It is time to mount a defence of one the most hated figures in British politics today.
Iain Duncan Smith, I am here for you. I have watched the UK dissolve into raptures despising you, but it’s time to point out that while every aspect of ‘your’ very expensive welfare reform is crumbling around you, it isn’t entirely your fault.
Once upon a time, a man called William Beveridge had a conversation with a man called John Maynard Keynes. Beveridge had been appointed to the task of bringing together existing employment insurance schemes to create a political and economic tool which would kickstart a post war ‘settlement’ based on the ideas of his friend Mr. Keynes.
Keep wages low enough to allow development of our post-war economic future and allow the rebuilding of a nation after World War 2. Politics is the art of the possible, and in those discussions Keynes and Beveridge had to decide which compromises would be made if their bill was ever to be delivered.
Like IDS, Beveridge thought he had ‘learned the meaning of poverty and saw the consequences of unemployment’ from visiting poor communities he had never been part of. Like IDS, he didn’t feel the need to be troubled by the complexity of the inequality he saw, largely because he knew the tool he was building was about keeping wages low. He wanted to incentivise marriage because in those days, women didn’t exist outside marriage. The lack of them in Whitehall indicated they were cheaper when wed and so was the work they did.
Keynes’ concern was employment, not those who would always be unwelcome in the labour market and whose labour was assumed to be valueless and free within the confines of a respectable waged family.
It was decided that mothers, carers, the ill, those with disabilities, people living along the inequality faultlines that these men just could not see, would be treated as the dependents it was clearly felt they should be…. ‘Dependents’ paid just enough so wages stayed affordable, if they deserved it. Older people not expected to live long enough to cost too much. It was these people who inevitably formed the bulk of Beveridge’s unwieldy system, the rest of our social policy developing to mop up the messy results.
Economic inequality and political failure
The system Beveridge devised would be the first dynamic marker of economic inequality and political failure. A function like that has limited use for politicians. Unless you make patronising and demonising those caught up in it the subject of a political debate, their reality is structurally invisible. This is what the political blueprint Beveridge devised did and this is how it has always been.
I bet you didn’t know this, Mr.Duncan Smith, but Margaret Thatcher was a Beveridge woman. She saw the possibilities in a political and economic tool which required no evidence of social reality to hinder its progress. Economic use of our benefits system rarely troubles political debate (it’s what Beveridge would have wanted), but it has been central to the plans of every government since.
Unemployed people are treated as an aberration
Unemployed people are treated as an aberration in an economy where full employment was the aim, even when the economic system we moved into demanded static pools of them as a wage-depressing necessity. Our economy stalled at will just by stalling people. Workfare can now turn this static pool into free labour, creating further downward pressure on wages.
Our benefits system has been expanded relentlessly. Since 1997 that expansion has had clear economic aims. New Labour pursued an asset-based welfare system working symbiotically with the expansion of credit markets, long after the treasury realised in 2006, that the asset ownership underpinning this model would be impossible without more affordable housing (that they had no intention of delivering).
Asset-based welfare system
Ed Miliband’s promise on housing benefit in the 2010 Labour election manifesto centered on the deserving/undeserving distinctions created by that long-forgotten conversation between Beveridge and Keynes. The substance of the reform offered was about the only possible expansion to this asset-based welfare system. The buy-to-let market which allows existing asset holders to expand their interests with additional rentable homes, are the key beneficiaries of housing benefit reform IDS is struggling to deliver now.
The booming number of housing benefit recipients balancing work and children, are to face sanctions which were traditionally reserved for the unemployed. The whip of starvation Beveridge always thought so useful for the unemployed is to be supplemented with the whip of homelessness, to a part-time workforce disproportionately made up of working class mothers already excluded from asset ownership.
Ironically, the cumulative effect of this reform has been to make mortgage providers unwilling to lend.
Talk to Polly Toynbee, Mr. Duncan Smith. She sold workfare and a transfer of welfare spending to our working population that depressed wages in a way Beveridge would have been proud of, long before your career resurgence as her cruel bête noir. She told us, because it was Blair and Brown, that it was good for us and they meant it well.
Child poverty targets
Child poverty targets that justified the expansion of tax credits were set with housing costs excluded and no recognition of the impact of rising house prices. The housing boom was invisible, while those tax credits allowed mortgages which many are now finding unaffordable without the supplement of the payday loans market.
The mis-selling of the payment protection insurance that is supposed to form the backbone of our ‘post welfare state’, and the failure of the economic model underpinning it, is conspicuously absent from Westminster-focused discussion of the punitive ‘welfare’ regime the aftermath of a banking crisis demands.
Labour’s sales people don’t like to discuss the relationship between the planned-for payday loans market and their austerity commitments. Credit unions are suggested by Labour as a mask to the predatory credit markets who will exploit the household deficits created for their vision of a ‘post welfare state’.
I hate to say it Mr.Duncan Smith, and I am sure this is a shock to you, but the Centre for Social Justice wasn’t really supposed to plan the welfare reform you have failed to deliver. You were just there to brand it.
If Labour had won in 2010, a different thinktank would have given it a different tone, political filler ‘welfare debate’ would have been much the same, targeting the same people with the same consequences. You are only attempting to finish what Labour started in 1997. It would have been a different politician sat in the rubble of grand plans wondering where it all went wrong and who could be fired to hide it. Rachel Reeves still plans on trying to sell it post-election.
Many of us knew what you announced in 2010 was not deliverable at all. A lot of it was tried as Labour tried to usher us silently into a post welfare state. That was never a discussion that would have been allowed in Westminster-focused press. The centre-left alone worked to prevent that, the right certainly won’t have it.
Welfare reform that cannot be delivered
I’ll let you into a secret, Mr.Duncan Smith. The reason the poppets orbiting the Labour Party want us to shout so loud at you is because they are selling what you are failing to deliver now. They don’t have an alternative or the knowledge to create an asset-based welfare for a post financial crisis, post housing boom, aged population. The genius of Labour is that it led and designed welfare reform that cannot be delivered. Shouting how mean you are makes them feel better about it.
We are reaching the point where the contradictions between political and actual reality can no longer be hidden. Beveridge’s antiquated and much-adapted system is creaking into complete failure with horrific consequences.
So today Mr. Duncan Smith, I wanted to let you know that when you are left to carry the can for the failure of the welfare reform you were charged with delivering in 2010, there is at least one person who knows that can is not entirely yours.
Photo: Official Portrait of Iain Duncan Smith, Work and Pensions Office