The term welfare reform might naturally suggest improvements in welfare systems. However the term is usually, although not always, used by those who have a negative view of the welfare state and who propose policies to reduce the level of welfare provision. A cynic might argue that the word ‘reform’ has been chosen precisely because it disguises their real intentions and implies an improvement that doesn’t exist. However, critics of the welfare state do believe that cuts to the welfare state are an improvement, by the light of their own theory.
One of the areas upon which critics of the welfare state have placed a great deal of emphasis is the fact that providing income security might reduce our incentive to do paid work, and that this may be damaging to society as a whole or to an individual, who might actually benefit from working. However, plausible as this may sound, it should be noted that countries with high levels of income security, like Denmark, also tend to have low levels of unemployment.
It is also worth noting that the term ‘welfare’ is also ambiguous. The welfare state is best understood as combining a system of income security with systems of education, healthcare, housing and disability support. However often the term ‘welfare’ is associated simply with income security or benefit payments. This may be because income security systems are designed in ways which seem more exclusive and less universal than other systems. For example, in the UK most people benefit from free education, but don’t tend to consider this as part of the welfare system, while fewer people rely on benefits. Moreover, some benefits, say pensions, are universal and people receiving pensions don’t think of themselves as being ‘on benefits.’
So, although the best definition of welfare reform might be as an improvement in welfare systems it seems that the actual definition in practice is very different. Welfare reform in practice involves reducing income security for targeted groups, who are treated as in some way different or less important than the ‘ordinary citizen’ who is encouraged to see their own welfare entitlements as being of a very different kind.
The idea of welfare reform is not only confusing, but so are the actual means used to make the cuts and other changes. Overall I think it is possible to identify 7 different kinds of welfare reform, although in practice some or all of these policies may be mixed together in different ways in different policies:
- Direct cuts in income
- Increased means-testing by income
- Increased means-testing by other factors
- Reduced rate of growth in benefits
- Reduced eligibility
- Increased disadvantage
- Increased control for the sake of control
Here are some examples from recent changes in the UK of how welfare reform operates in practice and how it uses these different policies.
A recent example of a direct cut in income is contained in the Welfare Reform and Work Act 2016 which cuts income for new ESA (Employment and Support Allowance) claimants in the work-related activity group from £103 to £73 per week. This is a major cut in income, however it has been introduced for new claimants, which means existing claimants do not experience the cut and new claimants won’t realise they’ve been ‘cut.’ This is a typical strategy for introducing cuts which aims to reduce likely resistance.
Sometimes cuts are made by increasing the level of means-testing, or in other words, by demanding that people are poor enough to be eligible. For instance the Welfare Reform Act 2012 introduced a year’s time limit for contributory ESA (a non-means-tested benefit) after which people would have to be means-tested for ESA. Note that means-testing has been introduced at both ends of the scale, for instance, people on higher incomes can no longer receive Child Benefit.
Often the word means-testing is used only to refer to reducing a benefit as income increased, however there are other factors which can be taken into account in order to reduce eligibility, for example, savings, housing or your family situation. For instance, an important cut, which targeted disabled people, was the introduction of the bedroom tax. This was another element of the Welfare Reform Act 2012, which reduced people’s Housing Benefit if the system decided they had a spare bedroom.
Since 2010 many benefit cuts have been introduced by means of reducing the rate of growth in benefits, by changing indexation or by freezing any increase for a fixed number of years. This seems like a highly technical change, but it actually is the most important change in terms of the overall level of spending. If benefits do not grow with the economy or with average wages then relative poverty will increase and people will feel poorer. Also, if basic living costs increase above the average rate, then people will also be absolutely poorer. This has happened in the UK as housing and heating costs have risen above the general rate of inflation.
The fifth important change is in the eligibility of any benefit. Since 2010 there have been very many changes which ensure that people will no longer be classed as eligible for a particular benefit. Some changes are obvious, more are quite subtle and complex. An obvious change was the closing down of the Independent Living Fund in England, which ended the ability of disabled people to get funds to support their ability to live independently from central government. Changes to ESA and to PIP (Personal Independence Payment) have been connected closely to the use of new assessment regimes, which involve new tests for how disabled someone is and the privatisation of those tests to private agencies who may have less reason to be more humane in their handling of such assessments.
Another important strategy for reducing benefits is to reduce demand, that is to to discourage people applying for benefits that they are entitled to. There are a number of ways in which current approaches to welfare reform seem to rely on this strategy. The negative stigma associated with benefits is already significant, however politicians and government departments have encouraged further stigma and this may be encouraging people to avoid the system altogether. Furthermore, the increased use of sanctions and so-called ‘conditionality’ programmes, like the Work Programme, which demand regular attendance at benefit offices or training centres, can also serve to make the indirect cost of benefits seem too great.
Finally, some kinds of welfare reform seem to be designed simply to exercise control over people who need benefits. For instance the Work Programme, which is supposedly designed to help people get work, has had a poor record helping disabled people into work, and ia itself very expensive. It may be that it’s true purpose is to exercise control over people and to ensure that they have reduced freedom. Similarly the new system of Universal Credit seems an expensive solution for providing income security, but it requires very close monitoring of the weekly activities of people on low incomes. It may be that this kind of social control of people on low incomes is also one of the objectives of welfare reform.
The paradoxical point we’ve reached in the evolution of the welfare state is that those who are bent on destroying the welfare state claim that they want to save it. Their use of the term ‘welfare reform’ has been combined with a range of strategies that have been highly effective:
- Seize the centre ground – They claim that they are reforming the welfare state and this claim, while hard to justify, goes largely unchallenged.
- Narrow the definition of welfare – They encourage people to think of welfare as something that applies to ‘other people’ not to themselves
- Pander to our worst instincts – We’ve accepted lies about benefit fraud and the laziness of people in poverty which are used to fuel prejudice and injustice.
- Confuse people with technical mumbo-jumbo – New policies are dressed up in a complex web of meaningless or deceitful acronyms which disguise the true impact of any change.
- Act with haste on many different fronts – So much has been done so quickly that people don’t know what to look at next and as they try to fight the next injustice they must accept the last one as a battle lost.
- Scorn all criticism – Anyone, whether they be a vicar, a disabled person, an academic or the leader of the Labour Party, who dares to suggest that any of this is wrong is treated as a fool.
The UK is currently in the midst of another General Election, called because Theresa May wants to cash in her ‘Brexit means Brexit’ winnings. Unlike the 2015 General Election it is some comfort to see that the Labour Party is now clearly opposed to austerity and to this kind of wicked ‘welfare reform.’
The political odds stacked against the Labour Party are horrendous; but I do not see how we can begin to hope for something better unless we’re prepared to be honest about what’s wrong.
Welfare reform has been a wicked failure and we need to somehow find the right language and alternative policies which can reveal, challenge and reverse its impacts.