We are living through tumultuous times, with political upheaval feeling increasingly endemic, fuelling anxiety and uncertainty. Perhaps it is comforting to think that we are not the first to experience this. The economic historian Carlotta Perez studies the links between technology and social change and argues that each major technological breakthrough creates a period of crisis as society adjusts. She describes three phases in this process. It starts with excitement, before moving into recession, widening inequality, social unrest and the rise of populist leaders. Finally, new social norms emerge and new institutions are developed to match the enormous economic and social changes which have swept through.
The 1920s and 1930s were one such period, with the stability and deference of the Edwardian age breaking down and the industrial revolution driving new forms of organisation, new power structures and new social problems which the state simply could not cope with. This was the environment in which William Beveridge developed his ideas for a new Welfare State, published in a report eighty years ago this November. He laid down the basis on which our social security system, National Health Service, public services and education system were built. Those institutions have proved remarkably resilient, but they were designed for the industrial period and are straining to meet the challenges of our newly emerging digital, low-carbon era.
Giants, A New Beveridge Report is a series marking the 80th anniversary of the original Beveridge report. It takes a fresh look at the five ‘giants’ which Beveridge believed must be defeated to allow social and economic progress: Want, Idleness, Squalor, Disease and Ignorance. The first book in the series, Want, takes a broad look at modern day poverty, identifying who is trapped in hardship today, and why this giant is alive and well in the UK. The book draws together the themes of the series, demonstrating the ways that our labour and housing markets hold people back, why the old industrial public services need reimagining and how poor health, mismatched skills, racism and sexism all conspire to grind people down.
Who is trapped ‘in want’ has changed markedly over the last eighty years … Disabled people and their families make up half of all those in poverty in the UK
The picture of who is trapped ‘in want’ has changed markedly over the last eighty years. The majority of those in poverty today live in ‘working households’. The central problem in our labour market is no longer unemployment, but poor-quality work – low paid, insecure, with little training and few prospects for progression. Families with children, usually with at least one parent in work, have seen rising poverty rates and deeper hardship in recent years. Parents are hemmed in by poor quality jobs, high rents, inadequate childcare and transport and with little access to useful training. Disabled people and their families make up half of all those in poverty in the UK, but are continually overlooked, despite low incomes and high costs creating appalling hardship and suffering.
The massive fall in poverty among pensioners is a public policy achievement we can be proud of, but their poverty rate is rising again. And the future is looking increasingly bleak with trends in health, ageing, housing and saving that are likely to pull more and more pensioners into poverty in future decades. As we teeter on the brink of another recession, we should be particularly worried about our young people, especially those from Black, Pakistani and Bangladeshi backgrounds, who tend to be hit hardest by recessions and face worse and longer ‘scarring’ effects than other groups.
The essence of what constitutes a decent life in which we are not trapped ‘in want’ has remained remarkably stable across history and geography: a secure, healthy home; steady, rewarding work; giving our children a good start in life, and the skills to thrive; as well as good mental and physical health and care when we need it. Alongside these material conditions, respect, dignity and feeling part of society are equally important. People trapped in poverty speak passionately about the humiliation and fear they face, the sense of being despised and excluded.
Our public services are not designed to meet these new challenges
These goals may have not changed, but the barriers we face to achieving them have, and our public services are not designed to meet these new challenges. Our education system is pretty good at ensuring most people are literate and numerate and it includes world-class higher education institutions. But it’s terrible at enabling adults to skill up and reskill as old jobs disappear, and new career paths open up.
The NHS is fantastic at preventing illness by mass immunisations and fixing broken legs; but the bulk of today’s health problems are chronic physical conditions such as diabetes or mental health difficulties such as depression and anxiety.
Employment services work efficiently to move healthy people, able to work full time without many caring duties, into jobs speedily. But they are far less effective at helping those already in work to access better quality jobs or higher pay. Nor are most very good at supporting disabled people, carers or single parents to find decent work with the right flexibility or helping employers redesign jobs to open them up to the growing proportion of the workforce who need some form of flex.
Our approaches to regulating markets and taxation are out of date. Well-regulated market capitalisation and active government redistribution have led to enormous rises in living standards and reductions in poverty over the last two centuries. But the heart of market capitalism is the idea of the active consumer, with the market organising itself to meet the needs of the consumer and companies innovating to get an edge over the competition – improving services or reducing costs.
Traditional regulation has two goals. First, ensure consumers can make well-informed choices and businesses can’t get an edge by falling below agreed standards of health and safety or exploiting workers. Second, prevent monopolies where companies dominate such a big share of a market that they can inflate prices or cut standards because consumers don’t have alternatives. But in a digital economy, consumers are disempowered. Companies can manipulate the prices they see and the products they are offered. And global tech giants don’t confine themselves to a single market or wait for competitors to grow before gobbling them up. Their power lies in the data they harvest from users and the networks they control.
The UK’s taxation system also need updating. It has helped to distort both the labour and housing markets, leading to higher poverty. It has become increasingly concentrated on taxing earnings and general consumption (through VAT), shifting away from taxing other forms of income or specific goods (like fuel or alcohol). So far it has also utterly failed to tax wealth effectively, undermining public finances and fuelling inequality. And we have only very recently started to see steps towards international cooperation to allow proper taxation of global corporations.
The book charts a course towards a new settlement. It argues for a reimaging of work, a new generation of public services, a re-establishment of social security and modernisation of our approach to regulating consumer markets and taxing wealth.
Poverty is about power
Underpinning this prospectus is a simple truth: Poverty is about power. The least powerful workers can’t avoid jobs that trap them in poverty. The poorest consumers can’t get the best prices. Those without economic and social power are reliant on public services that treat them at best as children or at worst as cogs in the machine. Prejudice and discrimination leave disabled people, some Black and minority ethnic groups, and women with even fewer options and less leverage to change their situation.
The industrial welfare state proposed by Beveridge represented an immense step forward from the patchwork that existed before the second world war. But he was still the product of the age of deference, and the institutions he designed baked in the morals and assumptions of that generation. Class distinctions were firmly in place, backed by moral judgement. They assumed that those in power should determine what the lower classes should have, how they should behave and how their weaknesses should be corrected. They assumed dependence: of women on men, disabled people on others, older people on younger and workers on bosses.
We have to design institutions which shift power
As we come to terms with the current technological shift, and its accompanying political, social and economic instability, we have to design institutions which shift power. Rebalance digital markets to empower consumers. Rebalance labour markets to offer better jobs and careers paths for workers. Rebalance the housing market to create stable homes. Rebalance our tax system to tap into wealth and revive fairness. Rebalance our public services to put users in the driving seat and relationships at their heart. Only by grasping this nettle can we create the new social norms and structures to bring us past crisis and into calmer waters.
Drawn from Helen Barnard’s book, Want, with Agenda Publishing.
Helen Barnard is Associate Director of the Joseph Rowntree Foundation (JRF) and Director of Research and Policy at Pro Bono Economics. Helen is a leading national expert on poverty, inequality and social policy. Her extensive body of written work and regular media contributions have covered poverty, destitution, labour markets, housing and social security. Helen is a Social Metrics Commissioner and member of the Poverty Strategy Commission. She is also a trustee of the National Centre for Social Research.
Header Image Credit: Agenda Publishing
TO CITE THIS ARTICLE:
Barnard, Helen 2022. ‘Want’ Discover Society: New Series 2 (3): https://doi.org/10.51428/dsoc.2022.03.0002