“Back to the forties”: Universal Credit and the rediscovery of absolute poverty
Theresa May’s decision to push forward with the rollout of Universal Credit threatens to throw Britain’s welfare provision back to the 1940s.
Last week, David Gauke, the current Secretary of State for Work and Pensions, announced that the government would continue their roll out of the ‘Universal Credit’ scheme — an unpopular decision amid suspicions that the government would u-turn on its implementation.
Instead, Gauke boldly claimed ‘Universal Credit is working’ despite consistent criticism from local authorities, charities and the media. Crucially, the subject of particular hatred was the infamous ‘waiting period’ in which claimants spend an average of six weeks waiting for their first payment — a situation which charities and local authorities argue leaves citizens stranded with no means of paying for necessities. One Labour MP recently urged May and Gauke to not ‘spoil Christmas’ amid plans to extend Universal Credit to a number of new areas during the autumn months.
When Universal Credit was first introduced in 2010 it was intended as a revolution in social welfare: a way of bringing social security into the twenty-first century whilst saving money and making the process simpler. At the Conservative Party Conference in 2010, the then Secretary for Work and Pensions, Iain Duncan-Smith, prophetically claimed that Universal Credit would restore ‘fairness and simplicity’ to the welfare system. The idea was to replace the ‘complex, outdated and wildly expensive [existing] system’ of multiple payments with a ‘single credit’: benefactors would no longer receive up to six separate payments for their respective benefits. Instead, the process would take the form of one payment, paid monthly (like a salary) to the claimant.
Additionally, benefactors were no longer limited to working an arbitrary maximum of 16 hours per week in order to receive payments. Instead, those receiving Universal Credit could work as many hours as they pleased and as their salary rose, their Universal Credit benefit would slowly decrease when it was deemed safe to do so. Tellingly, Duncan-Smith hoped such a measure would ‘make work pay’ and thus incentivise those out of work to take up full-time employment.
Interestingly, this idea gained a fair amount of support from across parliament. In a recent article written for the New Statesman, Labour MP Debbie Abrahams echoed this point stating ‘Labour has long supported the original principles of Universal Credit’: ‘to make work pay and simplify the social security system’. But just as Abrahams goes on to say, Universal Credit has fallen well short of these aims. Furthermore, this article would like to take this point one step further and argue that Universal Credit has not only failed to achieve its own objectives, but it has failed the founding principles of the welfare state as set out by its mastermind, William Beveridge.
In 1941, the wartime coalition government commissioned Beveridge to write a report surveying the state of Britain’s existing social insurance measures. Having been given the task in compensation for not having a greater role in the wartime government, Beveridge began with modest objectives but soon began to expand his remit. In his report, Beveridge recommended the government seeks to kill the ‘five giants’ pestering the welfare of the nation: want, ignorance, disease, squalor and idleness. Although Beveridge addressed all five, he was particularly interested in the eradication of his first giant: want.
Here, Beveridge hoped to establish a comprehensive system of ‘social insurance’ — the government, employees and employers would contribute to ensuring that workers and families would continue to be paid in times of sickness, unemployment, or other forms of need. In doing so, he hoped to end ‘want’ by providing ‘the minimum necessary for the means of subsistence’ — no citizen should ever have ‘want’ for basic needs. Crucially, the report defined ‘subsistence’ in the most simple terms: provision of food, water, clothes, fuel, household sundries and shelter.
As Beveridge’s recommendations began to be adopted by the postwar Labour government, there was an air of optimism in Britain. For many, the newly established welfare state had eradicated poverty — a testament to the principles Beveridge based the system on. Seebohm Rowntree, for instance, who shocked the country with his report on the level of poverty in York in 1901 and 1936, declared that similar observations were virtually invisible by 1950. Additionally, Labour’s 1950 manifesto declared: ‘today, destitution has been banished’.
However, by the 1960s, people began to think differently about poverty. For example, one particular group of sociologists from LSE began a movement subsequently named ‘rediscovering poverty’. Here, individuals like Abel-Smith and Townsend began to expand their concept of poverty to include others ‘wants’ — from affording holidays to being able to deal with sudden changes to one’s lifestyle (such as having an unexpected baby). Although such a definition is ultimately grounded in a subjective understanding of collective social activities, this idea is probably closer to what we may understand as being ‘poor’ today. The image below, taken from the Joseph Rowntree Charitable Trust, goes some way to showing differing understandings of the word ‘poverty’. Whilst Abel-Smith and Townsend may have understood poverty as being below ‘minimum income standard’, Beveridge and Attlee’s Labour government hoped social insurance would eliminate ‘destitution’ what is now often termed ‘absolute poverty’.
In a dream world, I hope that a revolution in social welfare would look to expand on Beveridge’s remit and help citizens meet the ‘minimum income standard’. However, I would argue this problem is more to do with inadequate wages and rising living standards rather than social insurance. Regardless, Universal Credit — the supposed social welfare revolution — is instead not only failing to do this, but is also failing Beveridge’s original objective.
Statistics provided by charities, local governments and sociologists repeatedly show Universal Credit to be putting citizens into the ‘destitution’ category shown in the diagram above, or ‘absolute poverty’. The Trussell Trust, for example, showed that areas with Universal Credit systems have twice the demand for foodbank packages. Additionally, dozens of reports have begun to emerge about claimants falling short of ‘subsistence means’ as a result of the six week (minimum) waiting period leading to members of the Conservative Party to call upon Theresa May to pause the roll out in order to solve the so-called ‘teething problems’ of Universal Credit — problems that are causing thousands of people to turn to an independent charity to meet their subsistence means. More worryingly still, the Trussell Trust issued a warning last month that if the rollout continued ‘foodbanks won’t be able to catch everyone who falls’.
The continued rollout of Universal Credit is causing Britain to rediscover poverty. Not just an increase of people not being able to buy holidays (as mentioned by sociologists in 1960s) but citizens not being able to afford to feed themselves. In this respect, Universal Credit is now not just failing our contemporary standards of poverty but those of William Beveridge in the 1940s. Conservatives accuse Labour of ‘taking us back to the seventies’, but are Gauke and May taking us back to the 1940s?
Although the government has responded to these criticisms, the new plans to grant benefits claimants ‘advanced payments’ are by no means enough to deal with this failure — even these are treated as loans and will inevitably lead to decreased Universal Credit payments in future. Doubts also surround how fast and substantial these amounts may be.
One recent Guardian article has suggested that perhaps the government feels Universal Credit is ‘too big to fail’ and a u-turn would expose the fragilities of the government. In fact, the continuation of the scheme is not a sign of strength but a clear display of recklessness. We cannot treat the renewal of absolute poverty as mere teething problems — people’s lives are at stake. Last week Boris Johnson, in his typical nationalistic grandeur, called on the government to ‘let the lion roar’ and return Britain to her heyday. Arguably, the ‘lion roared’ in the 1950s when countries looked on in envy at Britain’s welfare state. Now, we are at risk of betraying the principles it was once founded on.
