which we can think beyond the association of social security with poverty alone and involve everyone in thinking about the social security system as being relevant to them. This message is challenging when a key priority will be making good the benefit cuts and four-year freeze, as Kate Green MP argued, as well as restoring a proper safety net; as John Veit-Wilson and Reverend Paul Nicolson wrote, people must be able to flourish, not just survive.

But ever more means testing is a dead end. And the sustainability of the social security system depends on broad-based public support. So if we are thinking about the next decade, we need to think further than mending the benefits system and tackling poverty, crucial tasks though these are.

This blog is part of our Poverty and social security: where next? series. Read more about the project here.