Why attitudes to poverty matter

Short blog on an event held at the Scottish Government on Monday 16th October 2017.

By Alan Mackie, University of Edinburgh (with Hayley Bennett, Kayleigh Garthwaite, Ruth Patrick, Abigail Scott Paul, Poverty Alliance).

It’s the fifth annual Challenge Poverty Week and the biggest yet, with around 150 events going on across Scotland as well as online and through various social media. On Monday (16th October) we hosted and took part in an event in conjunction with the Poverty Alliance, the Social Policy Association and What Works Scotland that aimed to bring together academics, policy makers, practitioners and a range of others interested in understanding and challenging poverty.

The main theme from the day was undoubtedly that more needs to be done to challenge some of the myths and dogma that continue to shape the discourse around poverty in the UK. These include, for example;

  • …*real* poverty does not exist in the UK
  • …poverty is the fault of the individual
  • …those in poverty just need to work a bit harder
  • …nothing can be done about poverty, it will always exist, and;
  • …if only social security was tightened those in poverty would ‘try harder’

For anyone working in the area of poverty you probably don’t need to be told about these, or how frustrated you are that these continue to hold sway over popular understandings of the issue here in the UK.

If there was one take-home message from the event it was that the reach of stigma plays an extremely important part in how poverty is framed, but that it also has a deeply pernicious impact upon those struggling in poverty. Hazel Ratcliffe, an activist with the Poverty Alliance, gave a frank and honest talk on her own experiences of poverty – and talked about how the negative stereotyping of single mums contributed to her feeling judged and as a result her well-being suffered as she became isolated. Hiding her poverty and feeling ashamed this only worsened her situation.

This theme ran through all the presentations, from Carla McCormack of the Poverty Alliance and academic research from Ruth Patrick (Dole Animators), Kayleigh Garthwaite (Foodbank Use) and Alan Mackie (Young People) as all highlighted the importance of wider public attitudes on the issue of poverty stigmatisation on people’s sense of worth. Not only is this affecting people’s health (mental and physical) but is also impacting on their ability to participate in the norms of social life, things that we all take for granted, perhaps. Things such as a lack of affordable and flexible childcare, a lack of decent jobs, travel expenses, a lack of flexibility in work patterns and mental health issues amongst many other things are forgotten in the rush to blame individuals for their own predicament. That is why campaigns such as the Poverty Alliance’s Stick Yer Labels are so invaluable – to tackle the myths around ‘scroungers’ and ‘skivers’ that are so damaging to those already struggling.

So what can be done? Abigail Scott Paul from the Joseph Rowntree Foundation (JRF) gave a presentation on creating a strategic communication alongside the Frameworks Institute, to try and interrupt popular misconceptions of poverty. But to do this we need to create a different way of framing the issue, one that will take us in new directions as strategies up until now have obviously not been sufficient. As many others noted, it seems that providing facts and figures are not enough on their own. The JRF hope to publish some tools next year – so we look forward to the outcome of this work (as well as their conference in Scotland in January, details TBA here). And Hayley Bennett from the University of Edinburgh and What Works Scotland discussed some of her research looking at how services are delivered to those in poverty. The key message from Hayley’s presentation was that it is crucial more is done to encourage services to talk to one another in order that they can be more responsive to people accessing their service. This was something that Ruth and Kayleigh built upon – that more is required to ‘shame proof’ social security delivery and to change cultures in employment support provision.

Much more can be done to tackle the blight that is poverty. We can do it, if the will is there. And we all have a part to play in this – because poverty affects us all. As the Poverty Alliance states ‘we need the right policies and sufficient resources to properly address the problem of poverty, we also need to challenge the many popular myths and stereotypes about poverty’. There is much to be done – perhaps getting involved with Challenge Poverty Week is a starting place?

Many thanks to the Social Policy Association for funding the event. 

SPAWWSpoverty alliance

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Making taxes fairer can help to reduce and prevent poverty

By Adrian Sinfield, Emeritus Professor of Social Policy, University of Edinburgh

‘What thoughtful rich people call the problem of poverty, thoughtful poor people call, with equal justice, the problem of riches’ (Tawney, 1913).  Tackling inequality is an important part of tackling and preventing poverty.  Now even the IMF recognises the importance of tackling inequality, rejecting two basic excuses for not doing so that it has clung to for years.  Progressive taxes can help to reduce inequality and reducing inequalities does not inhibit growth (eg Guardian, 11 Oct 2017).

‘Inequalities of income and wealth are far too wide’ is acknowledged by the Scottish government in its consultation on its proposal to implement the socio-economic duty (see also McCrone, 2017). This is an important and welcome development, building on its Child Poverty Bill as well as Realising Our Potential and the Fairer Scotland Action Plan. The value of prevention is recognised: ‘we must prioritise expenditure on public services which prevent negative outcomes from arising’ (Scottish Government, 2017, pp 2 and 7, emphasis in original).

As part of this the Scottish government must ensure that taxing of all kinds does not operate in ways that reinforce existing inequalities. This requires collecting revenue to finance public services in a way that helps to reduce existing inequalities, not maintain them. But Revenue Scotland was not listed as a body to be responsible to the socio-economic duty in the consultation, nor was Audit Scotland, well-placed to monitor fiscal activities. This must change.

The assumption that taxes automatically reduce inequalities is pervasive but misleading. In practice the total UK tax system is not progressive: it has long been basically proportionate,. There is even a slightly higher incidence of total taxes on those with the least money. In 2015-16 the bottom fifth of households paid 35% of their gross income in all taxes, against an average of 33.4% and 34.1% for the top fifth (Tonkin, 2017, table 22 in the accompanying dataset; special Scottish analysis for the previous year, ONS, 2016).  Current changes to Scottish income and local taxes will not have altered the picture significantly.

  • So those with the least contribute proportionately slightly more to measures to reduce socio-economic disadvantage and to all other government spending. One major reason is the upside-down nature of the great majority of tax and national insurance reliefs and subsidies: they convey greater benefit to those better-off than to those with less, often much greater advantage. People paying higher rates of tax benefit more from these reliefs: a £1,000 relief saves someone paying 40% income tax £400 against the £200 received by those on the standard rate. The better-off also have more income to take advantage of any reliefs.
  • To give just one example the total net subsidy in income tax and national insurance reliefs to private pensions in the UK in 2015-2016 was £40.5 billion (HMRC, 2016). These estimates cost more than six times Pension Credit, the means-tested benefit for those over working age on low incomes, and is equivalent to 45% of the total spending on contributory State Pensions (DWP, 2016, table 1a). Despite recent reductions to the ceiling for income tax reliefs, some three-fifths of the tax reliefs on pension contributions continue to go to those paying above the standard rate of tax, or who would be without this relief (latest data, Hansard, 2014). This works to maintain poverty, not reduce, let alone prevent it.
  • At present, the Scottish government itself cannot change income tax reliefs or NI contribution exemptions, but this may not always be so. Meanwhile priority must be given to ensuring that the local taxes, Land and Buildings Transaction Tax and other taxes it controls operate with a properly progressive impact.
  • At UK level the tax systems must be made fairer (Byrne and Ruane, 2017). The National Audit Office and various select committees call attention to the inadequate management of tax reliefs (NAO, 2014 and 2016; PAC 2015 and 2016). It is not just the IMF that now provides support. OECD and the EC are both advocating greater transparency on tax reliefs and related subsidies (EC, 2014). OECD has openly argued for ‘removing or reducing’ those ‘that disproportionately benefit higher income groups’ to promote inclusive growth (OECD, 2016, p 51). We must take advantage of this growing support for a more vigorous attack on inequality and prevent poverty.

 

References

Byrne, D. and Ruane, S. (2017) Paying for the Welfare State in the 21st Century: tax and spending in post-industrial societies, Bristol: Policy Press.

DWP (2016) Benefit expenditure and caseload tables 2016, April

https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2016

EC (2014) Tax expenditures in direct taxation in EU Member States, Brussels: European Commission, Occasional Papers 207.

Hansard (2014) Written Answer to PQ from Steve Doughty, 10 December.

HMRC (2016) Estimated costs of tax reliefs, KAI Data Policy and Co-ordination, HMRC, December 31.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/579690/Dec16_Reliefs_bulletin_Final.pdf

McCrone, D (2017) New Sociology of Scotland, London: Sage.

NAO (2014) The effective management of tax reliefs, HC 785, SESSION 2014-15, 7 November 2014.

NAO (2016) Report by the Comptroller and Auditor General, in HMRC, Annual Report and Accounts 2015-2016, London: HMRC, pp R1-90.

OECD (2016) Tax Design for Inclusive Economic Growth, OECD Taxation Working Papers 26, Paris: OECD.

ONS (2016) Taxes as a percentage of gross income, disposable income and expenditure for all households by quintile groups, 2014/15 Scotland, User requested data, 21 July

PAC – Public Accounts Committee (2015), HMRC’s performance in 2014-15, HC 393, Sept.

PAC (2016), HMRC’s performance in 2015-16, HC 712, December.

Scottish Government (2017) The Socio-Economic Duty: a consultation, July.

Tawney, R. H. (1913) ‘Poverty as an industrial problem’, reproduced in Memoranda on the Problem of Poverty, London, William Morris Press.

Tonkin, Richard (2017) The effects of taxes and benefits on household income: Financial year ending 2016, London: Office for National Statistics, April.

Aye We Can Tackle Poverty … With Business on Board

Prof John H. McKendrick, Scottish Poverty and Inequality Research Unit, Glasgow Caledonian University

Scotland’s poverty is changing.  At the turn of the century, not so long ago, two thirds of people experiencing poverty in Scotland lived in a household with no adults in paid employment. Today, 610,000 people living in poverty in Scotland are in a household in which at least one adult is in waged employment – around two-thirds of all children and adults of working age are from a household that is experiencing in-work poverty. In a world of zero-hours contracts, under-employment, pay freezes and where is it legal to remunerate workers below the level of a living wage, it is no longer credible to claim that work is the solution to tackling poverty.

But is it a responsibility of business?

For the last four years, I have been surveying business degree students at the start of their undergraduate studies at Glasgow Caledonian University. The survey canvasses their opinion on matters relevant to The Business of Social Science, a core module that aims to lay the foundation for a broadly-based business education that is consistent with GCU’s wider mission as the “university for the common good”. Almost 2000 students have shared their thoughts on poverty in Scotland – specifically to grasp their understanding of the reasons for child poverty, responsibility for tackling it, and the importance of tackling it.

What then do the future business leaders in Scotland think about poverty?

An overwhelming majority of business degree students think that it is “very important” to tackle child poverty (90.5%), with all but a very small minority of the remainder considering that it is “quite important” to tackle it (8.8%).   These are views that are shared by the wider Scottish population: when last asked in 2014, 93.3% of people in Scotland thought that tackling child poverty was “very important” and 6% thought that it was “quite important”. So far, so good.

What is perhaps more interesting is business students understanding of the role of work as a cause of poverty.  As Figure 1 shows, although a lack of work is widely held to be a reason for child poverty – for example, one in ten thought that “parents not wanting to work” was the main reason for child poverty (9.4%), with almost two thirds considering it to be one of the contributory factors (64.2%) – there is also some understanding of what might reasonably be viewed as failings in the labour market (with two thirds acknowledging that “work not paying enough” might be one of the reasons for child poverty).  On the other hand, that only a minority of business students think that “parents not working enough hours” is a contributory cause of child poverty might suggest that there is a need for the students to rethink the realities of the contemporary labour market for its most vulnerable participants.

 JM graph

Although government (UK, Scottish and local) and to a lesser extent “voluntary organisations and community groups” are most likely to be considered by business students as having a responsibility for tackling child poverty (84.1%, 89.3%, 78.2% and 58.9, respectively), a substantial minority also recognise a role in tackling poverty for “local businesses and employers” (averaging 45.9% for the last four years, having started out at 40.1% of students in 2014/15).   There are dangers in placing too much store on a single year of data, but perhaps it is significant that this academic year in 2017/18, an ever-so-slight majority of business students recognise a role for “local business and employers” in tackling child poverty in Scotland (51.8%). Grounds for optimism, perhaps?

Tackling poverty – in all its guises – is a collective effort.  Work is not working for too many people in Scotland.  Without doubt, government and the Third Sector have a key role to play in ameliorating, preventing and eradicating poverty in Scotland.  As does business, whatever the scale and focus of the enterprise.  It is incumbent upon those developing the next generation of business leaders in Scotland to raise awareness of the wider responsibilities of business if we are to create a Scotland without poverty in the not-too-distant future.

Basic Income for All – Right Out of Poverty

By Dr Benjamin Simmons, Trustee of Citizen’s Basic Income Network Scotland and Professor Mike Danson, Heriot Watt University

Citizen’s Basic Income Network Scotland (CBINS) is a new organisation set up to raise awareness of the benefits that a Basic Income would bring to Scotland. CBINS’ mission is “to advance research and public education about the economic and social effects of Citizen’s Basic Income systems – schemes which guarantee an unconditional, non-withdrawable income payable to every citizen as a right of citizenship.”

With plans for pilots in Fife, Glasgow, North Ayrshire and Edinburgh being developed, and with Scottish Government support announced recently, this is an excellent time to be better informed and critically aware of what is being proposed, the benefits, the potential impacts and how it can be made affordable.

A Basic Income (or Citizen’s Income) would represent a major step forward for equality, fairness, and a human right to be free from poverty. It would replace a lot of the current benefits and personal tax allowances system with an unconditional, non-withdrawable payment to each Scottish ‘citizen’ (however that is defined, but including children and adults of all ages). In other words, you and everyone you know who lives in Scotland would receive the same minimum payment from the government each month regardless of your circumstances. This would replace much of the current benefits system, which is expensive to administer, overcomplicated, and unfair.

There are already elements of a basic income system in place in the form of personal tax allowances, child benefit, and pensions. We can build on this platform to extend the financial security they try to provide to every citizen.

We have created a short Briefing Paper which you can read and download from here: https://cbin.scot/what-is-a-basic-income/briefing-paper/.

A basic income is a fixed amount of money paid to citizens which never decreases or disappears no matter the circumstances of that citizen. For example, unemployed, low wage, and rich people of the same age-bracket (i.e. not a child or a pensioner) would all receive the same basic level of state support. Children, adults, and pensioners would be provided with different levels of basic income. The objective of a basic income is to alleviate poverty caused by low wages and the benefits trap.

Today’s social security system is a product of incremental changes to a system designed for an age in which an unskilled male breadwinner could earn enough to support a wife and one child and unskilled work was widely available. It is designed to weed out the ‘undeserving’ and make sure that no-one receives more than they need, even if this comes at the cost of some people not getting enough. The means-testing process results in those with the lowest earnings having a higher effective tax rate than the wealthiest in our society. It is extremely expensive to administer, and consumes funds that should instead be distributed to the people the system is intended to help. If we were to design a system from scratch today it would look vastly different to the system currently in place; it is time for radical reform of the way our society supports its citizens.

A basic income (also called a Citizen’s Income, or Universal Basic Income) represents just such a reform. It is an unconditional, non-withdrawable, non-selective payment to every individual citizen. In other words, we all would receive the same amount of state support into our personal bank accounts regardless of whether we were in paid work. The only difference in entitlement between citizens might be based on age, such as pensioners receiving greater support due to our acceptance that they should not have to augment their income with paid work. There are many reasons why this would be a positive development for society, which we invite you to explore https://cbin.scot/. We believe this is a realistic and feasible approach to addressing poverty in Scotland.

There are many different proposals for how much a Basic Income should be, and many different proposals about how such a system could be phased in. We recognise these questions will be the first thing that people ask when they learn about basic income, and we welcome the discussion. There are links to various proposals on the website, however we think that at this early stage it is more productive to seek a broad consensus that a basic income is desirable and feasible, and build support for the principle of basic income with the same common purpose: to see a basic income introduced here in Scotland.

Ending Poverty? Aye We Can

By Professor Stephen Sinclair, Scottish Poverty & Inequality Research Unit, Glasgow Caledonian University

Scotland has committed to two, remarkable and ambitious objectives in relation to poverty. The first is the commitment (abandoned by the UK government) to eradicate child poverty in Scotland by 2030. The second is signing up to the Sustainable Development Goals, which pledge 194 signatory countries to, among other things ‘End poverty in all its forms everywhere’. The truly striking and inspirational aspect of these commitments is that, for the first time in human history, both are realistically achievable.

 

Although some moral philosophers argue that you cannot infer what ought to happen from what is the case, most people would agree that if we have the capacity and opportunity to save lives then we have the duty to do so. That opportunity now exists in relation to poverty. We live in a ‘post-Malthusian’ world where there are sufficient, if not abundant, resources to wipe extreme poverty from the face of the earth. The levels of global economic development and productivity are such that the poverty which persists is optional rather than ineluctable. The Biblical injunction that ‘The poor you always have with you,’ is no longer binding. Because we can eradicate poverty we must.

 

Both a growing body of evidence and recent experience testify to the achievability of these goals. At a global level, the rate of poverty has halved since 2000. Despite the recent deep and prolonged economic crisis, the 21st century has seen the fastest reduction in extreme poverty in human history. This is part of a much longer trend in a considerable reduction in the proportion of people across the world experiencing poverty. Important though this success is, it is important not to get carried away – the definition of ‘extreme poverty’ in such estimates is meagre: measured as living on less than $1.25 a day. Nevertheless, for the first time ever it is possible to foresee the eradication of extreme poverty.

 

There have also been striking reductions in poverty among older people and households with children in the UK and Scotland over the past 15 or so years. Sadly, this progress has been halted or even reversed in more recent years. But the determinant factors during both the periods of improvement and decline were political choices not irresistible economic forces.

 

A lesson which can be drawn from both the Scottish experience and evidence from the rest of the world is that poverty persists because it is allowed to. Where there is sufficient political will, poverty can be significantly reduced or ended entirely. However to achieve this requires both vision and practical measures. It is important not to underestimate the importance of what a former US President once disparaged as ‘the vision thing’. Both hope and despair can be infectious. To overcome the inertia of resignation or scepticism, people must be convinced that policy aims are not only desirable but also achievable. Therefore the case must be made that eradicating poverty at home and abroad is not utopian but a realistic prospect. That is why affirming that ‘aye, we can end poverty really does matter. This requires publicising successes, such as the positive impacts achieved by Sure Start and Educational Maintenance Allowances. Highlighting such accomplishments can build a consensus and foundation for further action. Failing to do so can lead to a political backlash and cynicism that efforts were wasted by heedlessly ‘throwing money’ at social problems.

 

An important part of making the case to end poverty involves challenging what has until recently been the dominant story about how economic and social progress have been achieved. Successful and sustained economic development has not been based on laissez faire economics and free trade. Government intervention to regulate markets and social investment were indispensable factors in the waves of economic growth that originated in Europe in the eighteenth and nineteenth centuries and which transformed living standards in Asia in the post-WWII era. More recent examples of significant economic development and reductions in poverty and inequality (e.g. in Brazil, Bolivia, Malaysia and Mauritius) were achieved by investment in infrastructure (including housing), increasing educational opportunities improving health care, and extending social protection.

 

With the demise of the ‘Washington Consensus’ and evident limitations of market fundamentalism, it is increasingly clear that the measures required to end extreme poverty and extend prosperity are the same in both more and less developed countries. These include full employment, increased productivity, higher quality jobs, and social security provision that protects households against structural economic inefficiencies, disadvantage and discrimination.

 

The Scottish Government has committed to end child poverty at home and contribute to eradicating it across the world. The duty of campaigners is to ensure that they keep their promise, and of analysts to advise them how to make this inspiring vision a reality.

 

Tackling poverty by extending professional collaborations

By Dr Hayley Bennett, University of Edinburgh, and What Works Scotland

The UK has a history of creating public policies that seek to challenge poverty or inequality, through various mechanisms such as welfare state services including early years support, social security and support during old age. Furthermore, a complex mix of public and third sector organisations (including Scottish government and all local governments) develop local strategies or initiatives to address economic disadvantage and reduce inequality. Yet, poverty persists and some programmes and services have had limited effect. Alongside larger ideas about the nature of public policy ideas (see Mike Danson’s blog post, “Aye we can” on this site from earlier today), new policy ideas may still end up facing organisational and institutional barriers during design and implementation, but can we change this? I argue, ‘aye we can’- providing we improve the way we operationalise and understand public service reform.

 

Over the past 12 years I’ve been researching the design and delivery of employment, poverty, and regeneration programmes in various organisations. It’s clear that there is a noticeable difference between policy aims and the processes and practices involved in implementation. Too often these functions are distant from each other, with little critical thinking about how policies and programmes alter and reform as they make their way through professional and organisational frameworks. Dominant trends in public management (for example contracting out, performance indicators, and annual funding cycles) can reshape or create new boundaries that impact front-line working and subsequently affect overarching policy aims. Different professions draw on their own favoured practices and ways of working, and management ideas shape and reframe the ways that many are able to do their work. In short, organisations are complex beasts with a number of competing logics.

 

Ideas of joined up working and partnerships are key to public service reform in Scotland (see Christie Commission), with an increasing emphasis on collaboration across organisational boundaries. Yet, different organisations have their own cultures, priorities, and dominant professional principles and you’ll hear workers engaged in reducing poverty talk about how they continue to see the same faces and work with similar people in other organisations. In the same conversations it is evident that there are many influential professions that impact on anti-poverty work. There are ‘support’ professions or organisational roles (such as HR, IT, procurement, accounts etc.) that frame and shape the work of front-line workers and anti-poverty policies. For example:

  • Under further inspection, it was apparent that estate management and accountancy workers led the decision-making regarding Jobcentre Plus closures as part of an estates rationalisation and contract management strategy for leased premises. Social security policy makers or experts, did not make these decisions as part of a long term vision to create and shape the future of employment support.
  • Project managers and performance colleagues champion key performance indicator models but may benefit from a richer understanding of the complexity of social issues and various types of social research data.
  • Accountants who establish short term funding processes can limit preventative interventions or activities that seek to work with harder to reach groups as evaluations may not demonstrate the achievement of key indicators within a short time period.
  • Procurement and contract management specialists often design contracted service provision in various policy areas, drawing on favoured professional models despite concerns of the risks involved by social policy specialists (e.g. employment support programmes).
  • There is also an increasing emphasis on digital and technological solutions in public service reform, and as such, an increasing number of IT specialists and ‘systems designers’ involved in policy making and implementation. Bad service design can exacerbate the experience of poverty, for example on-going issues with the delivery of universal credit drastically undermines expectations that social security policies can support people on low incomes.

In sum, policy design and delivery matters, but the professions who design and control the dominant thinking on delivery norms are often too distant from poverty or experience experts, research and evidence, front-line workers, or citizens. We need to start to widen the scope of professions and individuals engaged in anti-poverty dialogues, share research and knowledge, and extend conversations into their working spaces.  Leaders and managers need to challenge and critically reflect on the impact of organisational tools and dominant ideas from performance management. Can we improve anti-poverty activities with the levers we currently have in Scotland? By improving collaborative working across professions and organisations, I think “aye we can.”

Aye we can!

By Professor Mike Danson, Heriot Watt University.

We can’t afford to keep all these scroungers, layabouts, pensioners, … disabled and the rest in the manner to which they’ve been accustomed. Or can we?

Well it’s interesting that the levels of social security payments to those who are unemployed in the UK are appreciably lower than anywhere else in the north and west of Europe, compared with the average wage and what people were earning before losing their jobs. State pensions are similarly higher elsewhere in the Nordic countries, Germany, the Netherlands and our other near neighbours. We spend less on our welfare state that any of these competitors. Most of these countries are in the European Union, all are in the Single Market(s) with all its extra costs, apparently, and issues over migrant workers, restrictions on being competitive in a globalised economy.

These profligate neighbours also demand high taxes from their populations and businesses, and yet consistently are ranked by the CEOs of multinational enterprises as the best economies to locate their plants in the world. And, they haven’t been building up record deficits and debts, public and private; Britain has. Indeed, these small and large economies recovered quickly from the financial crisis, without attacking the living standards of the vulnerable and without undermining the sustainability of their businesses or societies.

How? Deregulation of markets, relaxing labour protection ad employment laws, privatisation of key sectors, selling off the family silver – nope, none of these. Nor destroying the power of trades unions, making workers take zero hours contracts, promoting flexible labour markets. So how? How come a low wage-low productivity-low investment economy of the UK is less competitive than the high wage-high productivity-high investment models of the Arc of Prosperity?

By building upon the social solidarity established over the decades – achieved after class struggle in times past, by accepting that workers on the shop floor – store, factory, office or construction yard – have talents, experience, skills and will apply these innovatively if they have a stake in their and their community’s futures, by having the highest rates of trade union membership in the world, the Nordic countries and Germany outperform the UK on all counts. Sweden, Finland, Denmark and Germany: the four innovation leaders of the European Union; the Nordic countries topping just about all global league tables for health, wealth and happiness; in the vanguard for gender equality, press freedom, equality.

These measures of a liberal and social democratic society are not possible because these countries are rich and powerful, rather they are fundamental to their individual successes. Each Nordic social model – of Iceland, Norway, Denmark, Sweden and Finland – is based on degrees of inclusion and equity that are alien to the body politic presented by Westminster and the establishment bubble of the capital. Speaking to colleagues in those countries or addressing workshops in Iceland and the Faroe Islands recently, I was struck at how deep these norms and values go into their respective consciousnesses. Levels of poverty tolerated by the UK government, commentariat and media are incomprehensible there, and so the consensus and settled paradigm is that poverty is exceptional, the common weal is critical in determining the private and the social good.

Overwhelmingly land and other commons are held in community ownership, minimum wages are eschewed because collective bargaining is accepted as key to setting fair wages for all. The tax system is progressive overall but, more importantly, predistribution is stressed: wages are set well above poverty levels so that tax revenues are naturally high as incomes allow all to contribute. The social wage – incomes from all sources plus the benefits from public service provision – is affordable because the advantages of living in, contributing to and being a member of your society are recognised and the population are willing to pay the taxes required to deliver the benefits. Contrast this with the approach of the UK: first we bake the cake bigger then, after some have had their fill, most have been fed pie in the sky, a few crumbs may fall to those who are vulnerable, left behind, unable to compete.

There is a better way. Can we move along a different road, one that delivers equity, prosperity and freedom from want, homelessness and destitution? Can we adopt an inclusive society that privileges sustainability, solidarity and security over greed, exploitation, isolation and instability? Can we be more Nordic? Aye, we can.

The time is now: Recognising and responding to racial discrimination in the world of work

crer logo

By Rebecca Marek, Parliamentary and Policy Officer, Coalition for Racial Equality and Rights

 

 

Challenge Poverty Week 2017 asserts that poverty exists in Scotland and is solvable; acknowledging this is the first step to tackling poverty.

For BME groups in Scotland, it is certainly true that poverty exists. On the whole, BME groups are twice as likely as their white counterparts to live in poverty. [1] This is due to a range of factors, many of which vary from those experienced by white groups. The recognition of this variance is key to addressing poverty in BME communities.

One of the major causes of poverty in BME groups is a lack of employment. The employment rate in Scotland is considerably higher for white groups (72.0%) than for BME groups (55.2%) aged 25-49, despite school leavers from BME groups having significantly higher attainment than their white counterparts and going onto positive post-school destinations at higher rates.[2] Even when BME individuals find work, it is often low-paid and beneath their qualification levels.[3]

For BME young people struggling to transition to the labour market, there is a range of hurdles that must be overcome to achieve parity with their white peers. Children from a BME background are significantly more likely to grow up in disadvantaged circumstances than white children, with 36% of BME children living in a household with an annual income in the lowest quintiles compared to 22% of white children. [4]   BME children aged 0-15 are more likely to live in a flat or mobile/temporary accommodation than their white counterparts (45.2% vs 22.5%).[5] In school, BME children face racism and racial bullying from their peers, often in contexts where teachers are unable to adequately address and prevent racist behaviour.

Despite this, BME children and young people achieve considerably in school. Overall, 74.8% of BME pupils (including 76.8% of Asian pupils and 79.0% of African pupils) achieved one or more qualification at SCQF level 6 or better compared to 61.1% of white pupils. [6]  80% of BME school leavers go onto further and higher education, compared to 65% of leavers from other backgrounds.[7] In Scotland, degrees are held by 32% of BME people compared to 20% of white people,[8] and 47.6% of BME people hold a Level 4 qualification or higher compared to 25.3% of white people.[9]

And yet, this does not translate into advantages when entering the labour market. BME groups are less likely to be an employee (44.0% vs. 51.0%), especially a full-time employee (28.8% vs 36.7%). In contrast, BME individuals are more likely to be employed part-time (15.1% vs 14.3%), be self-employed (8.3% vs 6.9%), and be unemployed (8.0% vs 5.0%).[10]Overall, people form BME groups are clustered into lower-grade jobs and denied access to training opportunities that may help them progress into promoted posts.[11]

The key factor in these disparities is discrimination. A 2009 DWP study found that people with a ‘BME name’ had to submit 16 job applications to receive a positive response in contrast to 9 for those with a ‘white name’, even though they were submitting the same application.[12] A CRER study evidenced that for local authority jobs, even after the interview stage, white candidates were almost twice as likely to be appointed as BME candidates.[13]

The Scottish Parliament’s Equal Opportunities Committee asserted in its report “Removing Barriers: race, ethnicity, and employment” that, “We can only make progress if we refuse to accept defective aspects of current employment and recruitment practices and challenge segregation within employment. Without confronting existing practices, we cannot address any underlying racism and discrimination that the evidence confirms exists.”

For BME groups in Scotland, poverty has a clear cause – discrimination in entering the labour market and in employment. Initiatives aimed at increasing attainment and encouraging young people to enter further and higher education will miss BME young people, and the discrepancy between these groups will continue to grow.

To boost incomes for BME groups, measured and considered work must go into addressing discrimination – unwitting or otherwise – in public, private, and third sector bodies. Scotland must accept that measures for the majority do not serve as a proxy for measures for everyone. Poverty amongst BME groups is solvable, but the solution is different from the solutions for white communities.

Recent publications including the Removing Barriers: Race, ethnicity, and employment; Race in the Workplace: The MacGregor-Smith Review; and the Race Equality Framework for Scotland provide recommendations to address this issue.

After decades of research, reports, legislation, and equality policies, we know what the problems are and we know what the solutions are. Now we must act to bring about real change.

 

[1] The Scottish Government (2016). Equality characteristics of people in poverty in Scotland, 2014/2015.

[2] Scottish Parliament Information Centre. SPICe Briefing: Ethnicity and Employment.

[3] Joseph Rowntree Foundation (2016). Poverty and Ethnicity: Key messages for Scotland.

[4] Scottish Government (2013). Growing Up in Scotland: Birth Cohort 2 – Results from the first year.

[5] 2011 Scottish Census

[6] Data requested from the Scottish Government

[7] The Equal Opportunities Committee (2016). Removing Barriers: Race, ethnicity, and employment.

[8] The Scottish Government. Ethnicity and Employability, Skills and Lifelong Learning.

[9] 2011 Scottish Census

[10] 2011 Scottish Census

[11] The Equal Opportunities Committee (2016). Removing Barriers: Race, ethnicity, and employment.

[12] Department for Work and Pensions (2009). A test for racial discrimination in recruitment practices in British cities.

[13] CRER (2014). State of the Nation: Employment.

Young People and Social Justice

By Alan Mackie, Doctoral Researcher, University of Edinburgh

Over the past couple of years I have been conducting research into the lives of a group of young people (aged 16-24) as they navigate their way to adulthood in a community in Scotland. What I am particularly interested in is issues of social justice – and in order to analyse the young people’s lives I am using a framework of social justice conceived by Nancy Fraser, a feminist and socialist who argues that for any society to be called ‘just’ every person must have equal opportunity to participate in social life on a par with their fellow citizens – what she terms ‘participatory parity’.

But what makes up participatory parity? There are three elements to this:

  1. Redistributive issues: That we all have the resources to take part in the normal activities of life – this includes adequate income, access to decent work, education and healthcare for example.
  2. Recognitional issues: This element refers to our identities and the respect we receive from those around us as well as the institutions that circumvent our lives. That we do not suffer discrimination (along the lines of class, race, gender and disability amongst others)
  3. Representational Issues: That we are able to take part in society, have a voice in decision-making – particularly in the political issues that affect our lives.

What is interesting, I think, is when we think about and read of issues such as poverty and inequality we often focus on the redistributive element of social justice. But what is clearly apparent when we broaden our focus is that the three elements described above interact with one another and work to cement exclusion and injustice.

I’ll offer up two examples. The first is that the young people feel utterly forgotten about by our politicians. Unable to secure even the opportunity to access decent and stable employment, they feel that participation in politics is pointless. Other research has found similar – issues of poverty and exclusion from the labour market weakens ties to community, society and participation in decision-making as well as the ‘normal’ routines of life. A young mum in my study, for example, was so ashamed of her financial predicament that she would hide away from family and friends. Unable to purchase the most basic (and most essential) of goods, her embarrassment and shame meant she became increasingly isolated and as a result her mental health suffered.

Second – many of the young people are self-excluding from accessing social security. Some of the young people doing this are already in impoverished households and so doing this is only deepening their poverty. And they are often supported in this decision by parents, partners and others. But why are they doing this? Many have told me that they do not want to suffer the social stigma that goes with accessing ‘benefits’ and going to the job centre. To do so would be ‘scummy’ and make them a ‘scrounger’. It has been clear in my research that the denigrating discourse that has become commonplace in media and political rhetoric around social security is impacting on the young people – whether affecting their own identity or their views on others accessing social security. We can see the recognitional and redistributive spheres intersecting here as institutional rhetoric affects the young people’s sense of self and impacts on their access to even the most paltry of incomes.

But what can be done? Firstly, we need to have a serious think about the employment opportunities currently around for young people who leave school with poor qualifications. All the young people in my cohort are desperate to find opportunities that offer stability – and if not stability, then at least the opportunity to access meaningful qualifications or meaningful skills that could allow them to visualise a more positive future. At the moment, I argue this is not happening.

The second and most important thing is to realise that the youth ‘phase’ has changed so markedly, and become so disrupted and extended, that it is no longer appropriate to treat it in the same way as we have in the past. We like to think that young people don’t need the same resources as the rest of us. That they can get by on very little, but the truth is that young people need the same as everyone else. They need food, clothes, access to decent housing, access to meaningful work and the dignity and respect that any of us need. And they need this now, not at some imagined point in the future. Social justice is not just for ‘adults’ – it is for us all.

‘How do we translate lived experience into policy?

Dr Ruth Patrick, Postdoctoral Research Fellow, University of Liverpool

Dr Kayleigh Garthwaite, Birmingham Fellow, University of Birmingham

One thing we are not short of in efforts to challenge poverty in Scotland (or indeed across the UK) is evidence. There is a rich and detailed evidence base on the lived experiences of poverty and the entrenched stigma that is so often tied to efforts to get by below the poverty line. Academics, third sector organisations, and front-line workers have all shown the extent of the mismatch between policy narratives and political presentations of poverty and everyday realities on the ground. Time and again, research has illustrated the myth of ‘inactive’ welfare dependants who choose ‘welfare’ over ‘work’, and yet these dominant stereotypical (and stigmatisting) views retain their currency and undoubtable power. Research has also shown the extent to which a pervasive stigma of welfare can have very real and damaging consequences for those who it effects.

But although the lived experiences of poverty have been well-documented, there is more work to be done in better communicating lived experiences, and thinking through how this can then shape policy and debate going forward. This is very clearly shown when we think about foodbank use and multi-millionaire MP Jacob Rees-Mogg’s recent comments, who described foodbanks as “rather uplifting” and insisted they show “what a good compassionate country we are”. This shows a complete lack of appreciation for the many complex and distressing reasons why people are using foodbanks, such as the lengthy 6-week delay when transferring to Universal Credit, benefit sanctions, low-paid, insecure employment. There is also the stigma, shame and embarrassment that many people feel at having to walk through the foodbank doors. There is nothing “uplifting” in not being able to feed your children.

In our own research, we have emphasised how individuals often internalise the stigma attached to welfare receipt, sometimes even appropriating negative labels to self-describe as ‘scroungers’ or as a ‘bum’. Stigma can make efforts to find paid work harder still, and add to the burden that struggling to get by on benefits and in poverty involves. The stigma of claiming benefits or of using a foodbank can deter people from seeking the help they need. This can then have a knock-on effect on their health, particularly when thinking about mental health.

As researchers, we have a responsibility to think about how we can try and challenge the stigma of benefits receipt, and do more to ensure that policy debates more accurately reflect lived experiences on the ground. However, recently, we have started to wonder – whether – in focusing on only one group of ‘welfare’ claimants (those on out-of-work benefits), research such as ours has acted to reinforce ideas that ‘welfare’ is primarily received by only one segment of society. Of course, in fact – as the founder of social policy Richard Titmuss reminds us – we are all ‘welfare dependants’ – particularly if we take welfare to include occupational and fiscal forms of support as well as social welfare. Further, as well as challenging ideas of ‘undeserving’ welfare claimants, there is perhaps more that needs to be done to engage with the behaviours and practices of policymakers and elites, looking up rather than downstream as suggested recently by Stephen Crossley (https://plutopress.wordpress.com/2017/08/03/chips-and-cheese-and-a-massive-fucking-tv-stephen-crossley-on-representations-of-britains-impoverished/.

If we are to really challenge poverty, we need to make sure our research properly engages with the structures and processes that create and reproduce poverty. Understanding the lived experiences of people affected by poverty is critical but – on its own – it is not enough.

How working together to combat poverty works for us all

Mike Danson, Heriot-Watt University

Today, HM Revenue & Customs has named and shamed a number of large national chains and about a dozen smaller Scottish businesses in the personal services sector for failing to pay workers the national minimum wage. Many many more profitable companies are paying less than the Living Wage and are employing some of the very poorest on zero hour contracts, people who are desperate for wages to put food on the table, shoes on their children’s feet, to heat the house in winter, and pay their way through college and university. The workers are doing what they have been told to – work your way out of poverty. But working your way out of poverty isn’t working, trickle down economics doesn’t work, and it’s going to get worse as Working Tax Credits are withdrawn and other benefits cut.

Researching this using Treasury, DWP, EU and other official statistics and the excellent work by Profs Christina Beatty and Steve Fothergill recently highlighted some horrendous impacts on the poorest in society, a failure even to achieve the distorted objectives of the Westminster Government, but also an under-appreciation of the implications for local enterprises and entrepreneurs across Scotland. The cuts in social security benefits – announced even before this summer’s additional £12bn cuts per annum are considered – will remove £1.5bn from the pockets of Scotland’s poor and so directly reduce spending in local shops, services and businesses by that amount. Multiplier effects will exaggerate that loss to the country’s enterprises. The numbers on long term sick and disability benefits are showing no signs of falling, the downturn in numbers on unemployment benefits is lower and slower than any previous recovery from recession. Jobs being created are low paid, low productivity, low innovation and low profit. These austerity cuts will damage the economy but especially the poor (both working and inactive), small and medium enterprises, and put back recovery and regeneration. A different strategy is needed for Scotland.

Much of the attention this week has been quite correctly focused on how the poor are being so severely affected by the Government and Parliament in Westminster, and the other posts on this dedicated Challenge Poverty Week blog have discussed many aspects of the impacts of the cuts and changes in entitlements to support. There are wider economic costs which we should be aware of and these need embedded into any analysis of the system-wide implications of austerity because they demonstrate how the cuts hurt us all. Cutting the incomes of those on benefits directly reduces expenditure in their communities; when you are making everyday choices between eating, heating, clothing and the other necessities of life there is no question of being able to save.

Every pound ‘saved’ by the Treasury from the Social Security budget reduces the UK economy by the same amount initially, but then by more as this money is not circulating around the local economy. These effects are felt most acutely in the most deprived parts of the country – the old industrial areas, rural, seaside and traditional mining communities. Where these cuts represent redistribution from poor to rich through tax cuts and diverted spending through macroeconomic choices different areas benefit: specifically where higher rate tax payers live. But as the better off will save their extra incomes or disproportionately spend on imported goods, foreign holidays or certain retail and hospitality sectors, the overall combined impacts will be negative for the national economy. Money leaking out of poor neighbourhoods, through cuts, and out of the country through redistribution to the already well-off damages employment, incomes and power of small and medium enterprises as well as the country as a whole.

These redistributions by class, community and place are detrimental to families, but also to entrepreneurs who serve them close to home. So much for building an enterprising culture, while those individuals and groups who benefit from increasing inequality and personal wealth are featherbedded through divisive and inefficient policies. Promoting economic development of the Home Counties stokes further inflationary pressures, to the disadvantage of the whole and of the rest of the UK, exacerbating the harmful effects on the balance of trade. In brief, an economic strategy based on attacking the poor under a specious argument of balancing the budget will fail of itself, will fail local enterprises and will fail the economy in aggregate.

To address the increase in imports generated by these redistributions, the UK Government and Treasury are now embarked on a mission of attracting capital inflows, and so are running cap-in-hand to foreign governments and moneylenders to balance these other books. Encouraging  overseas, often state-owned, corporations to buy, operate and reap the rewards of supplying our utilities, railways, nuclear power stations, Trident missiles, health and education services – whilst denying our own public sector organisations the opportunity to compete for such contracts –  adds to the long term damage to the economy. The latest Nobel prizewinner (Angus Deaton) recognises the nonsense of this approach, as have former winners (most notably Paul Krugman, Joseph Stiglitz, and Amartya Sen) and economists from across this country and beyond. Poverty and inequality are bad for us all, for small businesses and for generations to come, and it is important that the spillovers from attacks on the poor are not seen just as having inhumane effects on our poorest neighbours.

Solidarity, coherence, innovation, strong trade unions and equality are the characteristics of the world’s leading economies – we find them across the North Sea where those societies lead the rankings on almost all indicators. Before the recession they devoted the highest proportions of their national incomes to social spending, paid the highest out-of-work benefits on any measure; since then they have protected the poor especially from the worst effects of the crises, and their recoveries have been quicker and stronger. Austerity is failing Britain, further cuts to the poorest are exacerbating levels of inequality not seen since the 1920s and not suffered currently elsewhere in Europe. Nordic societies have shown there is a better way, we should pursue it with vigour.

Mike Danson is Professor of Enterprise Policy, School of Management and Languages, Heriot-Watt University

Preventing poverty in the labour market

Adrian Sinfield, University of Edinburgh

Preventing poverty more effectively requires lower unemployment and decent jobs, fair wages and greater security.  This means a ‘career first’ rather than a ‘work first’ approach, with jobs worth having and benefits to the individual, their family and the wider society.

Reducing poverty nowadays is discussed as if it were all a matter of getting ‘them the poor’ to behave better. But preventing poverty requires closer attention to its political economy and so the ways in which the workings of society, polity and economy allow and encourage the creation of poverty.  Tackling prevention in addition to lifting people out of poverty leads to greater and closer scrutiny of the processes that fail to protect people.

A crucial part of this requires a fairer and better working labour market. The objectives were clearly set out by William Beveridge 71 years ago in Full Employment in a Free Society. Full employment ‘means having always more vacant jobs than unemployed, not slightly fewer jobs. It means that the jobs are at fair wages, of such a kind, and so located that the unemployed can reasonably be expected to take them; it means, by consequence, that the normal lag between losing one job and finding another will be very short’ (Beveridge, 1944, p 18).  The aim, he stressed, should always be a seller’s market, not a buyer’s market. ‘A person who cannot sell his labour is in effect told that he is of no use.’ This is ‘a personal catastrophe’ rather than ‘the annoyance or loss’ suffered by the employer who cannot fill a job.

I have quoted Beveridge at such length to bring home the contrast with today’s policy assumptions for the labour market. Throughout his career Beveridge recognised the ways in which the balance of the power in the labour market shifted with changes in unemployment. The higher the unemployment, the more the balance tilts in favour of the employer. This was brought out by classic studies in the past. ‘Hiring requirements tend to rise – the definition of an “acceptable” worker is tightened up’, as Lloyd Reynolds, a pioneer of labour market analysis, pointed out (Reynolds, 1951, p.73). In consequence, those with least bargaining power in the labour market, whether suffering particular disabilities, lacking skills and/or belonging to ethnic, religious and other minorities, become even more vulnerable to exclusion and deprivation.  The risk of low pay and poor working conditions is increased.

By contrast, with lower unemployment employers have to recruit more widely, invest more in training and recruitment, make more adjustments to promote flexible working that allows a ‘family-friendly’ and better ‘work-life’ balance for their employees.

Many basic social policies are more likely to be successful when unemployment is kept low. ‘Maintenance of a high general level of economic activity has priority over improved labor market organisation … because it is a structural prerequisite to the latter’ (Reynolds, 1951, p 75). This was also stressed by Beatrice Reubens when she carried out a detailed, comparative review of European programmes to help the ‘hard-to-employ’, personally visiting and analysing experience in country after country. Low unemployment was a prerequisite for successful rehabilitation and re-employment (Reubens, 1970).

I am aware of no research since that challenges the need to keep overall unemployment low to tackle poverty in the labour market and to better support those caught on its margins. Reducing unemployment is a central part of what needs to be done to reduce inequality and poverty (Atkinson, 2015, ch. 5).

But stigmatizing and mythmaking about ‘shirkers, not workers’ weaken public support for tackling the labour market, rather than the ‘out of work’. Policies of ‘what works’ in keeping voters on side include the opportunistic exploitation of long-term prejudices of ‘we the people’, the taxpayers and contributors, and them, the takers who ‘rest on their benefits’.  But the changing trends in long-term unemployment, David Webster demonstrates, are to be explained by the overall state of the labour market, not by the behaviour or characteristics of those suffering long periods out of work (eg, Webster, 2005).

Politicians and others who should know better – and very often do – continue to nourish the myths despite their careful refutation (Shildrick et al., 2012b). They do not mention that over the last half century basic benefit rates for people unemployed or sick have fallen by one-half compared to average earnings (by the DWP’s own analyses until they were cut as an economy, Sinfield, 2013).  Inadequate ‘welfare to work’ and tougher sanctions policies are feeding the growth of poor jobs that diminishes people’s lives, not helping to preventing them.

By contrast treating people with dignity in the labour market means ensuring that they are offered a job worth having – the ‘career first’ rather than ‘work first’ thinking set out by Ron McQuaid and Vanesa Fuertes (2014). Making bad jobs better is a major theme of the concluding chapter to the 2012 award-winning study by Tracy Shildrick, Rob MacDonald and others, Poverty and Insecurity. The study is ‘about the lives of individuals and families living in or near poverty – despite (or, as this book will show, because of) their enduring commitment to work and repeated engagement with jobs’ (Shildrick et al, 2012a, p. 1).  It reveals the problems of the labour market experienced by the many people caught in the no-pay low-pay cycle.

‘Poor work is the big story’ in a world of greater inequality, insecurity and Social Exclusion (Byrne, 1999, p 69; Lansley & Mack, 2015). Policies to support the Living Wage are valuable, but they have to be accompanied by decent child benefit. The Chancellor of the Exchequer’s ‘misappropriated’ usage of a ‘national living wage’ (Veit-Wilson, 2015; Scottish Government, 2015) provides a fine example of ‘words that succeed and policies that fail’, the subtitle Murray Edelman chose for his book on Political Language (1977) – especially when it is combined with reduced tax credits.

Instead we need a broad policy approach that encourages and supports making bad work better, creating decent, good quality jobs for all (Findlay et al., 2013). As Michael Marmot argues, this will bring benefits that reduce the health gap (Marmot, 2015, ch. 6). This should also include more attention to the practices of poor employers and to the ways that employers providing the poorer jobs are themselves often caught in contracting arrangements with supermarkets or other larger employers.

One enterprising initiative is the Scottish Fair Work Convention tasked with developing the ‘fair employment and workplace framework for Scotland … that articulates a practical blueprint for implementing fair work’. ‘People must feel valued, rewarded, engaged in their work and be allowed to feel they have a stake in the success of their workplace, their community and their country’  (Roseanna Cunningham, Cabinet Secretary for Fair Work, Skills and Training, ‘Scotland: A Fair Work Nation’, 17 April 2015). Now this ambition has to be translated into strong policies in an area that has in the past been much neglected. It could make a valuable contribution to reducing poverty and inequality in the labour market.

Adrian Sinfield is Emeritus Professor of Social Policy and University Fellow at University of Edinburgh.

References:

Atkinson, A. B. (2015) Inequality: What Can Be Done?, Boston: Harvard University Press.

Beveridge, W. H. (1944) Full Employment in a Free Society, London: Allen and Unwin.

Byrne, D. (1999) Social Exclusion, Buckingham: Open University Press.

Cunningham, R. (2015) ‘Scotland: A Fair Work Nation’, http://news.scotland.gov.uk/News/Scotland-a-fair-work-nation-1851.aspx

Edelman, M. (1977)  Political Language: Words that Succeed and Policies that Fail, New York: Academic Press.

Findlay, P., Kalleberg, A. L. & Warhurst, C. (2013) ‘The challenge of job quality’, Human Relations, vol 66:4, pp 441-451.­

Lansley, S. & Mack, J. (2015) Breadline Britain: The Rise of Mass Poverty, London: One World.

Marmot, M. (2015) The Health Gap: the challenge of an unequal world, London: Bloomsbury.

McQuaid. R. & Fuertes, V. (2014) ‘Sustainable integration of the long term unemployed: From Work First to Career First’ in Larsen C., Rand, S., Schmid, J. & JR. Keil (eds), Sustainable Economy and Sustainable Employment, Muenchen: Rainer Hampp Verlag, pp 359-373.

Reubens, B. (1970) The Hard-to-Employ: European Programs, New York: Columbia University Press.

Reynolds, L. (1951) The Structure of Labor Markets: Wages and Labor Mobility in Theory and Practice, Westport, Conn.: Greenwood.

Scottish Government (2015) UK wage plan ‘not a Living Wage’ http://news.scotland.gov.uk/News/UK-wage-plan-not-a-Living-Wage-1dd6.aspx

Shildrick, T., MacDonald, R. , Webster, C. & Garthwaite, K. (2012a), Poverty and Insecurity: Life in Low-Pay, No-Pay Britain. Bristol: Policy Press.

Shildrick, T., MacDonald, R., Furlong, A., Roden, J. & Crow, R. (2012b), Are ‘Cultures ofWorklessness’ Passed Down the Generations? York: Joseph Rowntree.

Sinfield, A. (2013) ‘What unemployment means three decades and two recessions later’, Social Policy Review 25, pp 205-223.

TUC Commission on Vulnerable Employment (2008) Hard Work Hidden Lives, London: TUC.

Veit-Wilson, J. (2015) Stealing a good name: the national living wage http://www.cost-ofliving.net/stealing-a-good-name/

Webster, D. (2005) ‘Long-Term Unemployment, the Invention of “Hysteresis” and the Misdiagnosis of Structural Unemployment in the UK’, Cambridge Journal of Economics, vol 29: 6, November, pp 975-95.

 

Poverty, inequality and ‘the common good’ …

James Henderson, University of Edinburgh

The Yunus Centre for Social Business and Health at Glasgow Caledonian University recently held the first John Pearce Memorial Lecture. John Pearce, who died in 2011, had committed across his working life to ‘collective and community enterprise’ in pursuit of ‘the common good’. He worked in the 1960s in community development abroad, in the 1970s as part of the ‘legendary’ (UK) National Community Development Projects (CDPs), and then, from the 1980s, in developing social business –now termed social enterprise – in Scotland.

Working also as a researcher and writer, John Pearce influenced many through two key publications: in 1993, At the Heart of the Community Economy; and in 2003, Social Enterprise in Anytown (1). I’m certainly one of those he influenced through these books and the powerful commitment to the common good he evokes. So, as part of Challenge Poverty Week, I’m keen to think further as to how such thinking has and continues to be concerned with ‘tackling’ poverty and inequality. Particularly, given the increasing policy focus on ‘community’ and third sector over these last five decades … co-incidentally in parallel to my own lifespan (thus far).

At its simplest, the Institute for Fiscal Studies’ (2) tracking of income inequality in UK through the Gini co-efficient marks the significant rise in such inequality during the 1980s from the historically low levels of the 1960s and 1970. This very broadly-speaking plateaus from the mid-1990s onwards, subject to on-going ups and downs, with current Conservative UK Government policy now predicted as a likely ‘up’ and increase in inequality. Academic discussions are on-going as to the detail of how poverty and inequality connect, see for instance last year’s Challenging Poverty blog. However, the broad tradition of thinking within community development, generated through the CDPs’ action research, has asserted a political economic analysis of poverty as generated by structural inequalities. John Pearce, for instance, argues against the ‘social pathologising’ of individual (working class) neighbourhoods, pointing instead to the economic and historical changes that have impacted on them.

Given this long-term policy focus, or rhetoric at least, on ‘community’ and the third sector, how should this be understood in relation to increasing inequality? Have the two unwittingly become part of the process of sustaining inequality? Would things have been still worse without them? Is the situation more complex than any such simple statements? As crucially, what should their future roles be in seeking social change?

As befitting the community development tradition, John Pearce provides a practical tool and model (3) for supporting practical and widespread discussion of the economic, social and political workings of society. He outlines three sectors or ‘systems’ of economic activity – each potentially working across neighbourhood, local, regional, national and global dimensions – that I’d summarise as follows:

  • Private – ‘the market’ and largely privately-owned organisations that trade within it – whilst recognising that publicly and socially-owned organisations will trade too;
  • Public – ‘the state’ including government, public sector and other official bodies – with emphasis on planning and service provision … also investment and distribution of income.
  • Third – of socially and community-owned organisations and networks: including social enterprises, cooperatives, voluntary organisations, trades unions and faith-based bodies etc.

A seemingly simple framework, perhaps, yet its mix of local-to-global, different forms of ownership and organising, and different and in themselves diverse ‘systems’ for coordinating economic and social activity, has the potential to support any group in generating increasingly complex discussions as to what a more equal society, concerned for social solidarity, would ‘look like’.

Pearce uses it to illustrate an intriguing cooperative, mutual vision of society and economy: one that emphasises the role of social ownership in ‘working for the common good’, and yet is not naïve as to the respective roles of the state and the market. Importantly, his model can also support wider political economic discussions of the contributions of state, market and ‘community’. It can explore insights, for instance, from thinking on a social democratic post-Keynesian welfare state; a ‘green’ egalitarian steady-state economy; and so on … and likewise how free market (neo-liberal) approaches have increased the scale of poverty and inequality since the 1970s.

His model also gives us the space to think further about the role of such a third system in working for equality and the redistribution of resources within society … rather than as simply and solely a means to deliver local services and build social capital. Pearce’s own insight here: the need for independent, socially-owned organisations and enterprises, controlled by working people – the common usage, rather than the current Chancellor’s – and their communities, with the capability and confidence to challenge current norms, explore alternative approaches, and work for ‘the common good’.

Dr James Henderson is a social researcher working at the University of Edinburgh – the views expressed above are his own.

 Notes:

(1) This blog draws from these two publications, and John Pearce’s chapter in The Social Economy: International Perspectives on Economic Solidarity (edited by Amin, 2009).

(2) View the Institute for Fiscal Studies’ report Living Standards, Poverty and Inequality in the UK: 2015 (Bellfield et al.; p.32) at: http://www.ifs.org.uk/uploads/publications/comms/R107.pdf.

(3) Pearce’s three systems model of the economy appears first in Social Enterprise in Anytown (2003). It is reproduced in similar vein in Mike Bull’s (2008: p.5) Balance: Unlocking Performance in Social Enterprise, view at: http://www.socialenterprisebalance.org/docs/Unlocking_performance.pdf.

Responding to refugee poverty: lessons from local and international research

Gina Netto, Heriot Watt University

Europe is now facing a scale of migration that many view as unprecedented. While it is difficult to estimate the exact numbers of people who are migrating to Europe, it is clear that there is an urgent need to consider responses to refugees, many of whom would have lost their homes, loved ones and possessions. This presents a challenge to individual member states of the European Union, many of which, including the UK, are already facing a severe housing shortage. Yet, even while governments engage in extensive negotiations over the numbers of people to accept, there is evidence of a willingness from some governments and many community organisations to welcome refugees and to consider how they can be assisted in building new lives.

Among the most urgent considerations is housing of refugees. Here, extensive research informs us that housing needs to be considered along with access to other key services including education, services which promote employability, health and social care services. These are needed in order to assist refugees in not only finding routes out of poverty but to thrive.

Housing allocation policies need to be sensitive to the demographics of existing communities. Areas with high levels of poverty, deprivation and unemployment – where the arrival of refugees might be viewed as presenting additional competition for available resources – should be avoided, if at all possible.

But alongside this, If it is difficult to find available housing in other areas, then extensive work needs to be undertaken with existing communities, including investing in new accommodation for the local population and community development in order to avoid racial hostility and tension. Local communities should be prepared for the arrival of refugees. Awareness of the reasons for forced migration should be raised. Local residents should also be assured that they would not be disadvantaged through increased pressure on services. The allocation of housing to refugees in these areas should be gradual, allowing existing residents to become accustomed to new arrivals over time.

It is also timely to consider what can be learnt from diverse social, political and economic contexts in terms of tackling extreme housing exclusion. A forthcoming report involving case studies in eleven countries that will be published by the Joseph Rowntree Foundation will highlight several international lessons (Netto et al, forthcoming). Many of these solutions challenge widely held conceptions of what constitutes a ‘home’ and the processes of ‘home-making.’

Some of these solutions have been made possible by advancements in technology and design. They present alternatives to not dealing with the economic dimensions of housing exclusion, but also in addressing its social aspects.

Perhaps one of the most significant lessons to emerge from this study is the potential for mobilising change and changing the discourse around housing exclusion. In the light of the refugee crisis, this requires viewing the large scale displacement of individuals who are displaced by war and political conflict not as a burden which must be spread, but as an opportunity to consider how we can provide more affordable housing for all.

This week I was invited to a two day workshop on Housing refugees organised by the International Federation of Housing and Planning in Deventer, Netherlands (link provided). Here, academics and practitioners engaged in lively, intense and open debate over what could be done to respond to the needs of refugees. While the housing shortage in many member states of the EU was readily acknowledged as a serious challenge, it was not seen as a barrier. Rather, the current situation was seen as an opportunity for stimulating discussion on the widening of housing options beyond what is conventionally practised in member states, without compromising acceptable standards of accommodation or environmental goals.  Encouragingly, a sense of common purpose united individuals from different political persuasions, cultures and professional orientations and refugees were viewed as part of the solution.

This brought home to me that in considering how we respond to the arrival of refugees, we must not only ensure that the mistakes of the past are not repeated and consider what can be learnt from other contexts. We need to reflect on whom we consider to be inside or outside our ‘imagined community,’ what kind of community we wish to be and the lengths that we are willing to go to achieve this.

Reference

Netto, G, Fitzpatrick, S, Sosenko, F and Smith, H (forthcoming) International lessons on tackling extreme housing exclusion. Joseph Rowntree Foundation: York

Link to IFHP workshop

Dr. Gina Netto, Associate Professor/Reader, Institute of Social Policy, Housing, Environment and Real Estate (I-SPHERE), Heriot Watt University

 

Assessing the cost of the cuts on poorer people and places

Annette Hastings, University of Glasgow

As the Chancellor George Osborne asks government departments to draw up plans for cuts of 40% in the Comprehensive Spending Review due next month, and the Local Government Association warns of a knock out blow to local services and even bankrupt councils, it is worth bringing into focus the impact on service users experiencing poverty – as well as what councils can do to protect such groups and communities.

Between 2011 and 2014, researchers at the Universities of Glasgow and Heriot Watt worked with four local authority case studies across England and Scotland to analyse how local authorities have dealt with growing budget gaps of between 7% and 11% per year. Reports for the Joseph Rowntree Foundation documented the effects of local authority cuts on poorer communities.

The research pointed out how little room for manoeuvre local government has when it tries to protect poorer groups from the worst effects of budget pressures – councils spend almost two thirds of their resources on the services which poorer groups rely on. This means that to date, only a tiny per cent of the total savings which councils have made to manage austerity have come from services which tend to be used more by better off groups – services such as museums, arts and planning.  But more than half of all savings have come from services which are used mostly by the poor – money advice, housing, social care and social work.

It was clear that people were now beginning to notice more significant changes to services – particularly worsening environmental services as well as reduced provision for children and young people. As one service user living in a disadvantaged neighbourhood said about her local park:

‘It used to be good. You could take the kids for picnics. Then they stopped cutting the grass and taking care of it so people couldn’t use it anymore.’

Council and voluntary sector staff reported rises in overall levels of need and that the needs of the most vulnerable and disadvantaged are becoming more intense. Benefit reductions and withdrawals through welfare reform were significantly amplifing problems:

These people are coming to us at the end of their tethers … I don’t think we’ve ever had people quite as bad as we have at the moment” (Advice service provider)

Staff reductions had increased workloads for remaining staff, limited the time frontline staff could spend on public-facing work, and reduced the number of staff in operational roles (such as social work or street cleaning. Many members of staff reported feeling stressed due to overwork, job insecurity and reduced morale. The evidence suggested that some council staff were effectively ‘shock absorbers’, cushioning service-users from the worst impacts of the cuts. Importantly staff were concerned that services were suffering in various ways. They reported reduced standards with clients waiting longer, less time to help clients access services, less collaboration between colleagues, and less time for strategic thinking to improve services long term.

So given these challenges and constraints what, if anything, can local councils do to mitigate some of the impacts of austerity on those who use and need their services to the greatest degree?  To help with this, the research team has produced a tool to help councils assess the impact of cuts on services and on poorer groups of service users.  Called The cost of the cuts: A social impact tool for local authorities, it can help councils to produce a robust assessment of the implications of savings plans for service user groups experiencing varying levels of socio-economic deprivation. It can also help them to analyse the extent to which distinctive population and service user groups experience different levels of cumulative service change, and consider whether savings strategies should be changed as a result.

In producing the Social Impact Tool, there is no suggestion that the level of cuts facing local government should be regarded as necessary or inevitable. However, the Tool might help some councils find ways to minimising some of the harms that these cuts are bound to cause to services relied on to challenge the effects of poverty and inequality.

Please feel free to contact Professor Annette Hastings or Maria Gannon, Research Associate at the University of Glasgow if you would like to know more about the Social Impact Tool.

 

Lone parents on a low income – how much is ‘enough’?

Helen Graham, Edinburgh Napier University

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities.” – Peter Townsend [1]

Research into determining a minimum income standard (MIS) in recent years has suggested that people in the UK broadly agree with Townsend’s understanding of a poverty line that exceeds the most basic needs, and encompasses a range of items and activities that facilitate participation in ordinary life. [2] This includes a certain degree of expenditure, for example, on transport, clothing and social activities. It is, however, a level of expenditure that is beyond reach of those on out of work benefits. For a hypothetical lone parent with one child in 2015, the MIS is £291.14 per week (excluding rent and childcare). Their benefit income (from a typical combination of Income Support or Jobseeker’s Allowance, Child Benefit and Child Tax Credits), at £157.43, covers just 57% of this.

But how do lone parents on out of work benefits themselves feel about the level of income they receive? To what extent do they feel that it falls short of allowing them to meet their needs – and indeed, what do they understand as constituting ‘enough’? Recent research by the Employment Research Institute [3] [4] has explored lone parents’ lived experiences of being in receipt of out of work benefits, and suggests that they simultaneously view the amount they receive as both enough and insufficient.

The general feeling among the lone parents participating in the research is that the amount received is just sufficient to live on and no more. It allows them to keep a roof above their heads, and to pay bills and buy food and other essential items. However, there is little or nothing left over; they are unable to take their children on trips, and buy them the things that they want, and that their contemporaries have. Further still down the list of priorities are lone parents’ own social lives, and in some cases even basic items, with some restricting their own diet in order to save money.

It just gets you there and no more. There’s nothing to play about with, you can’t treat yourself.”

You just scrape by on your benefits really. By the time you pay your bills and get the shopping… I manage. I’ve got to manage!

It is a struggle, it’s not easy, but I get by. But there’s never any spare money to do anything, if you wanted to take the kids out anywhere.”

I get by. I do struggle, you cannae deny that you struggle, but in all fairness it’s enough to cover me, my weans, it’s enough to make sure we’ve got all of our bills, it’s enough for the way we live.”

You can’t really ask for any more, can you? You get what you get, you don’t work, so you can’t.”

Lone parents on how they manage on their income [3]

The MIS threshold allows for expenditure on what many of the participants would describe as extras or treats; it includes the resources to run a car if required, and the ability to spend around £45.76 per week on ‘social and cultural participation’. This would encompass things like taking children on trips, as well as the opportunity to socialise themselves. But in reality these activities constitute a substantial proportion of their income, which is in any case already accounted for by essential items.

Quite often I get money on Tuesday and by Wednesday I have got pennies in my purse. I don’t have £2 to give to my daughter to go to her Guides thing.”

If the Scottish Government want children to be healthier, we need to get them out… but for [self and two children] to go on an away day it would cost £7.50, that’s like 10 per cent of my benefits for that week.”

I have one social night out and that’s it, it foils me for the whole month. My budget is that tight, so if I have a night out, I struggle. There’s no room to live, really. When I take into account the needs of my family, of my daughter, to encourage her to grow and educate her… for me [daughter’s extracurricular activities] are all educational activities that are going to benefit her in the long run… I want to make sure these things are maintained for her.”

Lone parents on the cost of activities [4]

Most of the lone parents participating in the research explicitly defined the amount they receive as enough – as one participant put it,  for the way we live. And yet there was also a sense that it is not; that when even modest expenditure on items that would be beneficial to their children is out of the question, then the way they live is not enough. That their children deserve more, to live a life that is not so far out of step with that of their peers.

The inability to participate in everyday social, cultural and educational activities can only be damaging to the social relationships of lone parents, and to the social and educational development of their children. Those who find themselves trapped on out of work benefits by the difficulties of reconciling their roles as sole earner and carer, and awarded little by a system which places a low value on caring, are reaching for an ordinary life and falling short. If they are to lead ordinary lives, they will need a helping hand.

[1] Townsend, P. (1979). Poverty in the UK. Harmondsworth: Penguin.

[2] The research established a minimum income standard through a process of discussion and debate between experts and focus groups representing a cross-section of the population. A minimum income calculator is at: http://www.minimumincome.org.uk/. The methodology is outlined in Bradshaw et al. (2008). A minimum income standard for Britain: what people think. York: Joseph Rowntree Foundation; 2008. http://www.jrf.org.uk/publications/minimum-income-standard-britain-what-people-think

[3] The Employment Research institute was commissioned by the Glasgow Centre for Population Health to conduct research into the impact of welfare reforms on lone parents in Glasgow.

Graham, H., & McQuaid, R. (2014). Exploring the impacts of the UK government’s welfare reforms on lone parents moving into work. Glasgow Centre for Population Health. http://www.gcph.co.uk/publications/497_impacts_of_welfare_reforms_on_lone_parents_moving_into_work_report

[4] The Employment Research Institute has also been commissioned by the Scottish Government to conduct a longitudinal qualitative study on the impacts of welfare reform in Scotland.

Graham, H., Lister, B., Egdell, V., McQuaid, R., & Raeside, R. (2014). The impact of welfare reform in Scotland – Tracking Study: Year 1 report. Scottish Government Social Research. http://www.gov.scot/Resource/0046/00463006.pdf

Graham, H., Egdell, V., McQuaid, R., & Raeside, R. (2015). The Impact of Welfare Reform in Scotland – Tracking Study – Sweep 3 report. Scottish Government Social Research. http://www.gov.scot/Resource/0047/00477917.pdf

Dr Helen Graham, Research Fellow, Edinburgh Napier University

The Challenge of Challenging Poverty Myths

Stephen Sinclair, Glasgow Caledonian University

Most people in Britain are ignorant about poverty and welfare. This might sound rather superior or even sneering coming from an academic paid to study social policies. However the point is not to boast but clarify what is involved in challenging poverty and in particular prevailing false beliefs about it.

Evidence of the scale of misconceptions about poverty and those who experience it in Britain is well established and abundant. For example, about one third of people in Britain believe that more is spent on Jobseeker’s Allowance than on old age pensions. In fact £4.9 billion is spent each year on JSA compared with £74.2 billion on pensions. This is not merely a slight overestimate, it is the opposite of the case by a factor of 15. Similarly, the public grossly over-estimates the scale of social security fraud and abuse: 75% of respondents to the 2013Scottish Social Attitudes survey believed that ‘large numbers of people falsely claim benefits’ and estimate that about one third of all benefit spending is lost on fraudulent claims. However the UK government estimates that about only 0.7% of the total benefit bill is fraudulently claimed, compared to 2% lost due to administrative error.

It is important to try to correct such mistakes and not allow misleading claims or outright falsehoods to pass unchallenged. There are several excellent fact-checking sites and cases where Social Policy academics or campaigning organisations have rebutted misrepresentations of poverty and policy. Important examples of this include the work of the Poverty and Social Exclusion Survey team correcting some of the misleading claims which underpin the UK Government’s Troubled Families programme or Fran Bennet’s critique of Iain Duncan Smith’s commitment to redefine ‘child poverty’ as defective behaviour rather than a matter of resources and opportunities. A particularly notable example of challenging damaging and misleading images of poverty is the Poverty Alliance’s Stick Your Labels campaign, which has secured widespread political support in Scotland to avoid stigmatising language and portrayals of people experiencing poverty. Such responses will always be valuable and must continue, and providing evidence to challenge misrepresentations and ill-considered views is an important academics duty.

However ‘fact’ checking and corrections are not enough to challenge some of the views and accounts of poverty which have a hold on the British imagination. Some of the opinions on this issue are so wide of the mark and so firmly held that evidence alone cannot shift them. Some Social Policy academics have noted persistent indestructible zombie theories and concepts – ideas that somehow still remain alive, stumbling through the public mind and policy debates no matter how much evidence is produced to kill them off. A common example is the idea that poverty is attributable to a disaffected underclass or to young people who lack aspirations (as opposed to understanding just how firmly the odds are stacked against them). The resilience of some false beliefs means that they should be regarded as myths, i.e. ‘a conviction false yet tenacious’. Myths are not corrected by evidence nor shaken by argument. In fact contrary evidence is rejected as biased, and challenging arguments are dismissed, for example as the rhetoric of ivory tower academics detached from the ‘real’ world. In dismissing some public attitudes as myths there is a danger again of appearing disdainful, but in the face of intransigent resistance to evidence this risk must be faced. We might support a plurality of values in society and protect the equal right of all to express their views in welfare debates, but there is no democracy over facts. The challenge is that facts about poverty and welfare do not ‘speak for themselves’, they are filtered through frames of interpretation. These filter what people are able or willing to see. Such frames are not themselves questioned; in fact it takes a considerable effort even to realise that everyone sees the world through the frames we each have acquired. As George Orwell observed ‘To see what is in front of one’s nose needs a constant struggle’; most people are not willing to make the effort.

Therefore, in one sense it is pointless to try to ‘correct’ or rebut myths; they should be regarded as something to be studied and explained[1]. This does not seem to provide much comfort for those trying to challenge mistaken views and false beliefs about poverty. However one implication is that is if we decide to wait for British public opinion to swing behind a commitment to seriously reduce poverty we could be waiting a long time. Instead of waiting for public support to catch up with the facts of poverty, political leadership is required to do what is right even if it might not currently be popular. The previous Labour government deserves some credit for showing such leadership: if they had waited for public concern to become animated then they would not have introduced the measures which contributed to reducing poverty among older people, which had been one of the greatest sources of the risk of poverty for about 50 years after WWII. Similarly, the pledge made in 1999 – and now effectively abandoned by the current UK government – to eradicate child poverty within a generation was not made in response to popular demand, although it proved popular when it was drawn to the public’s attention. It may be politic to wait for opinions to shift, but when the evidence is compelling and public opinions are based on ignorance and intransigent prejudice it is not ethical and certainly not courageous. If we always took that safe course then not only would there be no equal right to marriage in Britain but homosexuality would still be criminalised. Understandably, politicians would prefer to do not only what is right but also what is popular. Unfortunately, when it comes to challenging poverty in Britain this is a luxury that may be paid for by the avoidable suffering of those who most need protection from the misinformed and mystified.

[1] As I try to do in my forthcoming book: An Introduction to Social Policy Analysis: Illuminating Welfare (Policy Press).

Dr Stephen Sinclair is Reader in Social Policy at Glasgow Caledonian University

Women’s poverty and ‘austerity’ in the UK

Kirstein Rummery, University of Stirling

Policies in the post 2010 Coalition government were dominated by the spectre of the 2008 private sector financial crisis, which by 2010 had turned into a global recession reducing economic production and seeing rises in unemployment. The UK in common with other G20 countries initially adopted a fiscal stimulus approach (quantitative easing) which slowed the recession but led to a sharp rise in the budget deficit to 11.6 % in 2009-10 the highest since 1945. The Coalition government which came into power in 2010 took the position that addressing the deficit was an economic necessity, and social policy therefore followed this aim. The primary mechanism to achieve this was cuts to public expenditure – a policy paradigm which has come to be known as ‘austerity’. Those dependent on the state for a proportion or the whole of their income were more affected by the changes than the average: government figures show that whilst an estimated 21% of people in the UK are living in poverty, they are bearing the brunt of 39% of the funding cuts. Adopting a policy of fiscal austerity rather than investment in response to the crisis meant that cuts to public services were inevitable. Health was the most protected area, seeing only a 1% cut of the initial budget in 2009-10. Housing was cut by 27% of the budget, and the other hardest hit departments included further and higher education (31%), social care (20%), early years education and care (18%). 20% of the cut in budget came from other areas including social security. Cutting spending meant that whilst 21% of the population are estimated to be living in poverty, they bore the cost of 39% of the cuts. These cuts impact differently on women, and particular groups of women, than they do on men. 20% of women’s income comes from social security and tax benefits, as compared to 10% of men’s, and of the £26billion of changes to benefits and tax credits since 2010, £22billion were born by women and £4billion by men.

Women’s role as parents and carers means that they are at risk of poverty, and will feel the impact of the withdrawal or reduction of state benefits more acutely than men. For example, 92% of lone parents are women, and 95% of lone parents dependant on income support are women; 74% of people claiming Carers Allowance are women and they make up around 60% of unpaid carers. Moreover, the development of Universal Credit, designed to make work pay and encourage more people into the workforce, did not take childcare issues into account. As a result of changes to child benefit, the childcare element of working tax credit and income support, low income women with very young children were forced into looking for work, women with high income partners lost what was often their only independent source of income, all women lost some income that was the only source targeted directly at children, and access to childcare was reduced for low-income families, particularly lone parents.

Although unpaid carers save the UK around a third of its care budget, Carers Allowance is currently around only 25% of the minimum wage, which makes it the lowest rate for any income replacement benefit. Carers UK estimates that around £1bn will be cut from carers’ incomes between 2011 and 2018. Women make up the majority of carers, particularly those of working age and are the majority of those providing more than 35 hours of care per week, and are also more likely than male carers to be working part-time (and it should be noted that women are less likely than men to self-identify as carers so these figures are likely to be underestimates). Women are also more likely than men to be working as formal carers, either in the statutory or market sector (which relies heavily on services commissioned using state funding either through local authorities or through disabled and older people using care-related benefits such as disability living allowance and self-directed support payments to purchase care and support). This means that as workers they will bear the brunt of cuts to social care funding.Overall, workers in the public sector numbered around 5.7 million in mid–2013, and made up just under 20% of total employment. Nearly 2/3rds of this workforce are women, and tend to work in the NHS, education and social care. Changes to the delivery of public services have also had an impact on women. There have been big increases in private sector employees delivering services historically dominated by the public sector – for example, in the mid 1990s, private sector nursery nurses and assistants accounted for around 40% of the nursery workforce, but increased to more than 70% by 2010. In social care the statutory workface numbers have remained stable, whilst numbers in the private sector have more than doubled since 1995 and by 2010 ¾ of the social care workforce were in the private sector. The growing use of casualization in the workforce, and the move towards direct payments, means that women’s jobs are not only subject to cuts as part of public sector spending cuts, but they also experience substantially less job protection and higher rates of income deflation and job insecurity as their jobs are moved into the private sector.

The Women’s Budget Group has calculated that the cumulative effect of losses to total income can be estimated thus:

Group % loss Disaggregated by sex
Single parents 15.1 Single mothers lose 15.6%; single fathers lose 11.7%
Single pensioners 11.6 Single women pensioners lose 12.5%; single male pensioners lose 9.5%
Couples with children  9.7 Data not available
Single childless adults  9.7 Single women lose 10.9%; single men lose 9.0%
Couple pensioners  8.6 Data not available
Childless couples  4.1 Data not available

This represents a substantial increase in poverty and loss of control over resources for women, particularly low income women. In addition, low income families are experiencing greater food poverty: the use of food banks more than doubled between 2012 and 2014, due to benefits sanctions and low—pay as well as direct cuts to state derived income. Certain groups of women have also suffered multiple discrimination: as well as being overrepresented amongst carers, women are also overrepresented amongst disabled people likely to be in full time employment and to be earning less than disabled men: the disability pay gap for disabled men compared to non-disabled men is 11% but for disabled women it is 22%. Refugee women also experience much greater delays in accessing benefits such as Job Seekers Allowance and Child Benefit and Child Tax Credits which can cause significant hardship for women (and children) without access to kinship-based networks of support. In addition the impact on older women, although yet to be fully assessed, includes the impact of the raising of pension ages (pushing older women into work activity for which they often lack the skills or training) and the ‘triple lock’ on uprating of the state pension (on which women are more likely to be reliant than men).

Challenges by the Fawcett Society and the Equalities and Human Rights Commission to force the government to carry out an Equalities Impact Assessment of austerity were suppressed or ignored. It is probably going too far to say that fiscal austerity was a policy aimed at impoverishing women, but it is certainly the case that intentionally or not it has contributed to the substantial growth of women’s poverty and gender inequality in the UK.

Kirstein Rummery, Professor of Social Policy, University of Stirling and Centre on Constitutional Change 

Tweets: @KirsteinRummery

‘Poverty Punishment’ Overkill: The deliberate creation of destitution through benefit sanctions

David Webster, University of Glasgow

Hayley Bennett has already written about the short-sightedness of ‘poverty punishment’ tools in Active Labour Market Policies designed to push people into work. The harshest of these is the withdrawal of benefits through ‘sanctions’. In the year to March 2015, 587,000 benefit sanctions were imposed in Great Britain on Jobseeker’s Allowance (JSA) claimants, 43,300 on Employment and Support Allowance (ESA) claimants, and 43,800 on lone parent claimants of Income Support. What is particularly striking about today’s British sanctions regime is the way it deliberately drives many claimants into complete destitution, thus damaging their health, in extreme cases causing death, and certainly contributing mightily to the growth of food banks though, rather obviously, not helping them to find a job since their energies are taken up by the struggle to survive.

It did not use to be this way. Up to the late 1980s, disentitled or sanctioned claimants could claim Supplementary Benefit as of right, if they passed the normal test of resources, at the usual rate minus 40%. But in 1988, for sanctioned unemployed claimants with no contributory entitlement, Michael Portillo withdrew the new Income Support and substituted a regime of discretionary ‘hardship payments’, which have to be separately applied for. This was extended to contribution-based Jobseeker’s Allowance claimants in 1996 by Portillo and Peter Lilley, and then to Employment and Support Allowance claimants in the ‘work related activity group’ by Iain Duncan Smith in 2012. In 1996, the rule was introduced that ‘non-vulnerable’ claimants (arbitrarily defined) could not even apply for hardship payments for the first two weeks of a sanction or disallowance. The official DWP Decision Makers’ Guide acknowledges that the two week wait will often damage the claimant’s health (para. 35099). The criteria for ‘hardship’ are specific to the sanctions regime and are particularly harsh – for instance, a person with cash in hand equal to their ‘applicable amount’ will be refused even if the money is owed to a payday lender (DMG para. 35198). And as with any discretionary benefit, the complicated application process, lack of information given to claimants, and scope for bullying by junior officials mean that many claimants never even apply for the ‘hardship payments’ they ought to receive. The opaqueness of the system has been increased by the absence since 2005 of published statistics on hardship payments, other than a Freedom of Information response in 2013, and a Parliamentary Answer of 21 January 2015. Nevertheless we know that in 2011/12, when there were 705,000 JSA sanctions, there were only 64,000 hardship payment awards, indicating that, allowing for repeated sanctions on some individuals, little over one in ten of sanctioned claimants got a hardship payment. A Parliamentary Answer on 6 March 2015 promised that more information would be published in May 2015, but to date nothing has appeared.

Universal Credit introduces further changes to ‘hardship payments’. In particular, it makes them repayable, which given the rule that repayments are made at the rate of 40% of benefits paid, means in effect that the duration of sanctions becomes three and a half times the stated length. And under UC, all claimants have to demonstrate seven days’ compliance with benefit conditions before they can apply for hardship payments.

The public have been brainwashed into intolerant attitudes to unemployed people. For instance, YouGov found in March 2011, at the height of the recent severe recession, that only 20% of the population thought the main reason why some people are unemployed for long periods was lack of jobs! Despite this, support for cutting off all the benefits of claimants not complying with conditions, regardless of what hardship it causes, was fairly limited, at 21% in the UK and 14% in Scotland. More people (26%) thought they should lose none or a small amount, with the largest group (49%) thinking they should lose a large amount, but keep enough to cover their basic needs.

In spite of this relative lack of public support for making people destitute, the Portillo/Lilley regime has remained in place for almost two decades without serious challenge. The only government review, by Professor Paul Gregg in 2008, commented that sanctions should not cause ‘excessive hardship’ (undefined) but did not actually consider any evidence on the question whether they do.

This year, at last, has seen some heavyweight criticism. The House of Commons Work and Pensions Committee report on Benefit Sanctions Policy beyond the Oakley Review in March 2015 recommended that the two-week wait should be abolished and that where a claimant is vulnerable or has children, the DWP itself should initiate the hardship payment process. It was also highly critical of the lack of published information about hardship payments and called for at least annual data on numbers of hardship payment applications, numbers of awards, and numbers of those awards made from day one of a sanction.

These are modest reforms but they would relieve a disproportionate amount of misery and damage for claimants, and stress on the public and voluntary services who have to cope with the consequences of the destitution so casually created by the sanctions regime. The government’s response to the Work and Pensions Committee report, long delayed, has been promised for this month (October 2015). Let us hope that when it comes it will face up to at least this intolerable aspect of the ‘poverty punishment’ machine.

Dr David Webster is an Honorary Senior Research Fellow in Urban Studies, University of Glasgow. His papers on benefit sanctions are available at www.cpag.org.uk/david-webster and http://www.gla.ac.uk/schools/socialpolitical/research/urbanstudies/projects/ukbenefitdisallowances/

Inequality and student finance

Lindsay Paterson, University of Edinburgh

One of the great political myths of our time is that the current system of student finance in Scotland is progressive and that the system in England is iniquitous. Free undergraduate higher education has become such a premise of debate in Scotland that almost no politician who wants to claim egalitarian credentials dare challenge it. That same view now seems to be percolating to the left in England, since Jeremy Corbyn became leader of the Labour party. His policy, too, is to abolish fees, rejecting what he claims is the errors of New Labour which introduced fees in the late-1990s.

All these people claim that free tuition favours the poor. Yet the evidence is consistently and strongly that it does not, or at least not in present circumstances. The background here is how to finance a massively expanded system of higher education, with participation rates having risen from under 20 in every 100 young people in the 1980s to about 50 in every 100 today. In theory, this could have been paid for by taxes. But no government in the democratic world has successfully pursued a programme of raising taxes in recent decades. That approach to funding the welfare state is too unpopular, even in the extreme circumstances which some countries (notably Greece) have faced since 2008.

So the question has become how to find other sources of finance. The rationale for charging fees for university is that the beneficiary – the graduate – should pay part of the cost. Of course, both society and the individual benefit, but no serious politician in the UK (or anywhere in Europe) has proposed that the whole cost should be borne by the individual. The sharing has also now come to be only when the graduate is indeed benefiting financially – after graduation. Young, full-time students do not pay anything upfront, anywhere in the UK. But in England, there is retrospective payment, in proportion to earnings. In Scotland, nothing is paid, ever.

Three main questions then arise about the policy of charging fees:

  1. Has it discouraged overall participation in higher education?
  2. Has it widened inequality of participation?
  3. Has it disproportionately disadvantaged poor students?

On the first question, the answer is unequivocally that it has not. We can look at this in two ways – over time, and across countries. Over time, the graph of participation just keeps on rising, with some very short-term blips.[1] In England, these blips were in the years of the two large fee increases – 2006 and 2012. In each case, the proportion of 18-year-olds who applied to university dropped temporarily by about 1 or 2 percentage points. But the rate recovered again the year after, and continued inexorably upwards thereafter.

Across countries, the main comparison of England is with Scotland, where the rate of increase – even with no upfront fees since 2000 – has been very similar. Indeed, even when fees were abolished completely for Scottish students in 2007, there was no discernible effect on the trajectory, and certainly no difference at all from what happened in England. Comparing countries more widely, there is simply no relationship between the rate of participation and whether fees are charged. For example, the participation rates in New Zealand (which charges fees financed through loans that are repayable after graduation, as in England) and Sweden (where higher education is free) are very similar.[2]

On the second question the answer is also unequivocally that there has been no harm. Poor students and rich students have been swept along in the wave of generally rising participation. There is inequality, but whether fees are charged has not made it worse.[3] England provides a key test. The ratio of university application rates from rich areas and poor areas has steadily declined over the past decade, through two large fee increases. It was about 4.4 to 1 in 2004, declining to 2.6 to 1 in 2014. In Scotland, the decline has been similar, but when fees were abolished the inequality actually grew temporarily, as well-off students took advantage of the state’s generosity. This resembled what happened in Scotland further back, in the early 1990s, during the first phase of expansion of higher education. Though it was all free then, the main initial beneficiaries were the children of the middle class.

The important topic in connection with the third question is not the matter of fees but rather how students finance their living costs. Public finance for students is much more generous in England than in Scotland. There are better non-repayable bursaries for poor students, and also better loans. The effect is that the scheme of student finance which was put in place in England after 2012 is the most egalitarian of any scheme anywhere in the UK since fees started to be charged a decade and a half ago.[4] In contrast, the Scottish package disproportionately benefits students from middle-class backgrounds, who end up with less debt than any other group. The main reason for this – which at first sight might seem counter-intuitive – is because loans (including fee loans) are not repayable until after graduates start earning above a certain level, and because low-earning graduates have a large part of the debt eventually written off.[5]

It is not inevitable that free higher education would be fiscally regressive in these ways. Nor is it inevitable that charging fees should go along with progressively redistributive bursaries and loans. Free services tip over into being progressive when all or a large majority of a population uses them – such as primary or secondary school. Free services are also progressive when they are disproportionately used by poor people – such as the National Health Service. English financial support was made more progressive as a deliberate political bargain when fees rose.

But the point remains. For the time being, Scottish policy on student finance is socially regressive. So: will any political party take the risk of saying that publicly when campaigning for the Scottish parliamentary elections next May?

[1] Table 1 in Higher Education Statistics Agency (2014), UK Application Rates by Country, Region, Sex, Age and Background. https://www.ucas.com/sites/default/files/jan-14-application-rates.pdf

[2] Section B5 in OECD (2014), Education at a Glance. http://www.oecd.org/edu/Education-at-a-Glance-2014.pdf

[3] Tables 11-12 in Higher Education Statistics Agency (2014), UK Application Rates by Country, Region, Sex, Age and Background. https://www.ucas.com/sites/default/files/jan-14-application-rates.pdf

[4] Hunter Blackburn, L. (2014), The Fairest of Them All? The Support for Scottish Students in Full-Time Higher Education in 2014-15, Centre for Research in Education Inclusion and Diversity, University of Edinburgh. http://www.centreonconstitutionalchange.ac.uk/sites/default/files/papers/workingpaper3_fairestofthemall_creid.pdf

[5] Johnston, A. and Barr, N. (2013). ‘Student loan reform, interest subsidies and costly technicalities: lessons from the UK experience’. Journal of Higher Education Policy and Management, 35, 167-178. http://www.tandfonline.com/doi/full/10.1080/1360080X.2013.775925

 

Professor Lindsay Paterson is Professor of Education Policy, Social Policy, University of Edinburgh