Liam Byrne on welfare ‘reform’: “An insult to the memory of Beveridge”

Shadow Work & Pensions Minister Liam Byrne said "We will work with the coalition on welfare reform" on The Andrew Marr Show in 2011

The Guardian, Letters, Tuesday 3 January 2012 21.00 GMT

Liam Byrne, in his argument for increasingly punitive treatment of benefit claimants (Beveridge for this century, 3 January), draws on Beveridge’s rather brief discussion of “conditionality” in relation to the receipt of unemployment benefit.

He mentions Beveridge’s commitment to full employment, one of the assumptions in his great report as a basis for social insurance reform, but seems surprisingly ignorant (for a holder of a first-class degree in politics and history) as to what Beveridge actually meant by this.

In Full Employment in a Free Society (1944), Beveridge defined full employment as a situation in which there were more jobs available than people seeking to be employed. In those circumstances he thought conditionality would be appropriate.

He would have dismissed any assertion that conditionality was the issue when a world recession and the structural failure of the UK economy have led to there being more than 2.5 million people unemployed (not counting those on incapacity benefits who are part of Byrne’s target group for conditionality) and less than half a million job vacancies. 

Perhaps Byrne has suffered memory loss in consequence of his pre-political employment record as an international consultant and merchant banker, or perhaps he never knew what Beveridge meant in the first place.

In any event, his article is an insult to the memory of Beveridge and to those who today have no work because the capitalist economy has failed them.

Mass unemployment is, as Beveridge put it in his first book in 1909, primarily a problem of industry, of the system, rather than a result of the deficiencies of the unemployed.

In Full Employment in a Free Society, Beveridge argued that Keynes’ ideas meant capitalism could be managed to maintain full employment, but that if it could not then there must be a full socialisation of the economy.

Imagine any New “Labour” politician, let alone a Liberal, saying that today.

Perhaps they should.

Professor David Byrne, Durham University

Liam Byrne says Beveridge’s principles are the right place to begin a rethink of the welfare state, and says the first of those principles is that benefits should only go to those “who had their earning power interrupted because of illness, industrial injury or the capriciousness of the trade cycle. He never saw unearned support as desirable”.

This vision of the welfare state rests on the assumption that paid employment is, in Byrne’s words, “the kind of behaviour that is the bedrock of a decent society”. By implication, anyone who can’t or won’t aspire to paid employment is stigmatised as unworthy, not to be admitted as a full participant in wider society.

Everyone is compelled to seek paid work only. But a decent society also has a raft of unpaid occupations, including parenting, elderly care, running volunteer organisations, artistic activities.

Why design a modern welfare state to shrink the scope for these activities? Rather, the modern welfare state should establish a basic universal income, so that people do not feel compelled to avoid unpaid occupations.

The basic income should be financed by switching the tax base from (easily manipulated) income to wealth, which is the more comprehensive measure of ability to pay; and at the same time, lowering the degree of progressivity in tax rates in order to reduce incentives for evasion.

 Professor Robert H Wade, London School of Economics

I found little to argue with in Liam Byrne’s article, but Patrick Wintour’s gloss on it (Labour urges radical rethink on welfare, 3 January) seems to suggest that the wider Labour party would be likely to support many of the so-called reforms that the current government are proposing.

We do not and never will.

The social security system was designed to ensure that the mass poverty and social damage that disfigured Britain up to 1948 would never be seen again. 

It was also hoped that full employment would be a feature of a newly reinvigorated postwar UK, but that is not always in the hands of the government, so the primary gift of social support is that, whatever the circumstances you and your family face, you will be fed, housed, educated and have a little left over to enjoy a few of life’s pleasures.

The mass unemployment that threatens this country is not a consequence of a skewed benefit system or a feckless non-working class; the cause is a capitalist system gone feral in the hands of a power and money elite who resent having to support victims of their greed.

The way out of this problem is not punishing those who cannot find work and the families that rely on them.

We have to share around the products of a wealthy society and ensure the gap between rich and poor is viewed as a problem to be solved, not the normal consequence of capitalism.

Joanne Columbine, Bury, Lancashire

Liam Byrne’s call to renew the welfare state could not be more timely. The idea of social insurance, whereby we contribute when we can afford to and obtain benefits when we need them, is under sustained attack. 

Indeed, the chancellor’s proposals to merge tax and national insurance will consign it to history. It is being replaced with “welfare”, which is portrayed by politicians and the media as handouts to the (undeserving) poor. 

Those who see themselves as paying for welfare through their taxes (conveniently ignoring the contributions everyone makes from VAT) find that the benefits they once enjoyed, such as child benefit, free university education for their children, and social care when they grow old, have gone.

 Soon, they will find that they must pay for their healthcare, as the private corporations involved in clinical commissioning groups decide what they will and will not offer.

 What better way to create an English Tea Party movement?

Beveridge understood this. Unfortunately, many of his successors have not.

 Professor Martin McKee London School of Hygiene and Tropical Medicine

Liam Byrne is certainly right to say that Beveridge would never have envisaged that the country would be spending £20bn a year on housing benefit. 

At the time of his report there was rent control to prevent profiteering from the shortage of homes to rent. There was also general acceptance of the need after the war to enlarge the housing stock by both private and council building, and the repair of damaged properties. 

It was the ending of rent control, the selling off of council housing without replacement, the rise in the price of land and houses, and the lack of policy to bring empty houses into use, which led to the present situation. 

The £20bn cost to the country does not stay in the pockets of tenants – it is a subsidy to landlords, enabling them to keep rents higher then tenants can afford to pay from their earnings or unemployment benefits etc.

The challenge to Liam Byrne is to develop a housing policy to bring down this subsidy without disrupting the lives of tenants or adding still further to homelessness. 

There is no easy, overnight solution, but thinking back to Beveridge may be a good starting point.

 Margaret Morris, London

The radical rethink on welfare is only necessary because successive governments have used it to subsidise low wages and pensions, and high rents.

I have been unable to get figures from this government, but it would be interesting to know how much housing benefit goes to pensioners, who have an entitlement to housing benefit if they are on pension credit, and how much goes to working people who do not earn sufficient to cover their rent and subsist.

It would also be interesting to know how much housing benefit is paid to private landlords whose rents are considerably higher than those in the public sector.

Were pensioners paid a decent pension and were employees paid a decent wage, there would be no need for these subsidies and our welfare benefit budget would fall dramatically.

It would also help if we started building council houses at the rate we did in the 70s. There would be three million more houses in the public sector, had we maintained that rate of construction, and the cost of housing would be concomitantly lower.

Louise Lewis London

Liam Byrne is not the first to claim Beveridge in the name of welfare reform.

Beveridge also featured in an independent report to Labour ministers five years ago, by David Freud – then an adviser to the Labour government and now the Conservative minister taking through the welfare reform bill.

In truth there’s little to separate the parties on the principles of welfare reform – both have extensively reformed benefits and both have argued for “something for something”. Much of this has been positive: incentives to work are stronger than a decade ago, support is better-targeted, and the employment gaps between the most disadvantaged and the rest have narrowed. Arguably both parties have delivered a “tough-minded social revolution”.

However, Beveridge also set out that “freedom from Idleness” requires “a Policy for Full Employment”.

As the government’s cuts to housing benefit kick in, the reform of disability benefits continues, and those out of work face the toughest jobs market for a generation, this has never been more pressing. So, as well as delivering the social revolution, let’s also focus on how we deliver support to get the long-term unemployed back into work – will the Work Programme and the Youth Contract be sufficient for the tough year ahead?

As Beveridge put it: “To win full employment and keep it, we must will the end and must understand and will the means.”

Tony Wilson Director of policy, Centre for Economic and Social Inclusion

You report that Liam Byrne cites with approval William Beveridge’s remark that “unemployment benefit after a certain period should be conditional upon attendance at a work or training centre”.

Can we be sure that Beveridge foresaw training for the unemployed being outsourced to private companies who pay executives millions from the public purse?

William Hutson, Nottingham

See also: 

www.telegraph.co.uk/Cabinet-Minister-tells-civil-servants-when-to-bring-coffee-and-soup