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Universal Credit, Ideology and the Politics of Poverty

In a piece we’ll be publishing in the journal later this year, George Morris examines Universal Credit's Thatcherite lineage and asks whether it could be transformed by a Labour government into a system that worked to truly counter poverty.

3 March 2016

George Morris is a member of the Tatton Constituency Labour Party and a commissioning editor for Renewal.

In 2002, as the Conservative Spring Forum approached, the floundering Tory leader, Iain Duncan Smith, announced a newfound concern for the most vulnerable people in society, a conversion supposedly provoked by a visit to the Easterhouse estate in Glasgow a month earlier. To many, it seemed a contrived and unconvincing change of heart. A favourite of Margaret Thatcher, an ally of Ann Widdecombe, and undoubtedly a ‘rocker’ rather than a ‘mod’ under William Hague, IDS won the party leadership with a reputation as a right-winger against the centrist Europhile Ken Clarke. Duncan Smith’s ill-fated leadership of the party was confused and contradictory. Despite seeming to have discovered the necessity of ‘modernising’ and a desire to see the left’s monopoly on ‘social justice’ broken apart, he was prone on occasion to right-wing outbursts.1

The year after his Easterhouse ‘conversion’, Duncan Smith was deposed, and he busied himself while on the backbenches with setting up a think-tank, the Centre for Social Justice (CSJ). This would go on to set the agenda for much of the social policy of David Cameron, a leader more committed than Duncan Smith to ‘modernising’ the party. The CSJ’s emphasis on tackling social problems with traditional values, and its hostility to ‘welfare dependency’ seemed to provide Cameron with material that was both compassionate and authentically Conservative.2  Little surprise, then, that following the formation of the Coalition government in 2010, Duncan Smith was given control of the Department for Work and Pensions. At the party conference of that year he announced plans to revolutionise the welfare system with the introduction of Universal Credit. For Duncan Smith, this was a very personal agenda, something to which he became firmly ideologically committed.

This article examines the intellectual, ideological and political background to Universal Credit. Far from being part of a new ‘compassionate conservatism’, the background from which the policy emerged, in particular the work of the Centre for Social Justice, is in many ways shaped by older Tory ideas, including elements of Thatcherism. Its moral attitude to poverty is presented as something new while in fact being almost indistinguishable on closer inspection to older ideas. In the conclusion, I will comment on the possibilities for reform of Universal Credit by a future social democratic government, and argue that understanding its background allows us to distinguish between the desirable and undesirable elements of the policy.

How does Universal Credit work?

The most obvious intention of Universal Credit is to simplify the benefits system. It is intended to replace income-based job seekers allowance (JSA), income-based employment and support allowance (ESA), income support, working tax credit, child tax credit and housing benefit. A single form will allow claimants to apply for benefits, and will usually be filled out online.

Because Universal Credit will replace existing in-work and out-of-work benefits, it will be able to smooth the transition from benefits to employment. Payments will be withdrawn as earnings from work increase, after a certain earnings point. This earnings disregard will depend on the circumstances of the claimant, such as whether they have children or are disabled. The rate of withdrawal will be 65 per cent; that is to say, for every £1 a person earns in work, they will lose 65p in Universal Credit. Importantly, the rate of withdrawal can be altered by policymakers, as George Osborne had originally planned to do in the Autumn Statement, and is more likely to be able to do now that Duncan Smith has resigned; of course, the higher the rate of withdrawal, the less significant the policy becomes. The system allows a more gradual transition from benefits than the current system, which reduces benefit after a smaller amount of earnings and at the rate of a pound for every pound earned in work. The replacement of in- and out-of-work benefits also means that it will no longer be necessary for claimants to sign on and off as they move in and out of employment. Combined, these changes are supposed to provide incentives to claimants by ensuring that anybody in work will be better-off than anybody out of work, and that there will be no fear that by taking up work and signing off a benefit the claimant will lose any form of income if they are suddenly made unemployed again.

Universal Credit will be assessed and paid on a monthly basis, in order to simulate pay received for work.3  Cohabiting couples will no longer apply for benefits individually, but will apply for and receive Universal Credit together.4

There are strict conditions on receipt of Universal Credit in most cases, which will be laid out in a ‘claimant commitment’, usually drawn up by a ‘work coach’ in a local Job Centre, setting out precisely what a person is expected to do in return for payments. Out-of-work claimants will be expected to look for or prepare for work for 35 hours a week. The penalties for failing to comply with the ‘claimant commitment’ will be more severe than under the old system. As part of the stricter conditionality of Universal Credit, Job Centre advisers will be able to refer a claimant to a work experience placement. Failure to comply with this, as with breaking any of the terms of a claimant commitment, could lead to a benefit sanction, though as will be seen below this part of the reforms has come under legal challenge.

‘Pathways to Poverty’ and the ‘Welfare Society’: compassionate Conservatism or Thatcherism with a human face?

The year after he resigned as Conservative leader, Iain Duncan Smith founded the Centre for Social Justice, along with Tim Montgomerie, who had been his chief of staff during the last few months of his leadership, and Philippa Stroud, who went on to work as a Special Adviser to Duncan Smith in the Department for Work and Pensions (DWP). The CSJ was intended to provide support for ‘compassionate conservatism’, and so was a useful resource for David Cameron as he set himself the mission of ‘modernising’ the Conservative Party. On the day he was elected leader in 2005, Cameron commissioned the CSJ to conduct a thorough investigation into the causes of poverty in the UK. An interim report, Breakdown Britain was published in 2006, followed in 2007 by the final report Breakthrough Britain. The idea that would be developed in government as Universal Credit was first proposed in 2009 in the report Dynamic Benefits, which built on the findings of this earlier work.

All three publications are guided by a belief in the importance of what the CSJ calls ‘pathways to poverty’: family breakdown, educational failure, worklessness and economic dependence, addictions and indebtedness. The Times has described these five ‘pathways’ as a twenty-first century equivalent to William Beveridge’s five giants, a description that the CSJ is more than happy to accept.5  All five pathways are interconnected, and where the researchers found one they could be fairly sure that another was close by. Sometimes the relationship could be causal – addiction, for example, might lead to family breakdown – but the reports rarely raise the question of causality more generally; they are instead happy to accept the pathways as fundamental.

In the CSJ’s view, the left, in trying to help the poor and unemployed, have simply added to their miseries. This is not just an attempt to borrow ‘social justice’ from the left, but rather to wrest it from them completely – this is not a conservative alternative to progressive policy on welfare, but rather a claim that only Conservatism can offer a solution to social issues. The idea of ‘pathways to poverty’ serves as a way for the right to explain growing economic inequality and falling social mobility without recourse to a critique of free market capitalism; social breakdown is seen not as the result of an economic model which fails the poor, but as the cause of poverty in itself, sustained by a welfare state that prevents people from escaping these pathways.

The key importance of the pathways to poverty is that they can only be blocked off with Conservative values. Though this is never stated explicitly, the ideology informing the analysis offered by the CSJ is easy to detect. The Conservative Party has long prided itself on not being an ideological party, a claim to normativity arguably more ideologically ambitious than anything attempted by the Labour Party. The CSJ sees itself as moderate and almost common-sensical, a self-perception also characteristic of the Conservative Party.

The CSJ believes its approach to be novel, and to transcend traditional differences between left and right. In an overview of the Breakthrough Britain report in 2007, Iain Duncan Smith wrote that

This report steers a course between two different views of how to fight poverty. The traditional ‘laissez-faire’ approach understands poverty simply as a product of wrong personal choices about family, drugs, crime and schooling. That view says that poverty is always the fault of the person who makes the wrong choices. On the other side of the political divide, the elimination of poverty is seen principally as the job of government – thus if a person is in poverty it must be the government’s fault and it must be the government that develops a top down solution to the problem. Our approach is based on the belief that people must take responsibility for their own choices but that government has a responsibility to help people make the right choices. Government must therefore value and support positive life choices.6

In an overview of Breakthrough Britain 2015, a discussion of the changes brought about by the Coalition government since the original report had been published, Christian Guy, the CSJ’s Director, and Alex Burghart, Directory of Policy, reproduced this paragraph almost verbatim.7  There was one major change; they now stated that the laissez-faire view ‘often characterized the approach of Conservative governments’, while the statist approach was ‘more associated with Labour governments’.  Setting the debate up in this way, the CSJ makes a claim to be advancing a new (dialectical, but decidedly non-materialist) politics of poverty, synthesising the views of a libertarian right with those of a statist left – it chimes well, then, with the efforts of those around Cameron to ‘modernise’ the Conservative Party. In reality, however, this portrayal of the debate, and of the work of the CSJ as going beyond the traditional views of Labour and the Tories, is misleading. Its view of Labour’s supposed approach to poverty is a simplistic caricature. But so is its view of older Conservative approaches. Far from being at a progressive conservative, post-Blair cutting edge, the CSJ’s view has much in common with a Thatcherite view of poverty.

Thatcherites did not simply hold that poverty was the result of individual choices and was nothing to do with the state. On the contrary, Thatcherites believed that state action had fostered the cultural factors that led to poverty; the ‘socialist’ welfare policies of successive governments had drained the British people of their thrifty, entrepreneurial virtues and had condemned them to a life of feckless dependency.8  This view was indeed ‘quite moralistic and libertarian’, as Guy and Burghart describe the traditional Tory position, but it was not one that neglected a role for the state in understanding poverty; on the contrary, in the belief in the importance of individual choices and state actions, the Thatcherite conception of the roots of poverty has much in common with the CSJ and its ‘compassionate conservatism’. The language used is softer and more positive – Guy and Burghart admonish the government for its ‘unhelpful rhetoric’ of scroungers vs. strivers, and for placing too much emphasis on the savings made from welfare reform rather than on the effect on the lives of the poor9 – but the underlying ideas are not so distinct as the CSJ suggests.

One of the ways in which Cameron attempted to distance the Conservatives from the ‘Nasty Party’ image of the past was with the slogan ‘There is such a thing as society, it’s just not the same thing as the state.’ He announced this in his victory speech when he was elected leader in 2005, and it is still possible to buy a poster featuring the slogan in the party’s online store. But in fact, the phrase had been used earlier, as the title of a collection of essays on social problems by conservative thinkers, the introduction to which was written by the then Conservative leader, none other than Iain Duncan Smith.10  The idea had a parallel with the idea of the ‘Big Society’, associated in particular with the ‘Red Toryism’ of Philip Blond, who was at the time an important intellectual influence on Cameron. In the CSJ’s reports on the state of Britain, a rather similar idea is put forward under the name of the ‘Welfare Society’, defined in Breakdown Britain as ‘that which delivers welfare beyond the State.’11  It ‘remains the largest deliverer of care in Britain today, dwarfing the state and without which the state would be overwhelmed.’

The size of the ‘Welfare Society’ is unsurprising, however, when one learns that the Welfare Society incorporates not just voluntary organisations, charities and philanthropists, but families. ‘I think of a wife caring for a sick husband, a son caring for an ageing mother, or even an extended family rallying round to help a young relation tackle their drug addiction,’ wrote Duncan Smith. Fundamentally, the rhetoric of the ‘Welfare Society’, it seems, means families, rather than the state, taking care of vulnerable and struggling people. Despite the fluffy language, this sounds a lot like an excuse for the shrinking of the welfare state and filling the gaps with individual goodwill and personal networks to assist those in need. The rhetoric also ignores the fact that this amounts to redistributing the duty of care from the state to individuals who almost by definition are also members of poorer communities. Women and unpaid volunteers are the backbone of the Welfare Society, and will be put under greater and greater pressure as the state is rolled back. In its emphasis on the family, it is at the same time a way for the CSJ to bolster its argument that family breakdown is a crucial pathway to poverty.

This is also, once again, closer to Thatcherism than the CSJ’s rhetoric would suggest. ‘There is such a thing as society, it’s just not the same thing as the state’ is, of course, supposed to sound like a rejection, or at least a modification, of Thatcher’s infamous ‘There is no such thing as society.’ But what Thatcher actually said was more interesting than that, and is worth quoting at length here:

I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government's job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations…There is no such thing as society. There is a living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate.12

This emphasis on families, obligations, and the duty to help others is not dissimilar to the idea of the Welfare Society put forward by Duncan Smith. It is not clear at all, when the original quote is read in context, what Cameron’s soundbite about society and the state really meant, because Thatcher clearly did have a sense of society in many of the same ways as Cameron, Iain Duncan Smith and the CSJ; she simply rejected the conflation of ‘society’ with its organized expression in the form of the state.

The Centre for Social Justice has been at the forefront of thinking on social policy for Cameron’s leadership of the Conservative Party, and is clearly the intellectual bedrock of Iain Duncan Smith’s tenure at the DWP. The CSJ sees itself as breaking the mould and challenging the older terms of debate, but in fact its ways of thinking remain rooted in many of the same ideas as the Thatcherism that the CSJ is supposedly conscious of moving away from. It was from this ideological background that the idea of Universal Credit emerged.

The dynamic evolution of Dynamic Benefits

In Iain Duncan Smith’s preface to the 2009 CSJ report Dynamic Benefits, entitled ‘Breaking the Dependency Spiral’, this ideological background is clearly laid out. Duncan Smith wrote that ‘the emerging underclass’ lived in communities characterised by ‘pathways to poverty’.13  He claimed that ‘the biggest barrier to those entering work for the first time was the benefit system itself,’ because the benefits system reinforced these pathways to poverty by punishing ‘positive life choices’ and ‘constructive behaviour’, such as ‘couple formation, buying a home or saving money.’ Work itself was put forward not only as something of financial, social and psychological benefit to the citizen, but as something that demonstrated the concept of a link between effort and reward; nonetheless, ‘we must also recognise that few of those out of work would look upon work as a moral choice, rather than a practical one.’ Despite the moral benefits of work, most people were incentivised to work for money; we accept this of people already in work, but seem not to do so when it comes to the benefit system. Work, he claimed, was ‘the most sustainable route out of poverty.’  The emphasis on the moral elements of work and on the cultural causes of deprivation seems to imply that the inculcation of moral values and positive life choices was one of the ways work set people free from poverty.

Dynamic Benefits laid out the basis for what was to become Iain Duncan Smith’s flagship policy, but it does not represent a proposal for Universal Credit in the same form as it would later be put forward in the 2010 White Paper, Universal Credit: welfare that works. Understanding the alternatives that were considered and rejected by Duncan Smith and his team helps to understand the key values informing the policy as it developed. In 2009 the Dynamic Benefits report argued for a two-part system, comprised of Universal Work Credit, which was to be aimed at those who were out of work or on very low wages, and Universal Life Credit, which would cover other living expenses for both the unemployed and people on low incomes. But by the time the CSJ responded to the DWP’s July 2010 Green Paper on welfare reform, they were endorsing a single Universal Credit, which was the evident preference of the Green Paper’s authors.14  Indeed, the Green Paper was suffused with rhetoric about the state, welfare system, poverty, and society which echoed the CSJ’s analysis strongly.15

The green paper suggested several alternatives, eventually rejected in favour of Universal Credit; a Single Unified Taper, a version of the Single Working Age Benefit (unpleasantly, SWAB) proposed by the ippr, the Mirrlees model proposed by the IFS and a negative income tax as suggested by the Tax Payers Alliance. Several of these benefits did not do away with the distinction between in-work and out-of-work benefits. The first, a Single Unified Taper, would have preserved the current system of benefits but would have standardised the rate at which support was drawn when a person entered work. The DWP felt that this did not simplify the system in the way that reform was intended to do. The number of benefits and resulting complexity was one of the critical concerns of the DWP, though it is arguable how simple Universal Credit is in its final form. The SWAB would have given all working-age recipients a flat rate income replacement, regardless of whether they were unemployed, single parents, or disabled, leaving Tax Credits unaffected. Eliminating the distinction between in-work and out-of-work benefits was a key aim of the DWP, and the SWAB, like the Single Unified Taper, was rejected. The SWAB would also undermine the contributory principle, another ideologically undesirable outcome.16

The Mirrlees model more closely resembled Universal Credit. It would have combined all family benefits, housing support and tax credits into a single family allowance, which would have been withdrawn via Income Tax. This was rejected on the grounds that it would cost more than Universal Credit while also providing less support for the unemployed. In the negative income tax model, household eligibility for the negative tax would be set at a given proportion of equivalised median income. The level of the negative income tax would be reduced as the household income increased; this would be designed to ensure that the reduction (when taking into account Income Tax and National Insurance contributions) was constant until the support was reduced to zero. The effects, the white paper said, were ‘difficult to predict,’ but would mean either a hugely increased cost or ‘substantial numbers of people in vulnerable situations losing entitlement.’ Universal Credit, in their eyes the most simple, cost-effective and fair option, retained the ideologically desirable contributory principle by not merging contribution-based JSA, and was hence the DWP’s favoured policy.17

The white paper which finally resulted on the subject stated that Universal Credit would evolve as time progressed, but did not anticipate that one of the main forces in the evolution of the policy would be the rivalry between George Osborne and Iain Duncan Smith, culminating in the latter’s quite spectacular resignation in March 2016. Importantly, Dynamic Benefits proposed a 55 per cent withdrawal rate, but pressure from the Treasury meant that the eventual white paper on Universal Credit set the rate at 65 per cent. It was reported following his defeat over tax credits in the House of Lords that the Chancellor was considering a 75 per cent withdrawal rate, something which Duncan Smith indicated would be a resigning issue for him; indeed, the more severe the withdrawal rate is set, the less point there is in implementing the reform.18  The Secretary of State is keen to argue that the reforms will save money in the long run, but the initial costs at a time of austerity mean that welfare reform, to which Osborne is much less sympathetic than some of his colleagues, is a clear source of tension in the government. The Conservatives’ austerity agenda has had an inevitable impact on Universal Credit. A paper on the subject published by Policy in Practice in 2014 and co-written by one of the architects of Universal Credit maintains that a 55 per cent withdrawal rate should remain the long-term goal. It seems to be the case that altering the withdrawal rate will be a key way for governments to redistribute – or raise – revenue.19

Part of the welfare reform agenda has also been subject to legal challenge. In 2012 Caitlin Reilly, an unemployed graduate of the University of Birmingham, and Jamieson Wilson, an unemployed driver, sought to challenge the ‘workfare’ policy connected to welfare reforms. Under the policy, claimants were mandated to work in return for their benefits, and would be sanctioned for refusing to do so. The High Court ruled in August 2012 that the policy was not a form of slavery and did not breach the European Convention on Human Rights, but did rule that the DWP had provided participants with inadequate details of the Work Programme. The Court of Appeal ruled the following year that the scheme was unlawful, both because of a lack of clear information and because Parliament had not authorised the DWP to implement such programmes. In March 2013 the government updated the law to authorise such schemes and to prevent having to pay out on withheld benefits with the Jobseekers (Back to Work Schemes) Act. Reilly and Wilson’s lawyers then challenged the retrospective change in the law, and were successful in July 2014 when the Supreme Court ruled that this contravened Article Six of the European Convention on Human Rights; the government said it would appeal. Given multiple and much-publicised injustices attached in particular to ‘workfare’ and the newly enhanced system of sanctions, it seems likely that such legal challenges will continue to hamper the DWP’s reforms, and will have to be addressed by policy changes.

Social democracy and Universal Credit

Behind schedule, hugely expensive and burdened by repeated IT failings, Universal Credit can often seem like a throwback to the New Labour years. Grand projects of this nature are not the sort of thing that one tends to associate with Conservative governments. Many Conservatives would not embark on grand, technocratic projects of this nature; indeed, in the late 1970s Thatcher rejected the idea of a negative income tax, supported by her predecessor Ted Heath, in part for this reason. But far from being un-conservative, we have seen how Universal Credit is rooted in Conservative thinking about poverty and the state, and that much of this thinking demonstrates less of a break with older tendencies in Conservative thought than some of its advocates suggest. Because this conservative thinking has shaped the policy as it now stands, investigation of the intellectual origins of Universal Credit will be crucial to efforts to reform it.

At the 2015 general election, all three main parties were in principle in favour of Universal Credit. Labour said that it would ‘pause and review the programme’ to ensure that it was ‘affordable and fit for purpose’, but supported the idea that the welfare system should allow a smooth transition into work.20  The Liberal Democrats committed to completing the introduction of the new system.21 This transition from the pet think-tank of a failed Conservative leader to the political mainstream in just six years is quite an impressive achievement, and it is a path that has been made easier by the fact that, in some ways, the policy makes sense and will benefit claimants. Just as unemployment benefit was forced to change by the emergence of long-term unemployment in the 1930s, so the welfare system must adapt to the ‘flexible’ labour market of today, increasingly characterised as it is by low wages, insecurity, and underemployment.22

There is much about Universal Credit that social democrats should in theory support. In particular, by simplifying the system and supporting people as they enter work, it will make the welfare state more responsive to the needs of the poorest. Yet much about it is objectionable, because of the ideology that has shaped it. The paternalistic rhetoric of the Centre for Social Justice on ‘positive life choices’ should be challenged, and their implicit portrayal of working-class life as drunken, drug-addicted, promiscuous and borderline criminal debunked. This rhetoric has affected Universal Credit in particular ways. For example, payments will be made monthly to simulate a salary – this is a pointless and patronising way of interfering with already established methods of budgeting, and one that does not reflect the way low-income workers are paid in many cases. Allowing claimants to choose whether they wish to be paid monthly or weekly in order to fit with their own budgeting methods would be one way to make the system more responsive to the needs of the claimant. A survey carried out for the DWP found that 42 per cent of respondents believed that it would be more difficult to budget if payments were made monthly, and that almost half of the sample currently planned their finances on a weekly basis.23

Despite the supposed desire to award payments in the same manner as payment for work, couples rather than individuals will apply for Universal Credit. Some groups have highlighted that this makes many people, particuarly women, vulnerable and, ironically given Conservative rhetoric, less independent.24 This method of payment should be abolished and replaced with individual payments to counter the risk of abuse.

The conditionality of Universal Credit – and the enhanced conditionality of the benefits system in general while Universal Credit is introduced – has drawn much media attention. Examples of despicable applications of the sanctions system are easy to find. A man who had been offered a job starting in two weeks was sanctioned for not looking for work in the meantime.25  A man who missed an appointment at the Job Centre after informing them that he would do so to attend his father’s funeral was sanctioned.26  Ceri Padley missed an appointment at her Job Centre and was sanctioned, despite the fact that she had missed the appointment because she was at a job interview.27  A man with heart problems had a heart attack during a work capability assessment, and was sanctioned for failing to complete the assessment.28 Stricter terms, overworked Job Centre workers, and an obsession with conditionality and the ‘claimant commitment’ have created gross injustices within a system supposedly designed to support the most vulnerable people in society.  The system must take greater consideration of the needs of the claimant, something that Duncan Smith himself has repeatedly stressed; this can only be achieved, however, by abandoning Duncan Smith’s attitudes towards poverty and the poor. The relationship between Job Centre workers and claimants should be a relationship of trust and cooperation, which remains difficult while the conditionality and sanctions regime is so severe. Fundamentally, the benefits system must come to see the claimant as a citizen, not as an embodied social problem.

It needs to be pointed out, too, that Universal Credit does not actually address some of the issues that it is designed to solve. The frequently asserted claim in CSJ literature that work is the best route out of poverty is flatly contradicted by the fact that most people in poverty in Britain are also in work. Duncan Smith himself seems to realise this—witness his fist-pump in the Commons as the Chancellor announced the so-called National Living Wage. Patterns of employment also matter, something that the simplification of welfare brought by Universal Credit will help with, but which is generally downplayed by the CSJ. The CSJ has also been guilty at times of grabbing headlines rather than addressing the real issues. In 2013, for example, the CSJ published a report on ‘benefit ghettos,’ areas where shocking numbers of people claim out-of-work benefits. They cited Rhyl West, a ward in Denbighshire, as having a 68 per cent claimant rate.29  Data for 2014 confirms that Rhyl West did have a much higher rate of JSA claims than the national average, at 10.9 per cent as opposed to 2.2 per cent in Britain as a whole.30 But the vast majority of the shocking claimant rate suggested by the CSJ would seem to come from incapacity benefits, not from JSA; in Denbighshire as a whole in 2015, 16 per cent of out-of-work benefits claims were for JSA, whereas 70 per cent were for ESA and incapacity benefits.31  Rather than this being a welfare trap, we ought to ask if there are health inequalities that a poverty reduction strategy ought to be addressing. The government, of course, believes that those claiming sickness ought to be encouraged to work regardless. In general, as the TUC has pointed out, the system seems to offer more carrot than stick, and Duncan Smith seems to revel in tabloid-friendly shirker-bashing rhetoric, despite frequent admissions that most people want to work.32  Job creation, increased wages and improved healthcare must go hand in hand with welfare reform if social issues are really to be addressed, something that the rhetoric of Conservative welfare reformers can obscure.

We must also address the claim that the welfare state is responsible for growing inequality. Doing so is not difficult, because the claim is absurd. Indeed, of all the claims made by the CSJ this is the one that stretches their efforts to capture social justice for conservatism far too far. It is important to recognise that the CSJ’s political project is not merely to come up with poverty reduction strategies for the Conservative Party – which should be applauded – but to convince people that social democratic alternatives cause poverty, inequality and injustice. We need to recognise that while much about Universal Credit is good, it is shaped by efforts to fundamentally undermine and discredit forms of politics that have the fight for a fairer, more equitable and more just society as their foundation.

Frank Field and Andrew Forsey’s recent audit of working-age welfare reform since 2010 is broadly scathing about the faltering and glacially slow roll-out of Universal Credit, and the compromises and cuts that have already beset the programme.33  The resignation of Iain Duncan Smith in March 2016 was widely reported as a blow to the career aspirations of George Osborne, but it may also prove to be a critical blow to Universal Credit. As has been noted, this is a largely personal agenda for Duncan Smith. Unlike many of his colleagues, Duncan Smith is believable when he says ‘I have no personal ambitions’, as he said, for example, on The Andrew Marr Show following his resignation; this has made him unusually willing to battle with the Treasury. Whether or not such commitment can be expected from Stephen Crabb, his successor at the DWP, remains to be seen. So few people are currently enrolled on Universal Credit that it could probably be dropped, albeit with great expense and embarrassment. Either way, George Osborne is now much more likely to get his way, and to raid Universal Credit in order to recompense for his defeat over tax credits; as has been noted, raising the rate of withdrawal by too much risks making the policy basically pointless. At the time of writing, the future of Universal Credit looks far from certain.

Social democrats must ask difficult questions about the extent to which the ‘Uber economy’ or, more broadly, ‘flexible working’ are inevitable. If so, we need social security which can deal with such working patterns. Universal credit may provide an architecture which, if reformed, could help deliver such social security. This essay has sought to argue that Universal Credit is not irredeemable, but that reform must be based on an understanding of its ideological origins. With reflection and reform, Universal Credit could become a way of helping working people and the unemployed; without it, it will continue to be associated with efforts to punish them.

 

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Further reading

21st Century Welfare (2010), Department for Work and Pensions.
21st Century Welfare: Response of the Centre for Social Justice (2010), Centre for Social Justice.
Benefits Simplification: Seventh Report of Session 2006-07 (2007), Vol. I. Work and Pensions Select Committee.
Breakdown Britain: Interim Report on the State of the Nation (2006), Centre for Social Justice.
Brewer, Mike, James Browne, and Wenchao Jin (2011), Universal Credit: A Preliminary Analysis, Institute for Fiscal Studies.
Brewer, Mike, Emmanuel Saez, and Andrew Shephard (2008), Means-Testing and Tax Rates on Earnings, Institute for Fiscal Studies.
Brewer, Mike, and Paola DeAgostini (2015), Credit Crunched: Single Parents, Universal Credit and the Struggle to Make Work Pay, Euromod.
Duncan Smith, Iain (2007), Breakthrough Britain: Chairman’s Overview, Centre for Social Justice.
Dynamic Benefits: Towards Welfare That Works (2009), Centre for Social Justice.
Finch, David, Adam Corlett, and Vidhya Alakeson (2014), Universal Credit: A Policy under Review, Resolution Foundation.
Field, Frank, and Andrew Forsey (2016), Fixing Broken Britain? Civitas.
Ghelani, Deven, and Lisa Stidle (2014), Universal Credit: Towards an Effective Poverty Reduction Strategy, Policy in Practice.
Guy, Christian, and Alex Burghart, (2014), Breakthrough Britain 2015: An Overview, Centre for Social Justice.
Judge, Lindsay (2013), Will Universal Credit Work? TUC.
Keohane, Nigel, and Ryan Shorthouse (2012), Sink or Swim? The Impact of the Universal Credit, Social Market Foundation.
Martin, David (2009), Benefit Simplification: How, and Why, It Must Be Done, Centre for Policy Studies.
Oakley, Matthew (2014), Independent Review of the Operation of Jobseeker’s Allowance Sanctions Validated by the Jobseekers Act 2013, Department for Work and Pensions.
Reforms to Universal Credit (2015), TUC.
Sainsbury, Roy, and Kate Stanley (2007), One for All: Active Welfare and the Single Working-Age Benefit, Institute for Public Policy Research.
Signed On, Written Off: An Inquiry into Welfare Dependency in Britain (2013), Centre for Social Justice.
Smith, Iain Duncan, Gary Streeter, and David Willetts, eds. (2002), There Is Such a Thing as Society, Politico’s.
Tarr, Amy, and Dan Finn (2012), Implementing Universal Credit: Will the Reforms Improve the Service for Users? Centre for Economic and Social Exclusion.
The Journey to Work: Welfare Reform for the next Parliament (2014), Centre for Social Justice.
Transforming Lives to Strengthen Britain: A Social Justice Manifesto for 2015 (2015), Centre for Social Justice.
Tu, Trinh, and Steven Ginnis (2012), Work and the Welfare System: A Survey of Benefits and Tax Credits Recipients, Department for Work and Pensions.
Universal Credit at Work (2014), Department for Work and Pensions.
Universal Credit: Welfare That Works (2010), Department for Work and Pensions.
Welfare Reform Bill 2011 - Universal Credit Payment Issues (2011), Women’s Budget Group.

 

Notes

1 Tim Bale, The Conservative Party: From Thatcher to Cameron, Polity Press 2011, pp134-193.
2 Christian Guy and Alex Burghart, Breakthrough Britain 2015: An Overview, Centre for Social Justice 2014, p5.
3 Universal Credit: Welfare That Works, Department for Work and Pensions 2010, p34.
4 Ibid., p.68.
5 Guy and Burghart, Breakthrough Britain, p2; Peter Riddell ‘This is about more than adding to the blessings of wedded bliss’, Times 11.7.07.
6 Iain Duncan Smith, Breakthrough Britain: Chairman’s Overview, Centre for Social Justice 2007, p7.
7 Guy and Burghart, Breakthrough Britain, p5.
8 Florence Sutcliffe-Braithwaite, 'Neo-Liberalism and Morality in the Making of Thatcherite Social Policy', Historical Journal, 55 2012, p512.
9 Guy and Burghart, Breakthrough Britain, p6.
10 Iain Duncan Smith, Gary Streeter, and David Willetts, eds., There Is Such a Thing as Society, Politico’s 2002.
11 Breakdown Britain: Interim Report on the State of the Nation, Centre for Social Justice, 2006, pp14-15.
12 Margaret Thatcher, Interview for Women’s Own, 23.9.87, Margaret Thatcher Foundation Website, document 106689.
13 Dynamic Benefits: Towards Welfare That Works, Centre for Social Justice, 2009, pp4-9.
14 21st Century Welfare: Response of the Centre for Social Justice, Centre for Social Justice, 2010.
15 21st Century Welfare, Department for Work and Pensions 2010, p10. & p19.
16 Universal Credit: Welfare That Works, p.65.
17 Ibid.
18 Matt Dathan, ‘Iain Duncan Smith’s ‘threat to resign’ moves closer as George Osborne calls his bluff over further welfare cuts’, Independent, 9.11.15, http://www.independent.co.uk/news/uk/politics/iain-duncan-smiths-threat-to-resign-moves-closer-as-george-osborne-calls-his-bluff-over-further-a6726771.html.
19 Deven Ghelani and Lisa Stidle, Universal Credit: Towards an Effective Poverty Reduction Strategy, Policy in Practice 2014, p93.
20 Labour Party Manifesto, 2015, p47.
21 Liberal Democrat Manifesto, 2015, p43.
22 W. R. Garside, British Unemployment 1919-1939: A Study in Public Policy, Cambridge University Press 1990.
23 Trinh Tu and Steven Ginnis, Work and the Welfare System: A Survey of Benefits and Tax Credits Recipients, Department for Work and Pensions 2012, p4.
24 Welfare Reform Bill 2011 - Universal Credit Payment Issues, Women’s Budget Group, 2011.
25 Yvonne Roberts, ‘York strives to pay living wage as cuts bite and poverty spreads’, Guardian, 7.1.16, http://www.theguardian.com/society/2013/feb/10/york-living-wage-spending-cuts-poverty-spreads.
26 ‘Jobseeker had benefits cut for attending his father’s funeral’, Political Scrapbook, 19.2.14, http://politicalscrapbook.net/2014/02/jobseeker-had-benefits-cut-for-attending-his-fathers-funeral.
27 Tom Gardner, ‘Unemployed graduate has benefits stopped after missing a job centre appointment because she was at an INTERVIEW’, Daily Mail, 14.6.14, http://www.dailymail.co.uk/news/article-2347281/Unemployed-graduate-benefits-stopped-missing-job-centre-appointment-INTERVIEW.html.
28 HC Deb 19th March 2013, vol 560, cols 839-40.
29 Signed On, Written Off: An Inquiry into Welfare Dependency in Britain, Centre for Social Justice 2013, p42.
30 See https://www.denbighshire.gov.uk/en/your-council/statistics-and-data/economy.aspx.
31 See http://www.nomisweb.co.uk/reports/lmp/la/1946157386/report.aspx.
32 Lindsay Judge, Will Universal Credit Work? TUC 2013, p12.
33 Frank Field and Andrew Forsey, Fixing Broken Britain? Civitas 2016, pp75-79.
Renewal