Goodbye Beveridge: welfare's end nears
By David Goodhart
Steven Van Riel, Labour's director of policy at the last election, recommends that if party activists travelling to their annual conference in Manchester on Sunday want to read something truly frightening, they should bring the annual survey of what their fellow citizens think.
He is right, especially when it comes to attitudes about welfare. The latest British Social Attitudes survey spells out in agonising detail the collapse in support over the past decade or so for social security spending and what might be called poor peoples' welfare.
There is still strong support for the National Health Service and even a slight upward blip in the number of people calling for an increase in tax and spend. But whereas in previous recessions sympathy for the poor and jobless rose, this time it has continued its inexorable march downwards.
In 1991 58 per cent of Britons agreed that government should spend more on benefits even if it led to higher taxes. That figure is now down to 28 per cent. More than half believe people would "stand on their own two feet" if benefits were less generous, with only 20 per cent disagreeing. In 1993 the responses were almost exactly the reverse.
According to a YouGov poll this year for Prospect magazine 74 per cent of voters agreed that welfare payment levels should be cut. The less well-off were almost as hostile as the rich. Labour voters supported reduction by a large majority.
This narrowing of sympathy ought to benefit the Conservatives. But they too are grappling with their own welfare problem - the huge Welfare Reform Act introduced by Iain Duncan Smith, the work and pensions secretary.
But what is at the root of this apparent decline in social solidarity since the early 1990s' The "scroungers" who abuse the system have always been unpopular and their number has always been exaggerated - fraud has been in sharp decline in recent years.
More significant, changes in society and in welfare have created a greater social distance between middle Britain and the typical social security recipient. As people have grown richer the Beveridge ideal of a social security system that all citizens feel part of has given way to a residual system for the poor.
Instead of unemployment being a temporary misfortune that could befall anyone, it is increasingly associated with people in the old industrial regions who have lost the work ethic or inner city youths who never acquired it. As in America many recipients of welfare have become more like a separate caste.
Such social distance does not matter so much when a welfare system is heavily insurance-based, as it is in much of Europe and used to be in Britain. You don?t need a moral consensus when there is a clear link between what you pay in and what you get out.
But social security in Britain has become increasingly "non-contributory": paid for out of general taxation. This has happened at a time of declining trust among citizens. When life experiences and values become more diverse, it becomes harder to assume that other people will have the same attitudes to work and welfare that you do.
Meanwhile the system has grown much bigger. Last year we spent almost ?200bn on benefits and pensions, 40 per cent more in real terms than in 1999. Housing benefit and disability benefit - benefits that barely existed 30 years ago - pay out about ?20bn each a year.
As welfare has expanded it has grown away from peoples' moral intuitions. The average taxpayer thinks that too many people are getting something for nothing. But then if they need the system, they find that they get nothing for something. You may have paid national insurance for 25 years but if you lose your job you qualify for jobseekers? allowance for just six months at ?67.50 a week, after that if you have ?16,000 or more of savings you get nothing.
In a recent focus group on welfare reform organised by Demos, my think-tank, a librarian called Philip reported that when he was made redundant he spent his savings on a car so that he would qualify to get his mortgage paid and other benefits.
We are asking our battered and unloved social security system to do too many conflicting things: to provide a decent standard of living for the genuinely needy and unlucky without damaging incentives to work or save or costing too much, or offending peoples? sense of fairness.
The Tory reform has failed to square these various circles. It has introduced some caps on benefit that are popular. And from next year it is also planning to simplify the system by rolling up six different means-tested benefits into one universal credit, though this requires an ambitious computer system to function properly.
However, the Tory reform is no more contributory than the current system and at various points penalises savers - Philip will still have an incentive to buy a car.
Making a system more contributory is much easier said than done. It did not grow less contributory by accident but rather because of the end of full employment, the fact that many women work only intermittently and less caring was done within extended families. To penalise those groups that find it hard to contribute would require a degree of ruthlessness foreign to modern politics.
The alternative of paying extra to those who have contributed more is a more realistic option. Labour, which also grappled unsuccessfully with welfare problems when in office, talks about rewarding good behaviour - or those who work, care and save - and increasing the employment rate for women and young people to expand the tax base and therefore to make welfare more affordable.
But the reality is that as societies get richer and more diverse the public welfare system will inevitably become more fragmented and more residual. The clever people in all parties who care about preserving some aspects of social solidarity and redistribution in the system should be thinking about how best to combine state and private insurance - in salary protection schemes, for example - that provide the security middle-income voters want at tax levels they can bear.
The writer is director of the think-tank Demos and editor at large of Prospect
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