Since the downturn, Britain’s welfare system has come under sustained pressure, not just from shrinking budgets but also a backlash in public opinion. 62 per cent of us now agree that benefits are too high and discourage work – up from 54 per cent immediately before the financial crisis (and more than double the figure from 20 years ago). Fashioning a response to this is one of the fundamental challenges for ‘one nation’ Labour.
Part of the answer is a robust response to ministers, and others, when their rhetoric loses touch with reality. One recent study found that 29 per cent of news stories about welfare refer to fraud, despite official estimates that fraud across all benefits is just 0.7 per cent. Likewise, ministers’ use of poverty statistics has been inaccurate at best. Evidence of families suffering problems like low income, unemployment or poor housing has been used to imply 120,000 ‘chaotic families’ characterised by crime, drugs and anti-social behaviour.
In fact, the majority of children in living in poverty in Britain have at least one parent in work – a problem caused by low wages and limited working hours, not social breakdown. New Demos research adds to the picture, finding that the biggest group of families in poverty are ‘grafters’: people who are either recently unemployed or stuck in low paid work. Their problems are economic rather than social.
One nation Labour is a powerful frame through which to challenge these narratives, with its concern to bring people together rather than sow seeds of mutual mistrust. However, getting the facts straight can only be one half of the story. The one nation idea must also become a policy agenda capable of uniting people around a positive vision of Britain. That story cannot avoid value judgements. If it does it, it will fail to connect with vast swathes of public opinion and do little to arrest the slide in support for the welfare state.
A look at the Fabian Society research on attitudes to inequality, undertaken shortly before the last election, helps explain why. The Fabian research found that around a fifth of people are ‘traditional egalitarian’, espousing a version of fairness based on meeting social needs. A similar proportion were categorised as ‘traditional free market’, believing that both rich and poor tend to get what they deserve through the job market. However, the majority sat in neither of these camps, holding a more complex view of fairness involving a combination of ideas about social need, moral desert and legal entitlement. One nation Labour needs to speak to this group in order to win the next election, let alone govern well.
This need not mean a move away from the founding principles of either the labour movement or the welfare state. The Beveridge model of social insurance was based on ‘benefit in return for contributions’, not simply meeting need. But today too many people find that years of contribution – through work or caring – count for little when they come to rely on the system. Many find the entitlements insultingly low, or worse, that they are ineligible due to rationing through means tests.
Under the present government the contributory principle is being diluted further, with the extension of means-testing in welfare (in particular for disabled people). One nation Labour should highlight the injustice of this and do whatever it can to reverse the changes in government. People must be reassured that Labour shares their frustrations not just with the idea of ‘something for nothing’ but also ‘nothing for something’ welfare.
In other areas Labour should not be afraid of engaging with questions of what people ‘deserve’. Labour was founded on the idea that working people should not be exploited by their employers – an honest day’s work deserves a decent day’s pay. Ed Miliband’s decision to champion the living wage should therefore be a fundamental part of the message that one nation Labour takes into the next election.
On tax, the message should be the same. Labour should certainly not be relaxed about people being ‘filthy rich’ if they have done little to earn or deserve it. A one nation approach would distinguish between the wealth people have earned through working hard or starting a starting a business and the wealth that is simply acquired when house prices rise. Rather than obsessing over the 50p tax rate, Labour should go into the next election promising tax reform instead and shift more of the burden of taxation from work and enterprise to land or property.
The nature of the current debate around welfare has made many on the left nervous about engaging with questions of what people do and do not deserve. It is understandable but it is also a mistake. Labour should be more confident in the British people’s sense of fairness. If people are presented with facts that are clear, a vision that is consistent and policies that are thought-through, democratic deliberation can produce a society that is more equal and successful, not less.