Christian Welfare Reforma critique of the welfare state and current rhetoric

Dr Simon Duffy ￭ The Centre for Welfare Reform ￭ October 2013 ￭ Notes based on presentations for Bishop of Wake"eld’s Breakfast Seminars

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1. The welfare state is a good thing

2. But it’s designed wrong

3. Many of our beliefs about it are false

4. It is biased against the poor

5. The current crisis highlights deeper problems

6. Citizenship is the key to real reform

In summary

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The welfare state is a good thing...

...and it is utterly essential.

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After meeting with community groups in the North of England a Finnish researcher asked:

What’s the problem with ‘welfare’? In Finnish it just translates as ‘well being’

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All societies create some system of welfare; but Christians have often seen their role as advocates for the poorest. We seek to build societies where welfare is not as a result of kindness, but of justice: True love is excess of justice, excess that goes farther than justice, but never destruction of justice, which must be and must remain the basic form of love. Benedict XVI It is axiomatic that Love should be the predominant Christian impulse, and that the primary form of love in social organisation is Justice. William Temple Christ does not call his benefactors loving or charitable. He calls them just. The Gospel makes no distinction between the love of our neighbour and justice. In the eyes of the Greeks also a respect for Zeus the suppliant was the !rst duty of justice. We have invented the distinction between justice and charity. It is easy to understand why. Simone Weil

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The Christian call for justice is central to our faith and our role in the world. But there are many other good pragmatic reasons why we need the welfare state:

• Morality demands we create a fair society - to live together as equals in justice.

• Happiness demands we ensure a balance of security and freedom - to enable each of us to !ourish.

• Efficiency demands we use all our talents - to ensure we can all contribute to the well-being of all.

• Prudence demands we avoid fear & crisis - to avoid victimisation, blame and strife.

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Fear and insecurity breeds scapegoating, terror, war and revolution. Current rhetoric implies we may now no longer need the welfare state. But this false. Modern society grows even more insecure - it is more important than ever that we secure our collective well-being.

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The welfare state is a good thing...

it’s just designed wrong.

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Debates about the welfare state usually focus on its size: spend more vs. spend less

But this is the wrong question.

The real question is how should the welfare state be designed: How should it work?

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The dominant intellectual tradition which framed the design of the welfare state was Fabianism:

We have little faith in the 'average sensual man', we do not believe that he can do more than describe his grievances, we do not think he can prescribe the remedies. Beatrice Webb

Competing traditions were defeated in the debates that preceded World War II:

Collectivism has put all their eggs in one basket. I do not think that Mr Shaw believes, or that anybody, believes, that 12,000,000 men, say, carry the basket, or look after the basket, or have any real distributed control over the eggs in the basket. I believe that it is controlled from the centre by a few people. They may be quite right or quite necessary. A certain limit to that sort of control any sane man will recognise as necessary: it is not the same thing as the Commons controlling the means of production. It is a few oligarchs or a few officials who do in fact control all the means of production. G K Chesterton

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1. The "rst principle is that any proposals for the future, while they should use to the full the experience gathered in the past, should not be restricted by consideration of sectional interests established in the obtaining of that experience. Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear "eld. A revolutionary moment in the world's history is a time for revolutions, not for patching.

2. The second principle is that organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of "ve giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.

3. The third principle is that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The State in organising security should not sti#e incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family. William Beveridge

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• Meritocracy - most people lack the capacity to make good decisions for themselves, only the ‘clever’ can be trusted with power.

• Centralisation - power and control needs to be centralised in order to make rational decisions on behalf of the whole of society.

• Standardisation - equity is more about ensuring procedural uniformity (we all go through the same processes) than about equalising resources or opportunities.

• Individualisation - the relationship between the individual and the state is central (civil society - "rms, communities, Churches, friends and family can all be taken for granted.)

The underlying design assumptions of Fabianism are powerful, but ultimately damaging:

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• Power and resources are centralised in London (the UK is the 2nd most centralised welfare state after New Zealand).

• Communities and families are undermined (e.g. the bene"t system penalises people for forming families).

• Inequality is growing - the UK is the third most unequal developed country, yet has low levels of productivity.

• Our leaders blame the poor for poverty and encourage stigma (e.g. growing hate crime for disabled people).

• We fund services, not people (e.g. £3 billion spent on 21,000 institutionalised in private ‘care services’).

The price we pay for the success of the Fabian tradition is steep. Costs include:

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1. Elitism - power and control is concentrated in the hands of powerful private and public elites

2. Isolation - people are increasingly cut off from each other and the means to rich and meaningful lives

3. Poverty - differences in income are growing, freedom for leisure and personal development is diminishing

4. Stigma - some of us are increasingly marked out as less worthy, less valuable or a threat to society

5. Despair - mental illness, hopelessness and a sense of spiritual emptiness is growing

Beveridge set out to defeat "ve giants, but have we created "ve new giants in their place?

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At the same time we are increasingly aware that none of this is sustainable.

The state is good and necessary - but its competence is limited.

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Pruitt Igoe Urban Housing Project: 1952-1968

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The welfare state is a good thing...

...but our beliefs about it are false.

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1. The welfare state caused the current crisis

2. Bene"ts are expensive

3. Bene"t fraud is signi"cant

4. The poor are not tax payers

5. There are many people who just live on bene"ts

6. The South subsidises the North

Much of what passes for common knowledge about the welfare state turns out to be utterly false and misleading. Here are 6 welfare myths:

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Over 40 years public expenditure has varied little. The recent modest increase was the result - not the cause of the economic crisis.

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Bene"ts are not strictly government expenditure - instead for economists they are part of a system of income adjustment. When we adjust for taxes real cost of bene"ts is very low.

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Bene"t fraud is only 6% of tax fraud, yet it is covered by the news 600% more. Government fraud - a bene"t system so complex many do not get what they are entitled to - is even greater.

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The poorest 10% of families pay the highest share of their income in taxes - about 45%.

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The number of people who simply rely on bene"ts and who do not make an efforts to "nd work is tiny.

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So called ‘deprived’ communities do not even get their fair share of public spending, and what they do get they can’t control.

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These welfare myths are not random. They #ourish for a purpose...

to assure the powerful of their own superiority.

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Overheard at a public policy conference in London:

The welfare state exists for the bene!t of the poor.

This statement was made, without irony, by a senior academic and made to a room full of public servants, politicians, think-tankers and others; all of whom are utterly dependent on the patronage of the welfare state. What other people get is a ‘hand out’, while what I receive is an entitlement. We are blind to the entitlements of others; but all too eager to expand our own sense of entitlement.

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The welfare state is a good thing...

...but it’s biased against the poor.

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Paradoxically the welfare state serves least well those who are used to justify its existence...

the poorest families, disabled people, asylum seekers - the victims of injustice.

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• The poor not only pay the highest taxes, they pay rates of marginal tax that can exceed 100%

• You must get poor and stay poor in order to get means-tested services (e.g. social care).

• Only the better off can choose how they get education, health or social care.

• The poor are very poor - e.g. the poorest 10% of families live on £11.90 per day after tax.

The welfare state is designed in ways which often disadvantage the poorest:

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The system is a vast poverty net:

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The welfare state is a good thing...

...but it can be corrupted.

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Today ‘welfare reform’ is a central political project.

The current government - building on the work of the previous government - is pursuing policies that are justi"ed in strong moral terms and which seek to increase employment, personal responsibility and stronger communities.

However, as these goals are converted into practical policies and media soundbites they often seem to reinforce bigotry, ignorance and injustice.

[NB. The “Bene"t Thieves” Campaign was developed by New Labour.]

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The terms ‘austerity’ and ‘fairness’ are used to justify cuts in public spending and welfare reforms.

but these cuts target the very people that a fair society should protect.

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Most cuts are targeted in just two areas - bene"ts and local government (60% of which is social care):

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Child Bene"t freeze Abolition of Sure Start Maternity for second and subsequent children

Change to CPI indexation of bene"ts Reductions in support for carers

Replacing DLA with PIP Child Bene"t clawback from higher rate taxpayers

Time-limiting of contributory ESA Transfer of Social Fund to local government

Council Tax Bene"t – 10% reduction and localisation

Extension of JSA lone parents with a youngest child aged 5-6

Housing Bene"t cuts Household Bene"t cap

Abolition of the Independent Living Fund Continued use of ATOS or others

Universal Credit Reductions in ‘Access to Work’ funding

Closure of Remploy services Abolition of the Child Trust Fund

Tax credit changes Abolition of the Health in Pregnancy Grant

Abolition of the Child Trust Fund Abolition of the ESA youth rules

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The cuts in bene"ts and the cuts in social care fall disproportionately on two overlapping groups: people in poverty and disabled people (including children and frail older people).

They fall hardest of all on people with the most severe disabilities, who rely on both bene"ts and social care.

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Harsh measures are justi"ed in terms of the current economic crisis.

But politicians try to avoid confronting the fact that that this crisis was created by over-borrowing by home owners & over-lending by banks.

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The extreme growth in house prices is primarily the result of a bubble - an arti"cial price increase that offers easy bene"ts:

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Current interest rates re!ect a desperate effort by the government to not let the bubble burst at great cost to home owners.

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This arti"cially low interest rate is a hidden subsidy to the better off even greater in size than the cuts to bene"ts and care.

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‘Welfare reform’ has become code for a redistribution of resources away from the poorest and towards the better off.

In the competition for political power politicians are taking care to ensure that they target bene"ts on swing voters: home owners, families with two employed parents, middle-income earners.

The median voter is far more important than any other. The median voter determines who wins elections. We live in a medianocracy.

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The welfare state is a good thing...

...and it should support citizenship.

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The on-going corruption of the welfare system into an increasingly unjust and damaging system was the very opposite of what was intended by the thinkers who inspired and designed it:

The aim of a Christian social order is the fullest possible development of individual personality in the widest and deepest possible fellowship. William Temple

The [new 1834] Poor Law treated the claims of the poor, not as an integral part of the rights of the citizen, but as an alternative to them - as claims which could be met only if the claimants ceased to be citizens in any true sense of the world. T H Marshall

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A better system would support and encourage citizenship for all. It would respect the capacities of communities and citizens and create a fundamental framework of basic securities.

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Services would be accountable to citizens, not gifts from the government.

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• Human rights at heart of system

• Minimum universal securities as rights

• A fair and integrated tax-bene"t system

• Individual freedom for all• Families and communities

respected and supported.

Elements of a better system might include:

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It’s time to explore a new settlement for the welfare state and ensure its underpinnings are strong, constitutional and less liable to corruption by politics.

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The Church may not have all the answers...

but it can ask the right questions.

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Further reading:

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For more information:

Web: www.centreforwelfarereform.org

Twitter: @CforWR and @simonjduffy

Blog: www.simonduffy.info

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