Brexit and Low-Income Communities

Last week, I was fortunate enough to have the opportunity to visit the House of Commons as part of the New Statesman and Webb Memorial Trust Essay Competition. Here is my shortlisted essay under the title: “In the light of Brexit, what can low-income communities in the UK do to organize themselves to become more resilient and self-sufficient?”

Too little has changed since Beatrice Webb’s minority report called for the poor law and workhouse to be scrapped. The same calls for a “national minimum” to protect the youth, access to an open labour market, ensure healthcare for all, and support vulnerable groups continue to be echoed within the Houses of Parliament’s walls. The government has failed its public role for guaranteeing these basic minimums. As evident from the vote to leave the European Union, there remains a lack of understanding on the structural causes of poverty. Without incentives to cultivate this collective responsibility, low-income communities will need to organise themselves in order to thrive. Even though ‘the seed that was to grow into the welfare state was planted’ over 100 years ago, the environment is hostile and the seeds still sit under infertile soil.

Low-income communities can be characterised as being both time-poor and income-poor. As a result of their financial hardship, broken communities form inside the wider, ineffective Big Society. Although there is recognition that these neighbourhoods can only be regenerated through resilience and long-term activism from the local level, the poor do not have the tools to recommend or implement strategies. For too long, the government has relied on one-size-fits-all policies in the hopes that low-income communities will some day succeed. Instead, we need to move away from a system of self-reliance to one that empowers individuals and their neighbourhoods, thereby increasing their responsibility, agency, and ultimately, their power.

In recent years, the UK economy has improved for the elite while the majority have been forgotten and left behind. Now more than ever, people identify themselves as working class. The British Social Attitudes Survey found that whilst routine and manual occupations make up 25% of UK workers, 60% regard themselves as working class. As a result of the greater disparity between the average wage earner and the super-rich, people regard themselves as relatively worse off. Even as more Britons work in middle-class jobs, working-class values and attitudes prevail.

Rife with anti-establishment, ‘we are the 99%’ sentiments, the vote to leave the EU can be characterised as this decade’s 2008 Financial Crisis. Shaped by economic instability and austerity, class immobility has been solidified within British society. The acknowledgement of a class divide is more evident amongst those who believe themselves to be working class. To describe Brexit supporters as northern and poor is over-simplistic and wrong. Most leave votes were cast in the south, with only London voting to remain. These voters were, mostly, economically middle class. Only a third of them cited immigration and border control as their main concern.

So what swayed them towards voting to leave the EU? Amidst perceptions that the EU is a faceless, bureaucratic, top-down authority, many Britons, particularly those from low-income communities, felt that the economy has disappointed them and that they were no better in the EU than out. As the government battles to assert its sovereignty, it has failed to acknowledge the support the country receives from the 27 other member states within the Union. An example would be the EU Cohesion Policy, whereby the European Commission disburses significant amounts of financial resources to areas where the GDP per Capital is 75% below the EU average. In the UK, counties that have benefitted include Cornwall and South Yorkshire. With these funds, people claiming unemployment benefits have decreased, creating a positive causal impact on job creation and regional economic growth. Given that there are no national policy equivalents, these effects are likely to disappear as the EU funds are taken away. It is important to note that, even if these benefits were recognized, given the distrust between Whitehall and low-income communities, it postulates the Poverty Truth Commission’s idea that ‘nothing about us without us is us’.

The UK also suffers from low intergenerational mobility, where children of poorer and lower educated parents tend to become poorer and lower educated when they grow up. Mobility is analysed through statistics on family interaction, the labour market, and public policies. This effect particularly skews the level of opportunities available in high-income countries. Currently, there is a 50% advantage or disadvantage passed on to the next generation’s Britons. High inequality and levels of poverty undermines wellbeing and social cohesion. Without equality of opportunity, it becomes clear that even after adjusting for socio-economic and geographic factors, limited access to the fruits of economic growth was the prevailing factor for Brexit voters. Pure economic growth is insufficient and inclusive growth must be pursued, an area that Theresa May emphasised as an important part of social reform. However, it seems unlikely that the Prime Minister will prioritise inclusive growth over the invocation of Article 50 for the UK to leave the EU.

What can low-income communities do? In an era where a social administrative approach is taken to combat poverty, the poor no longer want to be, as Julien Le Grand described as, ‘pawns’ to a top-down autocracy. Instead, people want to be active participants in a self-organising system, where all members of the community are involved in building an economy and society that everyone wants.

First, in order to dismantle the current top-down technocratic system of governance, we must look to increasing societal responsibility. By relying solely on individuals to solve the systemic issues affecting low-income communities, the problem is viewed as external instead of one that we can solve collectively.

The UK has long had a devolution problem both economically and in terms of policy. Whitehall controls 95% of the central government grants and communities cannot voice their opinion on local housing, education, and labour policies, issues that disproportionately affect low-income, vulnerable, and marginalised groups. A solution proposed by the government was the Localism Act 2011, focusing on devolving general powers of competence to local authorities. These provisions were directed towards increasing freedoms and flexibilities to local governments, implementing reforms to make the planning system more democratic and effective, as well as ensuring that decisions on housing are done locally. The aim was to give more rights for both communities and individuals.

These policies have not been without success and it has been shown that local integration works. Before the introduction of council-run schemes, less than 15% of the unemployed were in sustained employment that was granted through the centrally controlled Work Programme. With the support from local councils, this figure went up to 30%. However, as evident from Scotland’s call for independence and the vote to leave the EU, national and local strategies of devolution have yet to be fully implemented, much less solved. The Localism Act has failed because policies were still too detached from the realities faced by low-income communities. Although in theory, more responsibility was devolved to citizens, these powers were bestowed upon but not granted to them. Decisions, which were predominantly economic, were still made from the top and filtered down through the system.

Since then, Fairness Commissions have been established across the country, with the aim for local authorities to open conversations about how council and local partners can reduce inequality and poverty. These panels, such as the Greater Manchester Poverty Commission, are run by local cross-party MPs and funded through charities. With policy recommendations from these Commissions taken between 2011 and 2015, the Cities and Local Government Devolution Act 2016 came to force early this year. Instead of the 2011 Act’s focus on ‘economic development and regeneration’, it is now substituted by supporting ‘local authority functions generally’. The new Act also introduces directly elected mayors to combined authorities, with Manchester’s first mayoral election set for 2017. This additional layer of democratically elected representatives will also replace the general Police and Crime Commissioners.

The success of this form of devolution boils down to whether or not it can involve and engage the people it is designed to benefit. Even if there is political will, without public consultation, the Act 2016 will not come to fruition. As traditional roles within the establishment are created to bridge the communication gap between politicians and the people, low-income communities in particular need to voice their concerns and hold their democratically elected officials to account. They must begin to establish long-term relationships with their representatives and speak out against over-general or even harmful policies implemented by Whitehall. Instead of solely falling back on individual resilience and self-sufficiency, low-income communities should organise themselves in a way which will be legitimately recognised by the government.

However, pure responsibility is not enough. In order for low-income communities to flourish, we need to encourage their agency. As resources are devolved to local communities, the lines blur between economic development, social progress, and public sector reform. The system becomes more pluralistic and barriers to participation are lowered. Changes in one area will lead to the manifestation of local effects. As a result, redistribution of time and energy can be based on the social needs of the communities themselves.

Agency is encouraged through local participation. In order for low-income communities to thrive through adversity, they must take part in the processes of implementing policies. This requires resilience beyond adapting and coping through challenges. Rather, it involves playing an active role in providing evidence for on-the-ground research, policy roundtables, and processes leading to formal Commission recommendations. Through the new avenues created as a result of devolution, low-income communities must express their concerns to those who are able to influence and persuade policy makers in Whitehall.

Over the past year, the Plymouth Fairness Commission has made significant progress in reaching out to communities in need, developing a prioritization system which recognises that some people require more urgent adaptation towards their personal needs. By acknowledging that services should be provided ‘with’ people and not ‘for’ them, the Plymouth City Council provides the agent that will encourage individuals with specific needs to participate in the policy-making process. Currently, the Council is working towards increasing labour support for prisoners with mental health, developing food poverty initiatives under the Office of the Director of Public Health with Food Plymouth, and a ‘Reach for Your Future’ prospectus for parents and carers of pupils in Years 9–11. The wide range of development areas allows each department board to become champions of their individual systems, increasing both the engagement of individuals and the spillover benefits to the whole community.

Finally, with greater responsibility and agency for low-income communities to actively invest in developing relationships between them, their local government, and eventually Whitehall, these communities will be able to empower themselves. Greater empathy and innovation can serve as catalysts for collective power amongst low-income groups as they gently disrupt the technocratic system from within. As more local institutions are built from the ground up, there may be an increase in active market players through local ownerships.

Enabled by prioritising the needs of the most vulnerable, power can be reshuffled throughout the whole production process. From encouraging partnerships with local supply chains to increasing the co-production and co-design of services, the starting point for wealth can be from a more equally distributed playing field. As these relationships have been fostered organically, social innovation allows these communities to organize themselves to meet their unmet needs. This may be done through ‘minimalist’ changes to existing business structures or more ‘maximalist’ innovations in public and private domains, depending on the necessity of all connected actors. Emphatic networks can therefore be created, responding quickly to any misbalances through this nexus of people, place, and economy. Individuals are self-sufficient on his or her own, but the benefits of their work can be exemplified through mutual, innovative collaborations.

In this respect, the UK can learn from the Cleveland model for shaping local economic improvements to create more virtuous local economies. The most important aspect of the model is its engagement with anchor institutions and critical inspection of their procurement practices. The Cleveland model focuses on internal development through the creation of worker led cooperatives that deliver public services and provide other goods for local communities. Seeking out local suppliers as well as building partnerships with universities and hospitals, the model has accommodated for the delivery of a wider range of services. An emphasis is placed on minority and female owned enterprises and cooperatives to tackle the systematic challenges in the United States economy.

Currently, Preston City Council is testing the Cleveland model, with the aim to promote a local economy where poverty and equality are tackled during the pursuit towards a powerful and socially focused economy. Taking inspiration from Cleveland, the Council collaborates with higher and further education institutions, police, fire and rescue, hospitals, and housing associations. Through the adoption of a social inclusion agenda, it became the first accredited Living Wage local authority in the North of England, without the need for top-down policy implementation. By expanding its partnerships with anchor institutions, local economic resilience can be built in the form of democratisation.

Once local communities become more established, greater networks can be built to ensure that they are able to share their experiences to support vulnerable groups in other areas of the UK. As more people are empowered to change their own lives through partnerships with local governments, policies can be expanded, shared, and implemented elsewhere. The Co-operative Councils Innovation Network is a national network committed to working for and with local people to benefit their communities. The CCIN recognizes that ‘top-down’ governance can no longer effectively serve local communities. Hence, the network aims to reclaim the power of the public domain through collective action, co-operation, empowerment, and enterprise. Comprised of 23 local authorities, the network explores the delivery of public services on a practical level and also challenges the way in which local authorities relate to their communities within this new co-operative council model. By calling for the collaborative implementation of resilience and support, no single authority can refine the relationship between councils and their communities. As a result, the collective will be able to better tackle adversity and unprecedented challenges, where responsibility, agency, and power are evenly distributed within communities.

To conclude, in order for low-income communities to thrive in the light of Brexit and other times of adversity, they must come together to establish their legal right to influence local governments. Over the past six months, it has become evident that votes to leave the EU were fueled by financial hardship and negative sentiments towards a top-down government. Whitehall has done little to combat the structural causes of poverty, relying on low-income communities to defend for themselves through their own determination. Individual resilience and self-sufficiency can be effective, but long-term successes require synergy between economic development, social progress, and public sector reform. It is only with responsibility, agency, and power that communities, and low-income communities in particular, can truly flourish in a fertile environment, planting more seeds for the future generations to come.


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