Given the changes to government policies over the post-war decades, this final section will deal with the scenario we have been dealt with at the present. As can be noted from earlier parts of this chapter, the state has, in hindsight, undergone a specific and somewhat ordered shift to the present situation (although this has undoubtedly appeared more or less chaotic and sporadic at particular times), with a gradual transformation in policy rhetoric, an almost complete overhaul of the nature of state welfare provision, and inversion of relationship between the state and its citizens in many policy spheres (e.g. payment for higher education in England). The issue that now arises is that with characteristics somewhat akin to previous political- economic crises and the conditions immediately thereafter (rising employment, economic restructuring etc.) (Davies and Pill, 2011), is what we are currently viewing a renewal of what went before, or is it something entirely new, that is, a distinct qualitative shift which we might come increasingly to recognise as a ‘post-neoliberal’ era (Peck et al., 2010)?
Most capitalist states are now characterised by their convergence towards the intensification of workfare, and their allegiance to an austerity drive and fiscal rationality in the face of mounting public sector debt (Chung and Thewissen, 2011). Within this rhetoric, there are a number of agendas coming to the forefront of policy discourse, such as welfare-to-work, work first, and make work pay (Newman, 2011). Similarly, the responsibility for welfare once again appears to have shifted to the right, with the state washing its hands of all but the most basic forms of welfare provision, and instead forcing reliance upon the private and voluntary sectors as citizens are left to fend for themselves to a large extent (Patrick, 2012). Despite these facets, it is still unclear as to whether this “responsibilisation” of welfare under austerity (Howell, 2015:69) represents a definitive break in policy from the past, or whether it is a continuation of existing policy rhetoric in a different guise.
With this in mind, the 2010 UK General Election became pivotal, not least for the future structure of state welfare, with both the major parties advocating cuts to welfare as part of wider reductions in public expenditure to lower the budget deficit. However whilst Labour promoted measured cuts to welfare as part of a “socially democratic response”, the Conservatives pressed for rapid, deep cuts to welfare to
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negate the deficit as quickly as possible, with much greater emphasis on people helping themselves through the ‘Big Society’ (Smith, 2010:818). Indeed the
Conservative General Election Manifesto (Conservative Party, 2010:3) stated that: “Gordon Brown’s debt, waste and taxes have wrecked the economy and threaten to kill the recovery. A Conservative Government will take action now to cut the deficit, stop Labour’s jobs tax, help keep mortgage rates low and get the economy moving. We will create a new economic model built on
investment and savings, not borrowing and debt.”
In contrast the Labour General Election Manifesto (Labour Party, 2010:12) stated that:
“Our job guarantees will put an end to long-term unemployment and a life on benefits. No one fit for work should be abandoned to a life on benefit, so all those who can work will be required to do so. At the same time, we believe that people should be able to earn enough to live and be better off than on welfare.”
A new Coalition Government between the Conservatives and Liberal Democrats came to fruition, although without a clear political consensus and the power weighted firmly towards the Conservative side of the Coalition. Despite their distinct ideological differences, there was a mutual agreement to undertake a process of fairly severe fiscal austerity implementation as a method of rapidly reducing the burden of national debt. Whilst such a course of action might well be expected from the Conservatives, it was a far reach from the traditional values of fairness and equality of welfare for the poorest people in society advocated by the Liberal Democrats in their election campaign. In fact their General Election Manifesto economic plan stated that:
“We set out in this manifesto a clear plan to bring the budget back under control, being honest about the tough choices we need to take. We will cut taxes for millions of working people and pensioners, paid for by making sure that the very wealthy pay their fair share and that polluting air travel is
properly taxed. We will boost the state pension by immediately restoring the link with earnings growth.” (Liberal Democrats, 2010:13)
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Such wholesale changes to government policy strategy, including policies around student fees, the Spare Room Subsidy (Bedroom Tax), the Work Programme and Universal Credit, have been seen as the key to rapidly reducing the imposing budget deficit which the Coalition Government, and the social economy as a whole became shackled with from the onset of the global financial crisis in 2008.
Right from the outset the Coalition were committed to a £70 billion reduction in spending by 2016/17 and the lowering of public expenditure to 40% of GDP by 2031/32 (Institute for Fiscal Studies (IFS), 2010). With decisive cuts needing to be carried out to address the largest level of public debt experienced since the end of the Second World War (see Figure 5), resulting from increased public sector spending by earlier Labour administrations as well as the effects of the global financial crisis, the large public sector therefore became the Coalition’s obvious target of fiscal rationalisation. Their policies centred on the idea of a smart public sector with limited state interference. Such a policy agenda entailed both the
implementation of stringent cut backs on state welfare and services, coupled with a marked increase in reliance on private sector and voluntary (third) sector investment and provision (Johnston et al., 2011).
By implementing measures such as the new universal system of credit - a
replacement for several different forms of benefit now all moulded into one, simpler form of provision - tax reforms, as well as altering employment criteria and the
requirements of individual citizens (Jones, 2012), the government has now created a situation where many believe the state has effectively become unshackled from the responsibility of holistic provision for its citizens (Patrick, 2012). The government has ensured that there is now a far greater emphasis on the role of the individual and voluntary organisations to facilitate self-help initiatives and henceforth achieve the minimum standard of living which should be expected in the UK today (Hamnett, 2010; Milbourne and Cushman, 2014).
Whilst such a mandate for citizens to work and earn welfare entitlements was in place under the various New Deal initiatives of the Labour Governments, this latest Coalition social contract has gone further by enforcing even more strict conditionality upon welfare-to-work in post-crisis welfare provision. Indeed, whilst the policy
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far more radical approach to state welfare provision (including the ongoing process of reclassifying those on disability benefits and restructuring working tax credits and child benefits such that fewer families are entitled to them), it is not entirely novel in its methodology. Instead, in most respects it appears to be simply an extension and amalgamation of a number of policy processes which were already in place before the Coalition came to power (Hobsbawm, 2011), although this has yet to be proven conclusively through research findings.
In addition, this continued neoliberalisation has formed the basis for the
government’s key agenda to ‘make work pay.’ The Coalition has continued with the ‘roll out’ phase of Neoliberalism (Peck and Tickell, 2002:396) which formed the basis to ‘make work pay’ for their Labour predecessors, and they firmly believe that paid employment is the most effective way out of poverty (Daguerre and Etherington, 2009), even for those participating in the labour market at the lowest tier. However, unlike the previous government, they did not agree with the idea of supplementing income with extensive benefits to essentially fabricate a decent standard of living for all at great expense to the public purse. What they proposed was a complete
overhaul of the existing benefits system. This has entailed a range of ‘smart’
governance measures, most pertinently concerning the reduction of unemployment benefits to an absolute minimum level and the implementation of a universal system of credit for those in regular work (Hamnett, 2010). Furthermore, it has entailed greater means-testing of welfare provision such that the number of people able to claim support such as disability benefits is being reduced as far as possible (Weston, 2012), whilst those who earn more than the national average wage face losing
benefits payment altogether.
The Coalition Government’s Welfare Reform Act 2012 (HM Government, 2012) outlined by Work and Pension’s Secretary Iain Duncan-Smith forms the basis of this post-crisis workfare agenda. The result has been a drive to push those on the fringes of employment back into the jobs market through a systematic retrenchment of social protection such as unemployment benefits (Fletcher, 2011), yet at a time when
unemployment itself has continued to rise (Hamnett, 2010). Whilst bolstering the strength of the Coalition’s austerity discourse, such a system has served to further discriminate against those most in need - low-skilled women, single parents, young people emerging into the jobs market from a poor educational background, the
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elderly and ethnic minorities occupying temporary and uncertain working
arrangements on the fringes of society (Taylor-Gooby et al., 2014). It is these groups who tend to inhabit the most precarious employment conditions and so are the first to be pressurised by welfare reforms (Standing, 2011; Theodore and Peck, 2013), which in turn has been accentuated by the government’s more stringent form of welfare-to-work socio-economic policies (Harkness and Evans, 2011).
In effect the government has attempted to extinguish the notion of a “dependency culture” (Lindsay and Houston, 2011:704) as well as distinctive behavioural patterns associated with work avoidance, which they insist are indignantly omnipotent in British society (Houston and Lindsay, 2010). What is important to garner from this, is that this signifies something qualitatively different occurring. The idea of a
dependency culture is nothing new, but the underpinning socio-economic factors for tackling this issue have been markedly different for the Conservative-Liberal
Coalition in a period of economic contraction compared with the earlier period of economic prosperity available to their Labour predecessors. Is this then a sign of a new era? There has clearly been a qualitative change albeit along the lines of
renewing existing policy processes of welfare-to-work and making work pay, and this presents a gap in the knowledge base which needs to be investigated in depth. Furthermore, the Coalition Government appears to have acknowledged that the ‘intelligent solutions’ they have been enforcing are not to counteract an entirely new phenomenon, but are instead to prevent the further deepening of a cultural rhetoric which has become entrenched within both the social and economic nodes of the daily lives of UK citizens. Henceforth, cutting benefits would act as the incentive to push people currently unemployed back into the system from which they had previously become excluded, as well as retaining those already there through a “work first” welfare policy mantra (McCollum, 2012:225). In a similar fashion, the government has also begun to cut back tax credits, and in particular have begun to implicate the “squeezed middle” of UK society (Pearce, 2011:4). However, as can be seen in Figure 7, contrary to government suggestions that working tax credits have been over-generous to such groups, juxtaposed with the spiralling cost of living, it has been contended that their welfare-to-work agenda is pushing more and more people into relative and even absolute poverty (Pearce, 2011; see also the JRF ‘Monitoring Poverty and Social Exclusion Report, 2011’).
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Chapter Theme Indicator
Change in last decade Change in last 5 years Low Income Low income
Child poverty Better No
change
Pensioner poverty Better Better
Working-age adults with children poverty rate No change Worse Working-age adults without children poverty rate Worse Worse Proportion of population in deep poverty (40% of median) Worse Worse
Inequality Income inequality
50:10 Worse Worse Benefits and tax credits Children needing tax credits to escape low income Worse Worse Number of people receiving out-of- work benefits Worse Worse Spending and debt Material deprivation Worse
Figure 7: Change in poverty indicators over time in the UK up to 2010 (Source: Joseph Rowntree Foundation, 2011).
The government has maintained that their renewed workfarist vision to ‘make work pay’ is the optimal way forward for the UK in order to preserve its competitiveness and flexibility within the global economy, even if this means harming its social base as well as undergoing “a dramatic change in the relationship of the state with its citizens” in the short term (Grimshaw and Rubery, 2012:107). Whilst this could be portrayed as a significant break from political rhetoric of the past, it is more likely that it is simply a re-orientation of the status quo, although in a far more stringent and
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relentless form. The sum implication of these processes has been that the latest recession has seen a return to the scenario of extreme measures of austerity, which has not just had dire connotations for those on the bottom rung of the socio-
economic ladder (Taylor-Gooby, 2012a), but has also served to polarise the labour market further as people are pushed back towards the poverty threshold (Andre et al., 2013).
With no end to the economic turmoil in sight, and with many states still treading the line of an obscure and precarious existence, the Coalition has argued, with
significant support from classic neoliberal institutions such as the World Bank and IMF, that the sooner the debt and public expenditure is scaled back to more manageable levels the better (see Figure 8).
40.8 11.5 52.3 0 10 20 30 40 50 60
Central Local Total
£bn