Editorial: The social contract in the 21st century

Eight years of austerity have left our public services and social safety net in tatters. This state of affairs is a political choice. It’s a choice predicated on the principles of a small state and self-reliance, with a narrow definition of work held up as the ideal economic and social role of all citizens, and punitive treatment for those who do not fit into this vision. Significant suffering has been inflicted in the wake of cuts to government departments, public services and benefits that redistribute wealth: health and social care cuts alone have been linked to 120,000 excess deaths in England.¹ The disaster continues with the Conservatives’ flagship policy, universal credit (UC), hollowed out from its original form by cuts and designed and implemented without listening to the people it affects and the reality of their lives.

Testimony of cruel and inhumane outcomes has forced the government to reverse many of the cuts to UC in this Autumn budget, with those in initial areas of rollout facing higher levels of rent arrears, evictions and use of food banks.² While this u-turn is welcome, there remain serious issues in a welfare-system that has been radically reduced and reshaped: three- quarters of the welfare cuts since 2015 remain government policy.³ The two-child limit, benefit cap and freeze on benefit rates are estimated to put hundreds of thousands in poverty.⁴

“the decade up to 2020 will have been the worst for wage growth since the Napoleonic era, and the majority of people in poverty are now in working households”

Many decisions to cut public services and social security have, by their very nature, been short term, ignoring evidence of challenges to come, and as a result have been incoherent and wasteful. Care needs are rising, but care budgets have been cut by around £7 billion, with the Association of Directors of Adult Social Services threatening that adult social care services are now on the brink of collapse.⁵ This amounts to a fall of 17 per cent per person in deprived areas, compared to 3 per cent in affluent areas.⁶ As with so much of austerity, the burdens are unevenly and unjustly shared. At the same time, even as the pace of technological change necessitates career switching and digital skills, further education has been cut to the bone, with total spending on adult skills having fallen by 45 per cent since 2010.⁷ The Conservatives still insist that work is the means to lift families out of poverty, but the decade up to 2020 will have been the worst for wage growth since the Napoleonic era, and the majority of people in poverty are now in working households.⁸

And so the Age of Austerity has delivered an Age of Contradiction. Automation heralds the potential to work less, but instead we are being pushed to work more. Home ownership is still lauded as essential, but demand-side policies such as Help to Buy serve to push up prices, making homes less affordable. There has been a welcome emphasis on good work, and yet our welfare state pushes people into insecure, low-paid jobs, shaping the labour market as it does so. Cultural and political divisions are growing, and yet shared public spaces have been cut alongside local authority spending. Any reforming instincts of the current government – being generous – have been eclipsed by Brexit and the weakness of May’s position. On childcare, an area where the Conservatives have made genuine steps forward through the provision of free entitlements to childcare, underfunding threatens the sustainability of both the policy offer and the sector.

Labour – as the party of the welfare state and the party most trusted with the NHS – should be on the attack. But, compared to their impressive work on developing an alternative economic narratives and policies, the party’s thinking on welfare policy is relatively weak and under-developed. The standard response to ‘How would Labour end and reverse austerity?’ is typically thought of in the form of economic policy to limit the need for a safety net in the first place, rather than what a proper safety net would look like. Policies in the 2017 manifesto and those announced at the 2018 conference were, in many cases, ‘social democracy plus’: universalising free childcare hours for 2-year-olds, a set of 20 tweaks to employment regulation and union rights, and restoring work allowances in universal credit. These policies would no doubt improve the lives of many in the UK, and should be pursued. But they do not amount to a coherent, overall vision for a modern welfare state equipped to deal with and exploit the global economic, societal and technological trends that will unfold over the century – one that liberates as it protects. This is a tall order, but one that Labour should rise to if the Corbyn administration is to genuinely signal a break with the past and institute a new social and economic paradigm, creating an emancipatory relationship between state and citizens.

“For the first time since the financial crash of 2007/08, more people want taxation increased to allow greater spending than want tax and spending levels to stay as they are”

The politics will not be easy. The Coalition government, and New Labour before them, successfully employed the divisive rhetoric of ‘scroungers vs strivers’, of alarm-clock Britain, and underpinned it with policies that will take time to recover from. This tricky context almost certainly informs the lack of detail from Labour on how cuts to UC would be addressed to fix the welfare system.

However, politics changes, and eventually voters become fatigued with policies that consistently weaken widely-used services. The latest British Social Attitudes survey suggests there are doors ajar for reformers to push on. The public are turning against austerity, and the Conservative government has pledged to end the party’s driving policy of the last decade. For the first time since the financial crash of 2007/08, more people want taxation increased to allow greater spending than want tax and spending levels to stay as they are.⁹ While the public’s top priorities for additional spending are universal services, such as health and education, support for spending more on welfare payments, even if it means higher taxes, has risen to its highest level not seen since 2002. As John Curtice outlines in his essay for this issue, the public favour additional support for working parents on low-incomes. It is they, more than most, who have suffered from and deserve an end to austerity.¹⁰

This issue looks at the relationship between the welfare state and citizens, and what a modern, emancipatory welfare state would look like. On the welfare system, Katie Schmuecker argues that the principles of UC are sound, and that with political will and input from those claiming it, it can be fixed. Ruth Patrick identifies five areas for imagining welfare futures, including listening to the expertise of those who experience policy, embedding principles of respect and dignity, and destigmatising welfare. We would do well to embed these values at the heart of a more humane and ambitious social security system.

Bill Davies makes the case for not just looking at benefit payments, but also reforming while renewing investment in employment services – to better help people into good work, not just any work. The UK’s current low unemployment rate means that this is a neglected area both in terms of policy and in the amount of scrutiny provided by the opposition. Carys Roberts examines the connection between the crisis of work and the crisis of care, and argues that, for a renewed social contract and sustainable economy, progressives should craft a politics of time. Emily Kenway looks at the most marginalised groups in the workforce – those engaged in modern slavery – and argues that to really tackle this issue requires a root and branch rethinking of our whole labour market.

Welfare states are – as the name suggests – focused on the state and its citizens. But where those boundaries lie and where responsibility ends, is contested. Kimberly McIntosh argues that, in the wake of Windrush, and in the context of differential and intersecting impacts of recent social policy on black and minority ethnic (BME) groups and women, not all citizens are equal in our current welfare state. Our imperial history has hugely disadvantaged not just BME British citizens, but countries around the world from which Britain extracted wealth. Britain’s current prosperity is partly built on this legacy. Maya Goodfellow argues that a critical engagement with Britain’s colonial past is necessary to understand the inequalities of the present, and makes the case for consistent and high quality education for all children in this regard. Gita Sahgal argues that not providing women fleeing gender-based violence recourse to public funds or a right to asylum is a dereliction of the government’s duty, even on its own terms.

“politics is in a radically different place a decade on from the crash and the subsequent all-out assault on Britain’s welfare state”

Achieving an emancipatory welfare state will require not just new policies, but also new ways of achieving change and new models of statecraft, from the local to the national. Hettie O’Brien explores the possibilities for municipal socialism in her interview with Phil Glanville, Mayor of Hackney. Rather than waiting for change at the national level, Hackney is using the power and resources of the council to change the relationship between government and citizens, shape the local economy, and push back against 40 years of neoliberalism. Gavin Kelly and George Bangham look back at the different approach of New Labour’s ‘asset-based welfare’ policies, and what can be learned both from the policies and their transience in terms of political success. Antonia Jennings argues for the public sector to take a joined-up approach across policy objectives and silos: leveraging NHS assets could help in the fight against climate change while also making people healthier.

Ending austerity in itself is a contested goal: it could be interpreted as halting future cuts, reversing reductions in spending, or reversing every specific policy decision. What is clear is that the challenges facing the UK have changed, and therefore simply returning to the social policy of 2010 would be inadequate. The labour market is substantially less secure than in 2010, and more people are in work than before. Brexit is likely to impact on living standards as well as the shape of our economy and who works in it. And politics is in a radically different place a decade on from the crash and the subsequent all-out assault on Britain’s welfare state. The global rise of populism and, most worryingly, ethno-nationalist and fascist regimes brings to the fore questions of where the boundaries of citizenship lie and the relationship between citizens and the state.

Progressives will also need to recast both policy and statecraft for the politics of the day. While the social policy successes of New Labour are by far their greatest achievement and should be acknowledged, New Public Management was based on a neoliberal, pro-market consensus at odds with both public opinion and the economic thinking of the current Labour party. Alongside economic reform, there must be renewed investment in the welfare state, and that must be accompanied by the reform of services and welfare policy, with an emphasis on building relationships between people and increasing democratic oversight.

The ideas in this issue are by no means comprehensive, but they offer the beginnings of where progressives’ focus should lie. In the short term, there are immediate steps that could be taken to restore the welfare system to a form that can reduce child poverty and provide an adequate safety net. Progressives should take these steps immediately. In the long term, deep thinking is needed on the role and principles of our welfare system, how broad-based support for a social security system can be achieved, the state’s responsibilities to all British citizens and to people abroad, and how change is achieved. Only then can we recover from the damage of the previous eight years and realise a better future for all.

Carys Roberts and Laurie Laybourn-Langton

1. See: https://bmjopen.bmj.com/content/7/11/e017722
2. See: https://news.sky.com/story/what-impact-is-universal-credit-having-11343838
3. See: https://www.resolutionfoundation.org/media/press-releases/squeeze-continues-for-low- and-middle-income-families-despite-chancellors-55bn-giveaway-budget/
4. Tucker J (2017) The austerity generation: The impact of a decade of cuts on family incomes and child poverty, CPAG and IPPR. http://www.cpag.org.uk/sites/default/files/Austerity% 20Generation%20FINAL.pdf
5. See: https://www.theguardian.com/society/2018/jun/12/adult-social-care-services-collapse- survey-england-council
6. See: https://www.ifs.org.uk/publications/13066
7. See: https://www.theguardian.com/global/2018/oct/28/future-welfare-state-cuts-care-health- education
8. IPPR Commission on Economic Justice (2018) Prosperity and justice: A plan for the new economy. www.ippr.org/cej
9. See: http://www.bsa.natcen.ac.uk/latest-report/british-social-attitudes-34/key-findings/a-back lash-against-austerity.aspx
10. See John Curtice’s article in this issue.