Rethinking post-crash social policy – IPPR’s Condition of Britain

Another day, another think-tank report. That, no doubt, is how it must feel to news desks, political hacks and listeners of the Today programme alike.

Many of those reports disappear without a trace. But of those that leave a mark some succeed in making an argument that chimes with the times even if it’s not linked to a well chiselled policy; others have specific proposals that catch the eye but are often disconnected from any larger agenda.

Today’s widely trailed IPPR report, the Condition of Britain, is unusual in succeeding on both counts. Whether or not you subscribe to all its conclusions, it is refreshing in providing a clear line of sight from a proper assessment of the health of family and civic life, to a principled set of arguments about reform, resulting in a funded and pragmatic social policy programme. That alone sets it apart.

It has three broad areas of concern. First, it takes seriously the question of how to govern – what is rather grandly referred to as ‘statecraft’.  The nature of the rules and institutions that oversee social policy, the distribution of power and the proximity of decision-making to those affected, is dealt with as a central exam question rather than afterthought. In doing so it lauds the local institutions -children’s centres, youth volunteering programmes, neighbourhood councils – where experiences are shared and common bonds have the possibility of being forged. And its guiding philosophy is to counter the technocratic tendency to see every social problem as being amenable to a tax-tweak, Whitehall guidance or behavioural nudge (though it succumbs to some of these too).

More broadly the report is unequivocal that cities (and outside urban areas, upper-tier authorities) are the right level to tackle many of our pressing economic and social challenges, hence they propose a host of powers be devolved including, over time, integrated housing budgets (including housing benefit). But rather than a one size fits all approach to devolution it embraces the messiness of some local authorities getting far more power than others. In doing so it steers clear of top-down blue-prints for big-bang devolution imposed in the name of emancipatory localism. This is the right call, both in terms of policy and politics. On the latter, I recall in the early 2000s briefing Tony Blair about a proposal from the (now) Communities Department to introduce mandatory single-tier authorities across England in the name of stronger local accountability. As quick as a flash he replied “so they want to abolish Essex? Tell them to go away and think a different thought”. IPPR don’t fall into this trap.

A second central strand of the report concerns jobs: how should public policy help support work? The argument made is that high levels of employment are vital not just in terms of ensuring fulfilling lives, but also in improving living standards in an austere era and, crucially, in terms of sustaining the tax-base needed to fund the public services that a decent society needs.

In this respect the argument complements and echoes many of the themes of the RF’s Commission on Living Standards – one of the other big policy reviews of this Parliament (though I suppose I’m not exactly an impartial observer). Indeed, the two reports are as one in prioritising an expansion of quality and affordable childcare as both an economic and social necessity. Both make clear the imperative to support dual-earning households and propose important reforms to Universal Credit to avoid punitive tax rates deterring second earners (overwhelmingly women). They are also as one in giving prominence to the employment rate of older workers, an area where the UK is fast improving yet still lagging behind the best in the EU – and is one of the biggest challenges of our times.

The third tranche of proposals concerns the desire to reinvent contributory social security for the 21st century, including higher levels of support for those who have ‘paid in’ for longer periods. This is perhaps the most politically ambitious yet difficult part of the report. The intellectual zeitgeist is certainly in favour of such a shift and IPPR’s ideas on this will get a sympathetic hearing. Indeed, Labour has indicated that it will look at creating a higher level of contributory Job Seeker’s Allowance for those who have paid in for longer (five years has been floated).  This would be funded by tightening access to the same benefit for those who have paid in for shorter periods, implying that people who fail the means-test (based on household income and assets) will no longer be eligible for any support.

This shift is striking as the post-Beveridge history of the contributory principle has generally not been a happy one. When in power both main parties have almost without fail weakened the idea of contribution, even though in opposition each side has occasionally explored renewing it.

Nor is the current backdrop particularly auspicious. The public mood remains hostile to working-age welfare (in sharp contrast to strong support for the state pension or the NHS). The UK has remarkably low levels of welfare support for the out of work – so, as Labour’s proposal suggests, it will be an incredibly tall order to fund more generous contributory payments out of yet deeper cuts to other benefits (and there is currently scant appetite for tax-rises to pay for higher welfare spending). And there are, of course, further far-reaching reductions in welfare expenditure scheduled for the next parliament. More widely, it is arguable that the UK’s flexible labour market makes contributory social security an even harder sell today than in previous generations: the pain of recessions is now far more likely to be experienced in the form of lower pay, under-employment and job-insecurity rather than unemployment per se.

Depending on your outlook this context either provides the necessary burning platform to think truly radically about a modern case for a contributory system to help re-legitimise welfare; or it suggests that now might be the least promising moment since Beveridge to attempt this shift.  On balance, I’d wager that some of the report’s other interesting ideas for new forms of collective insurance – against the cost of elderly care or the risk of being unable to pay the mortgage – may in the longer run have more traction.

Ultimately reports tend to be judged in terms of the policy purchase they get and the fortunes of this report are, perhaps inevitably, being closely tied to those of the Labour Party (Jon Cruddas kicked off the process and Ed Miliband launched it). But it would be a shame if this deterred other parties from engaging properly with it as there are themes here for everyone.  It has always, for instance, surprised me that the Lib Dems haven’t considered making their tax-allowance agenda more family-friendly by introducing a child element into it (as used to exist), an idea that the IPPR report winks at though doesn’t commit to. Equally, I could imagine the likes of Tim Montgomerie or Rob Halfon being as sympathetic to the proposals for boosting the supply of affordable credit (in order to erode the position of rapacious payday lenders) as anyone on the left.

Whatever happens to its recommendations it’s certainly the case that we’ve been overdue a serious attempt to rethink post-crash social policy and the institutions that govern it. Today’s report fills that gap. Grounded in a granular account of contemporary family and community life – what Nick Pearce terms ‘everyday hope and struggles’ – it still manages to make ambitious arguments about national social renewal.  And for that alone it deserves a very wide readership.