That is the bleak message of Professor Sir Michael Marmot in his major new report on health inequality. Entitled ‘Health Equity in England: the Marmot Review 10 Years On’, it assesses lack of progress in the last decade, since his review in 2010 entitled ‘Fair Society, Healthy Lives’.
He writes:
Since 2010 life expectancy has stalled: this has not happened since at least 1900. If health has stopped improving it is a sign that society has stopped improving.
This damage to health has been largely unnecessary.
Health is closely linked to the conditions in which people are born, live, work and age, and inequities in power, money and resources.
He repeats the well-understood expectation that, “The more deprived the area, the shorter the life expectancy”, but finds that inequalities in life expectancy have increased. “Among women in the most deprived areas, life expectancy fell between 2010/12 and 2016-18.” For both men and women, he continues, the largest decreases in life expectancy were seen in the most deprived 10% of neighbourhoods in the North-East, and the largest increases in the least deprived 10% of neighbourhoods in London.
He notes that widespread and deep funding cuts have been made in the last ten years in most areas of public spending, Government spending as a percentage of GDP declined by 7 percentage points between 2009/10 and 2018/19, from 42% to 35%, and cuts in local authority spending have been “hugely significant. Spending on social protection and education, both vital for health, have declined the most – by 1.5% of GDP.”
But it is not just the impact of overall cuts: it is how and where they have fallen that has impacted most on inequalities. The cuts over the period have been regressive and inequitable – they have been greatest in areas where need is highest and conditions generally worse. It is likely that the cuts have harmed health and contributed to widening health inequalities.
The original Marmot review considered several areas relating to healthy living which the new report revisits to see if there have been improvements. Aims stated included that every child should be given the best possible start in life, that everyone should be able to have a healthy standard of living, and that everyone should be able to maximise their capabilities and have control over their lives. There should be fair employment and good work for all. The new report also gives a stronger focus to regional inequalities, and a greater emphasis is placed on poverty. noting that the poorest people will require more investment and support over the next decade just to get them back to where they were in 2010.
For none of these areas does Sir Michael appear to feel satisfaction. He notes that the number of families with children who do not reach the minimum income standard has mounted, as have the rates of child poverty since 2010, with over four million children affected. Seeming to echo the UN Rapporteur Philip Alston’s April 2019 report, he cites the implementation of Universal Credit having pushed many people further into poverty and debt. On employment, he states that though employment rates have increased since 2010, there has also been an increase in poor quality work including part-time insecure employment, and that in-work poverty rates and stress caused by work have all mounted.
Although taking some comfort from the present government’s new commitments to spending, he concludes that the governments in the past decade have not prioritised health inequalities, sets out a clear agenda as to how they must be tackled, and calls on the government to take action on this as a matter of urgency.
Liberal Democrats must surely embrace this report’s analysis and conclusions, and demand the appropriate response from the present government, as part of an on-going campaign for social justice and a new social contract to be accepted between government and people.
* Katharine Pindar is a long-standing member of the Lib Dems and an activist in the West Cumbrian constituency of Copeland and Workington.
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193 Comments
A well informed evidence based post by Katharine.
It really is time that this party gave serious consideration to the questions of inequality and poverty…… and to the sustained attack on local government’s ability to deal with these issues at a local level.
Come on Social Liberal Forum. Time to focus on this challenge for a fairer more just society where every individual is valued.
Thanks, David. I was just reading earlier how Lisa Nandy, the Labour leadership contender, has been focusing on WEALTH inequality. We also care about this. But if our party focuses first on HEALTH inequality, Sir Michael shows how many social and economic threads tie into that. His review considers the aims of children having a good start in life, of how healthy living should be available for all, how everyone should be able to have personal fulfilment and control of their lives, and how there should be fair and good employment for all who want it. And of course how poverty rising still further must be prevented, and regional imbalances redressed. In short, health inequality affects the whole of our society and its rise does indeed indicate a sickness that must surely be addressed by a progressive party.
And thank you, Katharine.
And what more appropriate place than York for the Liberal Democrat Party to rediscover its interest in poverty and inequality……. for it was in York in 1902 that Seebohm Rowntree researched and published his seminal study on Poverty.
There’s a great and timely opportunity at the approaching Conference for the Lib Dems (and Social Liberal Forum) to highlight what has become a growing and returning problem over the last ten years.
This is depressing reading for all Liberal Democrats as the health downturn started during the early years of the coalition government. The party should have done a press release on this subject, but I am not aware of one. I don’t recall our 2019 manifesto saying anything about reversing the cuts to local government especially the cuts to social protection.
It is clear that being poor effects a person’s life chances, overall health and life expectancy. We don’t have any clear aims on reducing poverty. We don’t have any aim to increase benefit levels to remove people out of poverty either those in work or both those in work and not in work. My suggestion to end relative poverty in 15 years was rejected. (Also last year in preparation for our conference I raised the issue of what we think the National Minimum Wage should be, but was told we don’t have a view and there were no plans on us taking a view! Increasing this is part of solution to ending in work poverty.)
On employment the report sets three priority objectives:
Improve access to good jobs and reduce long-term unemployment;
Make it easier for disadvantaged people to obtain and keep work; and
Improve the quality of jobs.
I don’t recall our 2019 manifesto having policies to achieve any of these three things.
David Raw,
I don’t believe the party will grasp the opportunity of having our Spring Conference at York to discuss and agree a response to this report and pass new policies to reduce poverty and inequality. The deadline for drafting advice on emergency motions has past.
I can only agree with what has been expressed here. This would have been a golden opportunity to focus on poverty in our society. We need to focus on a healthy society, rather than simply trying to pick up the pieces when people become very ill.
At the moment it is simply going to get worse.
Older people disproportionately voted for Brexit and for the Tories, so what did they expect?
“As you sow, so shall you reap.”
My local Lib Dem controlled council is just about to make it very difficult for a hospital in Bath to function. But nobody listens to me, s o I will just sit back now and watch them making a huge mistake. They are virtue signalling and without any common sense.
Fred Orme – I didn’t vote disproportionately for Brexit and I am older.
@Fred Orme
I too am older and didn’t vote for brexit.
And also – if you are going to keep posting on this forum about the hospital in Bath it would be helpful if you explained briefly what you see as the problem instead of just moaning. Please!
Someone once said; “You are what you eat”. (Or, could it have actually been me?). Growing up during and just after the Second World War, I and my generation had the benefit of a basic, but balanced diet, thanks to the Ministry of Food, austerity and the rationing of such delicious but deadly luxury items such as sweets. I was one of the first to have the vaccine against diphtheria and remember those government bottles of concentrated orange juice and the daily spoonful of cod liver oil when I started school.
Don’t get me wrong. It was no golden age. The dreaded ‘infantile paralysis’ stalked stagnant pools which our mums told us to avoid. Two young mums on the new Council estate where I spent some of my early years died of TB. Sanatoria were full of victims and treatment for diseases such as cancer was fairly primitive, while the diagnosis of childhood leukaemia usually meant a death sentence.
We ate a load of fat, white bread (pigs trotters were an added delicacy at our local chip pie); but we walked and cycled nearly everywhere. Two household owned a car on our estate up to the mid 1950s. No wonder, thanks to the improvements in medicine and nutrition we started living longer. No wonder that final salary pension schemes, predicated on the actuarial fact that most blokes didn’t last that long after retirement eventually became unviable for many firms and organisations.
Now we are told that our life expectancy has plateaued. Yes, I’m sure that austerity has a lot to do with it; but look at what many of use eat and how much alcohol many of use, particularly the young consume. Do we take the amount of subconscious exercise we were forced to in the past? Of course we don’t. People in their thirties are showing signs of heart disease and liver damage. Quite frankly, I’m not surprised. Blame it on austerity if you want, but think about whether you should have the rest of the bottle of wine or that extra helping of chips. Why not walk to the newsagents , instead of firing up you 4×4?
Lots of countries didn’t vote for Brexit. Was it austerity?
“Five of the largest EU countries — France, Germany, Italy, Poland and Spain — saw a fall in life expectancy for men and women between 2014 and 2015, suggesting the phenomenon is not unique to the UK and the austerity we’ve seen since 2010.”
https://www.channel4.com/news/factcheck/factcheck-is-austerity-reducing-life-expectancy
Is life expectancy actually falling at all?
https://iea.org.uk/no-life-expectancy-is-not-falling/
Apart from hearing about particular problems in Bath, would some members like to consider whether the new Marmot Review is something that should be studied and potentially endorsed by our party? After all, if society has indeed stopped improving because the nation’s health and welfare has stopped improving, this is surely as serious a problem as any that should be considered urgently and with commitment by our party. Michael says our policies don’t go far enough. I agree, but to bring them out, fit them into an overarching theme for the party – how to improve the nation’s health and well-being through enhanced commitment at governmental as well at local level – is surely central to our own and ultimately the nation’s progress. We have a forum very soon for our live debates.
Living longer and healthier doesn’t depend on your political stance. It’s largely up to you and the choices you make. However, any government can nudge you in the right direction and most claim to do so; but human nature dictates that some will take advice. However the young in particular think they are going to live forever, so why not go on a binge a couple of nights a week, making sure that you ‘preload’ on cheap supermarket booze first before you hit downtown?
As Oscar Wilde famously said; “I can resist everything except temptation”. Who wouldn’t die for a bacon sandwich – but perhaps not every day? And as for a G and T?
John Marriot
It actually largely depends on a mixture of genetics and environment. Stress, over work, nightshifts, damp, depression, can also be factors, plus things like living alone can make the difference between life saving emergency medical intervention and an early death. Even testosterone levels and male pattern baldness often indicate future heart problems. I do find it interesting that wealthy and privileged people who also are known to have indulged themselves in all kinds of unhealthy behaviour don’t seem to die a early as their poorer peers.
Kate Pickett and Richard Wilkinson published The Spirit Level: Why More Equal Societies Almost Always Do Better in 2009. The book highlights the “pernicious effects that inequality has on societies: eroding trust, increasing anxiety and illness, (and) encouraging excessive consumption”. It shows that for each of eleven different health and social problems: physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being, outcomes are significantly worse in more unequal rich countries.
The Equality Trust (established by the authors) and Child Poverty Action Group work together as Co-Secretariat of the All Party Parliamentary Group on Poverty.
The Equality Trust website includes a great deal of background. On economic growth they write https://www.equalitytrust.org.uk/equality-not-unequal-growth
“We are at a turning point in human history. For centuries the best way of improving the quality of life has been to raise material living standards. But we have now come to the end of what economic growth can do for developed countries. Measures of well-being or of happiness no longer rise with economic growth. Even though health goes on improving in rich countries, that improvement is no longer related to economic growth. We also know that rates of depression and anxiety have risen over the last fifty years or so.”
“Not only has economic growth in the rich countries ceased to bring the social benefits it once brought (and continues to bring in poorer countries), but it now threatens the planet. We are therefore the first generation to have to find new ways of improving the real quality of life. The evidence suggests that we need to shift our attention away from increasing material wealth, to the social environment and the quality of social relations in our societies. For rich countries to get even richer makes little or no difference to the prevalence of health and social problems but, as other pages of this web site make clear, the social problems which beset many rich societies are much more common in more unequal societies. Societies with smaller income differences between rich and poor are more cohesive: community life is stronger, levels of trust are higher and there is less violence. The vast majority of the population seem to benefit from greater equality.”
John Peters. Thank you for those very interesting references, John. I will leave the argument on the figures about life expectancy to others, being content myself with the scholarship of this weighty report. But on the discussion of the effects of austerity on the fall in life expectancy, so ably recorded in the Channel 4 factcheck, I would point out that the professor considers all the factors relating to healthy living in considerable detail, and says only, in the executive summary that it have, “It is likely that the cuts have harmed health and contributed to widening health inequalities.”
Were our party to take up the report, I am sure it would be to consider its wider scope,
the overall picture it gives of a society providing too little support for the health and welfare of its citizens, and particularly letting the poorest and most disadvantaged of them sink further into life-curtailing difficulties.
John Marriott. Thank you for your reflections, John. I am still pondering what that ‘subconscious exercise’ that we used to take could have consisted of, but I enjoyed your reminiscences!
Thank you for your excellent post Katharine. I can’t attend conference but I understand that representatives from Northern areas are getting together to discuss common objectives. Maybe the issue of poverty and it’s ramifications could be discussed there? I realise that it’s a widespread problem but life expectancy for women in the NE has declined and in the NW we have a problem with education in poorer areas. If we could get several regions to agree that the party as a whole doesn’t take these issues seriously then that argument would have some clout.
I really don’t understand why there is this reluctance to attack poverty, unless it is that criticisms of our Coalition years will undoubtedly be made by Labour activists. Well, trying to do something to alleviate measures taken in the last economic depression would be acknowledging our mistakes and making sure something positive comes out of them. It seems that a Fairer Share for All didn’t really hack it so we need to campaign for the party to be as loud about poverty as we were about Brexit.
Perhaps health is affected by internal factors such as heredity and external factors such as environments?
If so, might it be appropriate for us to have policies, practices and metrics to improve our several health environments?
Might two environments to prioritise be wealth and education?
Is it coincidence or correlation that health and life expectancy polarise as the distribution of wealth does?
Might the present plague persuade the wealth powerful and their associates and servants to improve the public health of all as it seems that gated communities are not immune from it?
P.S. The relevant books on equality by Pickett and Wilkinson are indeed excellent!
Has anyone at HQ read either or both?
@Katharine Pindar
‘Subconscious exercise’? Simples. Not being driven to the school gates. Instead, cycling four miles into town, or walking to the bus stop and then walking a mile every day from the centre of town to my secondary school. Even Pre 11 plus, saving the penny bus fare by walking a couple of miles to my primary schools (until they built one nearer to home. You could get a lot of sweets for an old penny back then and you’d soon burn off the calories. Not much sitting in front of the TV. Until 1955 we had only one channel and that was mainly only on at night. No lying on the beach on the Costa del Sol or jetting off to Disneyland. For me in my teens it was pedalling around the country on my racing bike with some school mates courtesy of the YHA.
@ Glenn
Quite a few “wealthy and privileged people” die relatively young, you know. It really does often depend upon the genes. The point that I have been trying to make is that it’s largely our sedentary life style coupled with overindulgence (how many cookery programmes can we possibly watch?) that is partly causing some of us to succumb to medical conditions that we thought had been largely eradicated. Let’s not forget environmental pollution as well.
‘Even thought health goes on improving in rich countries’, Joe? (Joe Bourke, quoting the Equality Trust at 1.28 pm today.) Apparently not any longer in this rich country, Joe, though thank you for telling us about the Trust and the parliamentary group to which one hopes some Lib Dem lord will belong. The sad fact seems to be that we live in a sick society getting sicker, and that the governments of the last ten years have enabled this. Therefore our party, which didn’t manage enough in its junior role in Coalition to prevent the worsening situation, has a duty now to indeed do better.
This important Marmot Review shows us the way: focus on Health Inequality, because it covers in its real meaning all the societal needs we care about. Such as children given the start in life they need. not disrupted with parents having to move from one inadequate rented home to another; young people with good properly funded education and leisure facilities and hope for adequate training, jobs and homes in future; families with such irregular employment that even though they work all the hours there are in several obs they still fall foul of the benefits system and have to use the food banks; people stuck at home with illness or disabilities, dreading the sudden extra bill for repairs because they only ever have just enough; older people fearing the day when they will need social care which everyone knows is insufficient … so much need, and worry, and real misery: and this government which just hasn’t bothered about them.
Sue Sutherland. Thanks, Sue, that’s a great idea – ” campaign for the party to be as loud about poverty as we were about Brexit.” Yes indeed. And this splendid Review shows how the needs are interlinked, poverty and health inequality. How can we claim we have a healthy society if four million children live in poverty, and poverty is rising all the time?
You are right, too, to draw together the particular needs of the north-east, which the Review clearly brings out, and different inadequacies that need dealing with in the north-west. I hope the pre-conference meeting of the northern parties will be fruitful. Still, the London Lib Dems can point out again the deep poverty in areas of the capital, to show the continuing need for a country-wide approach, which you would not dispute.
Steve Trevethan. I love your blue-sky thinking, Steve. As you suggest, the ‘plague’ at their gates ought really to concentrate the minds of the wealthy on general public health needs, and how societal health is important for everyone. As for Pickett and Wilkinson, I felt grateful to Joe for reminding us of their books; I think I wrote something about ‘The Spirit Level’ here on LDV, and then heard the authors give a lecture in my local town of Keswick on the sequel, but it was the first that made the stir.
@Katharine
You have been making similar comments for a year.
In the leadership campaign both Ed and Jo ignored you, and it was not included in Jo’s one horse trick policy.
Since the election our leaders have ignored the issue, and the conference is so tied by tradition that nothing will happen there.
However we will have a keynote speech by a failed leader and a web site promoting Vince, Jo and Brexit flag wavers with requests for cash.
So we must be doing something right!!!!
Almost true, David B. Actually much the same comments since I read Philip Alston’s devastating Statement in November 2018. And yes, these comments have been ignored by the leadership, and doom and gloom may prevail generally in the party at large now, locally as well as nationally.
But there is one significant difference this spring. The Brexit fight is lost. That leaves the party without its breastplate of purpose. But hey! There’s still a big enemy to fight, the intentions of the Johnson government. There’s still the big song to sing, ‘ I will not cease from mental fight, nor shall the sword sleep in my hand…’ What sword should we be sharpening? Well of course, choosing one clear strong aim that people will come to know us by. And determination to fight poverty and health inequality – to put the health and welfare of our failing society FIRST – what better aim could our leadership imagine?
John Peters,
According to Wikipedia France had austerity until 2012, Germany in 2011, Italy until 2012 and Spain until 2014. I understand that Poland had austerity later ending after the 2015 elections.
The Marmot report does not claim life expectancy has fallen. It states the increase has slowed down and that in the most deprived 10% of neighbourhoods in the regions of the North East, Yorkshire and the Humber and the East of England life expectancy for men has decreased. And for women only in London, the West Midlands and the North West has life expectancy for women in the most deprived 10% of neighbourhoods not fallen. This is while life expectancy for both men and women has increased for the least deprived 10% of neighbourhoods in every region (page 13).
Joe Bourke,
I am not sure that Pickett’s and Wilkinson’s book ‘The Spirit Level: Why More Equal Societies Almost Always Do Better’ has useful conclusions with the relationship between poor health and the most deprived areas. It still is the case that if you live in one of the most deprived areas of a region your health will be worse than if you lived in one of the least deprived areas.
Sue Sutherland,
I agree, “a Fairer Share for All didn’t really hack it”. We need to put pressure on members of FPC to actually endorse a policy paper on poverty which will remove everyone out of relative poverty within a stated time period. We have long term time frames for our environmental policies so we could have them on poverty as well.
David Beckett,
Katharine has not been a lone voice on the importance of tackling poverty and economic inequalities. You are correct both Jo and Ed ignored the issues in their leadership campaigns. You could join Katharine and others and keep raising these issues. The more people who do, the more likely it is that some future leadership candidates will address the issues in their leadership campaigns.
All this worthy pontificating about why we have, according to some, stopped living longer. Well, here is my take, minus the anecdotes.
Life expectancy rose massively over the last century, helped by better nutrition (initially for some) but more lively due to our better understanding of public hygiene and advances in medicine. Those people who grew up in the interwar years had to be tough to survive, so, by the time public health and medical advances kicked in, they were in a unique position to benefit.
My post war generation started out with an austerity diet, which combined with what I called ‘subconscious exercise’ (meaning we were walking and cycling as a necessity and not as a means of getting fit, Katharine), together with what I previously mentioned, as the advert said, “Did us proud”. However, not all of us have made it to old age. Sadly, not all human bodies are the same. That’s why we need medicine.
Now, what has changed today is that that what we like to call “Thatcher’s children” have grown up in an age of increasingly processed and delicious and deadly food, the easy access to which in our busy lives fuels the profits of big business, puts on the pounds and, you know the rest. Add to that the cheapness and desirability of alcohol in increasingly large amounts, which, unfortunately my generation appears to treat as a right for living so long, and you are building up a scenario where many of the causes of death, and particularly at a younger age, are self inflicted.
John Marriot
I get your point, but I strongly suspect that had say the Rolling working in factories in the 1960s to 1970s they wouldn’t have made it past their 50s and 60s. As it is the only dead one drowned and that doesn’t count. The reason I mentioned nightshifts is that they are very bad for health. Where you live and what you do count. We putting the retirement age up even though we know that improved medical treatment is a bigger factor than improved health. For instance my Dad died in is 80s and was on mountains of medication for the same health issues that killed my grandfather aged 61 years old. The difference isn’t better health, but better health care.
The point people are missing here, is that in countries where people are dying far too young medical and environmental improvements have a dramatic effect on mortality. Once populations start getting past the three score years and ten mark more normally the effect looks less dramatic and is less an indication of improved health than it is of improved medical intervention. In the 1960s ambulances basically just took people to hospital and their crews had little more than first aid skills. They’re now well equipped mobile medical units with highly trained medical staff. As people age fault lines in cell structures multiply leading to increased instances of organ failure and things like cancer. Environment and behaviour (not just things like drinking or smoking, but your job and home life) do impact on it, but even a fit 70 year old is less able to withstand illness and injury and is more prone to serious medical conditions like blocked arteries, heart failure, and so on. Plus poorer eyesight, loss of strength, hearing problems and general slowing down. Aging and dying are not choices they’re an interlinked on going process that can be managed but not stopped.
@ Michael BG,
“According to Wikipedia France had austerity until 2012, Germany in 2011, Italy until 2012 and Spain until 2014. I understand that Poland had austerity…….”
With all due respect to Wikipedia this statement is (expletive describing round spherical objects deleted by edit team)!
Austerity won’t be eliminated from the eurozone until they scrap the silly rules of the so-called Stability and Growth Pact. The big problem is the 3% limit on Government deficits. If there is lots of export money coming into the country then 3% can be too high. Govt should aim for a tighter fiscal policy to control inflation.
More usually it is too low. Govts should aim for a more relaxed fiscal stance tp promote economic growth.
Of course it’s complicated…. but if anybody thinks austerity – and the increasing poverty, stress and malnutrition that goes with it, has no impact on longevity then they haven’t read the Alston Report and the Marmot Report or they’re kidding themselves.
Lib Dems should read both reports and respond to them. At the moment the silence is deafening.
Dear editorial team,
If it’s OK to say “B*ll*cks to Brexit” why is there a problem with the word generally?
Peter Martin
“If it’s OK to say “B*ll*cks to Brexit” why is there a problem with the word generally?”
Because it’s usually used as an insult.
So everything is all right, really, John Marriott and Glenn – given our luxurious style of living, and given that medical and environmental conditions in our advanced societies keep us going but can’t cause leaps forward in longevity, there’s nothing for concerned politicians to worry about. That’s not the conclusion of Professor Sir Michael Marmot, and I believe him. He says health in our society has stopped improving since 2010, and it shouldn’t have. I quote him again – “This damage to health has been largely unnecessary.” And I suggest again, it’s the duty of our party since we were involved in government in the first five of those ten years to read this Review respectfully, and resolve to assess his conclusions and campaign on them. We missed the opportunity of the devastating Alston Statement of November ’18 and his following Report and recommendations of April ’19, and now we have the chance to make amends by following Marmot’s conclusions with his demands for improvements.
The Review proposals are intended ‘ to reduce socio-economic inequalities in length of life and health’, and ‘to reduce regional inequalities in health, improving the health of people living in deprived areas – particularly those outside affluent areas in London and the South.’ Essential components will include: ‘Develop a national strategy for action on the social determinants of health with the aim of reducing inequalities in health.’ and ‘Ensure proportionate universal allocation of resources and implementation of policies.’ There is much more which I will cover in a later comment.
Katharine Pindar
I don’t agree with John Marriot. The point I was about making aging is that it can be a mistake to equate improved longevity with improved health. I’d like to see the retirement age going back down for this reason. I think North/South divide is more down to infrastructure and spending than lifestyle. I go to London a lot. I see just as many, in truth far more, fast food places as anywhere else, pubs just as full, just as many smokers, more homeless people and so on. So I don’t buy into the idea that Londoners are healthier or that its population is really much wealthier. What I do see is far superior infra structure and more government spending. Another point to make is that even things as seemingly insignificant as levels of dental treatment impacts on mortality and so the cuts to access for free dentists do not just lead to tooth loss.
Austerity certainly does add to the disparity in health results, but the spending has been incredibly unequal for decades.
@Katharine Pindar
When and where did I say that everything was “all right”? You can take a political view on why we aren’t continuing to live longer if you like; but I am saying that, to some extent, this phenomenon is of our own making. The human body was designed to last a specific period of time. I know to my cost that joints wear out and tissue ages. Do I want to live to over a century? That depends on what kind of quality of life I can expect.
There is no doubt that poverty has an effect on longevity. Clearly a level playing field would be something worth aiming for. However, it is still up to individuals to make their choice. If you still want to smoke over 50 fags per day, drink ten pints of beer a night and live off takeaways and other junk food, then you can expect your general health to suffer. Admittedly some people may get away with it, just as some teetotallers and vegetarians etc can still suffer an early death. That’s the nature of things. No one rule fits everyone.
I am sure that Professor Marmot has a point; but, as someone asked not that long ago, should we always take it as gospel what ‘experts’ tell us?
So Marmot demands that a national health inequalities strategy be established, which he says is an essential first step to reducing health inequalities. He wants fair allocation of increased resources, with more going to areas of need, the greatest need being in the North. He seeks again intervention in economic and social areas contributing to health outcomes, including giving every child the best possible start in life, enabling everyone to fulfil their capabilities and have control over their lives, to live in healthy and sustainable places and communities, to have a healthy standard of living and have the chance of fair employment.
He also wants the public to be informed about such social determinants of health, so that government can no longer get away with underfunding and overlooking necessary action on the social front. (I suspect everyone must agree that all this sounds rather like a Liberal Democrat programme. Add in housing and I think we could buy into it!)
Glenn, thank you for writing again. I agree that there is much in what you say, and I did see that you were making different points from those of our friend John Marriot.
Current Libdem policy aimed at improvements in welfare provision include:
Reversing the cuts to Universal Credit;
Abolishing the Bedroom Tax;
Scrapping the two-child limit on benefits;
Scrapping sanctions;
Increasing benefit payments in line with CPI, with a longer-term aspiration to tie increases in benefits rates (apart from housing benefit) to increases in median earnings;
Scrapping the benefits cap;
Increasing Local Housing Allowance in line with local rents;
Increase the minimum wages for young workers up to the same as the minimum wage for older workers; increase the rates of JSA and UC for those aged 18 – 24 in line with increases in minimum and apprentice wage rates for that age group;
When personal Income Tax or National Insurance allowances rise, increase work allowances by the same amount so that poorer people don’t lose out on the benefit of tax cuts;
Separating employment support from the administration of benefits, through devolution of powers to local authorities;
Supporting claimants living in areas with poor transport links, and those who are unable to travel for other reasons, through increased use of mobile Jobcentre surgeries and home visits.
With London Mayoral and Assembly elections approaching it is worth remembering that the greatest number of people living in poverty in the UK live in London https://data.london.gov.uk/blog/poverty-in-london-2017-18/
“The total number of Londoners living in poverty…now stands at around 2.4 million people. This means 28 per cent of everyone living in the region are in poverty, averaged over three years 2015/16-2017/18.
The poverty level for 2017/18 equates, for a couple with no children, to around £262 per week, counting all income and deducting taxes and basic housing costs.
The poverty level in London has changed little over the two decades that these data have been collected, only varying between 27 and 30 per cent and now stands at 28 per cent, marginally higher than in the years immediately following the recession. The rate in London has been consistently higher than in any other region or part of the UK. It is now six percentage points above the national figure, four percentage points higher than any other region, and ten percentage points above the lowest rate (Northern Ireland). Poverty levels in Inner London remain significantly higher, at 32 per cent, while the Outer London rate has generally been only a little higher than elsewhere and stands at 25 per cent.”
@Joe Bourke
Basically then every policy the lib dems voted through while in coalition.
Talk about hypocrisy
It’s depressing seeing the usual suspects coming out to deny the continuing effects of austerity.
Joe Bourke: you can see, Joe, that the Marmot demands are about more than welfare provision. His demand for a National Health Inequality Strategy (my initial caps) is for him only the essential first step to what would be major socio-economic reforms. His breadth of thinking on what is really involved in the health of the voters (so much more than ‘public health’ conveys) is comparable with the breadth of thinking some of us are putting into our idea of a new national Social Contract. To campaign on making a first aim Opposing Poverty and Health Inequality would fall within the aims of the Social Contract overarching idea, could be nearly as comprehensive, but might be more readily understood by the voters. It is an interesting point in the Marmot Review that the public need to be involved in all this, having very often a quite narrow idea of health.
Malc Poll. There is no hypocrisy here. As I have indicated myself, it is the very fact that we were involved in government – albeit having only a minority of Coalition ministers – for five of the ten years on which Sir Michael is pronouncing that makes it the more essential that we should now try to put right the inadequacies and wrong policies of the decade. As we would do anyway, however, believing in the public good.
Tony Venezia. Thank you for your comment. We have to maintain constant pressure on this government to end austerity with all its miserable consequences.
Peter Martin,
I was responding to John Peters who had posted a quotation implying that France, Germany, Italy, Poland and Spain unlike the UK had no austerity. It wasn’t about why austerity was a policy in these other EU countries, which your 9.45 post of 1st March seems to be.
Glen and John Marriott,
The data in Marmot’s report is clear that over the last ten years life expectancy for the poorest in society have got worse. The report also points out that the largest cuts to local services were made in the poorest areas. The report is therefore clear that it is where a person lives and their economic situation which has a large bearing on life expectancy not their genetics. Life style choices are often worse for the poorest in society because as every liberal should know being poor reduces a person’s choices.
Joe Bourke,
I don’t know what point you were making when you set out our policies in the policy paper – ‘A Fairer Share for All’. What I do know is that the policies are inadequate. Do you know that in our 2019 manifesto we promised increasing spending on benefits by £6 billion each year which would equal £30 billion by 2024/25 but in our costing document we only had £9.43 billion for the year 2024/25 allocated to increased spending on benefits?
We should have a view on what the rate of the National Living Wage should be. We should be promising to restore the Local Housing Allowance to the 50th percentile of local rents. We should state that within a defined time period we will have increased the basic benefits levels to the relative poverty levels as defined by a reputable third party.
Malc Poll,
I think you were implying that our policies now reserve all the welfare cuts we supported in government. This is not true. I wish it was true. I worked hard to try to make the policies we passed in September do this, but I failed. There is no commitment to restore the reduction in benefit levels caused by the 1% benefit rate freeze between 2012 and 2015, there is no commitment to restore the cuts to Council Tax Benefits which leave over 2 million families on average more than £191 a year worse off and as I pointed out above restore the Local Housing Allowance to the 50th percentile of local rents as it was cut to the 30th during the Coalition years.
Michael BG – “I don’t know what point you were making when you set out our policies in the policy paper – ‘A Fairer Share for All’. What I do know is that the policies are inadequate. Do you know that in our 2019 manifesto we promised increasing spending on benefits by £6 billion each year which would equal £30 billion by 2024/25 but in our costing document we only had £9.43 billion for the year 2024/25 allocated to increased spending on benefits?” – perhaps by increasing borrowings and ditching balanced budget commitment?
And…in conclusion, a quote my old English master used to use : “Is life worth living?” “It all depends upon the liver.”
It’s been an interesting debate. Time to move on? At least, some of you will be glad to hear, it is for me.
@John Marriott – your comment about “subconscious exercise” struck a chord. Yesterday I said to my husband “I’m just going for a walk”, a statement I make quite regularly before going off for an hour or so with absolutely no idea of a destination other than eventually back home. And it struck me as I was walking – do people actually still just (as we used to say in Derry) “go out for a dander”? – i.e. “A walk with no haste or purpose undertaken entirely for pleasure”.
I am am liberal in politics, but a realist in life .
@ Micheal BG
This isn’t on the toes of “brexit , locals or whatever ”
In tue north their is a DIS-CONNECT… we up here favour Brexit! , how many more confirmations do we need !
Adapt policy according, or we are dead in the water !
In the north
Michael BG
Did you actually read what I wrote or only the bits of it that give you the wrong end of the stick to try and beat me with? I actually explicitly said austerity impacts on health!
I don’t disagree with Marmot’s report and do disagree with John Marriot.
P.S
it’s Glenn with two Ns and not Glen.
Michael BG,
the BMA undertakes an analysis of manifestos with respect to public health BMA-manifesto-comparison-grid-Nov-19 (1).pdf
“The Liberal Democrats have pledged to reinstate funding that was cut from public health budgets and join up services across public health and the NHS. They have also pledged to keep public health within local government.
Liberal Democrats pledges on public health include:
− pursuing a Health in All Policies approach, with national and local decision making
taking into account the impact on people’s mental and physical health
− restricting the marketing of junk food to children, and extending the Soft Drinks Industry Levy to include juice and milk-based drinks
− introducing a new levy on tobacco companies
to contribute to the costs of health care and smoking cessation services
− introducing minimum unit pricing for alcohol, taking note of the impact of the policy in Scotland.”
With respect to costings the IFS has undertaken a review https://www.ifs.org.uk/election/2019/article/liberal-democrat-manifesto-an-initial-reaction-from-ifs
“Additional revenues would come from £37 billion worth of tax increases including increases in income tax and corporation tax rates, a reform to capital gains tax and a very big rise in air passenger duty.”
The Fairer share for all policy paper focused on three main policy areas – reducing poverty (with a focus on Universal Credit) , improving work life balance and in particular the issue of universal childcare, and local services and regional infrastructure (with a focus on how we rebalance capital spending geographically across the UK.
The 2019 Manifesto reflected the focus o these policy areas.
Thomas,
“perhaps by increasing borrowings and ditching balanced budget commitment?”.
I am unclear on what you are saying in relation to our manifesto costings document. If the £30 billion was part funded by borrowing it would still have to appear in the extra cost column even if no covering figure appeared in the increased income column. I would have no problem with an item in the increased income column being ‘increased borrowing’ to get both sides to balance. My point was that we promised £30 billion of extra spending on benefits but in our costings document by the year 2024/25 we had only increased benefit spending by £9.43 billion.
Malc Poll,
I don’t see Brexit having any relevance to this discussion. I think the party would be wrong to campaign to re-enter the EU unless the EU was reformed.
Jon Marriott gets it right.
No one forces anyone to eat sugary foods, take no exercise, drink and smoke. Yet the combined effects of these voluntarily chosen activities costs the economy, and taxpayers, untold billions every year. 10% of the NHS budget is spent on the entirely preventable effects of Type 2 diabetes.
Reports like this cause well-meaning but naive people to excuse unforced lifestyle choices. It’s time for people to take personal responsibility for their health and wellbeing.
Joe Bourke,
I assume that you didn’t know that we promised to spend £30 billion on benefits but only had £9.43 billion in our costings document. I am not sure you have seen our costings document. It sets out £62.92 billion of extra spending and £63.82 billion of extra income (including £14.3 from the ‘Remain Bonus’).
Health and Social Care spending is only increased by £7.7 billion by 2024/25. There is no extra income from the levies you mention in the costings document.
It appears that the IFS are wrong about £37 billion coming from tax increases. According to our costings document it is £31.36 billion, with £12.46 billion coming from ‘funding committed in spending review’ (this might be we are using this money differently but it is not clear) and £5.7 billion from anti-avoidance measures and the £14.3 billion ‘Remain bonus’. Perhaps the IFS have included the £5.7 billion in their £37 billion.
With reference to our benefit spending the IFS wrote, “It would though still undo only a quarter of the discretionary cuts implemented since 2010.” They are wrong about this as well, because they say the same about the Labour Party’s £8.4 billion and the extra £1.03 billion we promised must make some difference. The correct numbers are 24.7% for the Labour Party and 27.7% for us based on the Resolution Foundations figure of £34 billion of cuts since 2010.
I thought the £50 billion Rebalancing Fund was a good idea. I expect it be less than £10 billion in the first year and more in the fifth year. I think the £50 billion is not included in £130 billion for investments over a five year period. I hope it isn’t.
Michael BG
I don’t dispute the Marmot report and I don’t agree with John Marriot. I fully accept that austerity is bad for peoples health. The point I was trying to make is that life expectancy can reflect improved medical provision rather better health. As I have said before I don’t buy into the idea it’s all about personal responsibly. I think if you makes lots of seemingly minor cuts to health provision it has a serious impact on mortality rates. If you keep dental provision, you get more things like gum disease which also weakens the heart, lower levels of spending on mental health leads to all kinds of health problems, lower levels of screening, less time with GPs, reduced ambulance services, the changes in the way repeat prescriptions are ordered and so on all have an incremental effect. For that matter even things like public transport can put people off seeking medical help. I don’t thinks it’s because people in the North of Britain have worse habits than people in the South. I think the infrastructure is disproportionally weighted to London and its surrounding areas.
Infrastructure spending is an important area of state support for the economy and public services. It does not, however, address the core issue of inequality. The highest concentrations of poverty and rough-sleeping in this country are to be found in London. This is in common with large urban centre’s around the world.
The greater the level of infrastructure investment the more demand there is for land that is serviced by this infrastructure and the higher the price of land goes shutting out those at the bottom from access to affordable accommodation. This is what happens in London, Sydney, New York and San Francisco.
Infrastructure investment is a necessary corollary to economic development but in driving up land prices, it leaves behind those unable to compete for accommodation. Housing benefit and social security payments struggle to keep up with the increasing cost of living and ever-higher levels of tax on wage incomes reducing disposable incomes merely serves to entrench the problem.
Infrastructure investment and tax reform to capture increases in land value driven by public investment should go hand in hand to address the core issues of poverty and inequality.
TCO, Lifestyle choices are affected by poverty and in turn affect health. For example, a meal from a fast-food shop will be cheaper to buy than carefully selected foods offered in M&S or Waitrose, and may also be the only option for someone rushing from one part-time zero-hours job to another. Poor families eat cheaply and buy at local shops, since they haven’t time or cash to go to a variety of stores in search of bargains.
Poverty is linked to health inequality both causally and consequently. That can be seen most dramatically among the two and a half million people already subjected to Universal Credit. For some, the five-weeks’ wait for the first payment drives them into the hands of loan sharks, or at least forces them to take the loan from the system which they are then unable to pay back, because they need every pound which they are eventually paid for necessities. They can fall behind on rent and be evicted, and may end up homeless. Even if they survive in their original home the stress of trying to make ends meet may well worsen their health conditions. The BBC recent programmes illustrated how much people are locked in with seemingly no way out of a system felt as cruel in practice, however well intended.
Whatever the new Chancellor has left to give out on March 11, our spokesperson should be demanding that the baseline benefit levels be raised, that the wait for the first UC payment should be no more than two weeks, and that people be allowed to keep at least 50p in each pound earned above the basic low level permitted, instead of the present 37p, a meagre concession but important to low earners.
@Katherine Pindar “TCO, Lifestyle choices are affected by poverty and in turn affect health. For example, a meal from a fast-food shop will be cheaper to buy than carefully selected foods offered in M&S or Waitrose, and may also be the only option for someone rushing from one part-time zero-hours job to another. Poor families eat cheaply and buy at local shops, since they haven’t time or cash to go to a variety of stores in search of bargains.”
That just doesn’t wash. It’s making excuses for people and is, frankly, somewhat patronising to say that people are unable to recognise this. Aldi, Tesco, Co-Op all have fresh vegetable sections. Fast Food is far more expensive than cooking using fresh ingredients.
TCO I suggest you look up, consider, and reflect on this tragic case.
‘Judge me fairly’: man who starved to death’s plea to welfare….. …www.theguardian.com › society › feb › errol-graham-man-starved-de……. 4 days ago – Errol Graham, a desperately ill man who died of starvation when his benefits were cut off, wrote a moving letter pleading with welfare officials to “judge me fairly” because he was overwhelmed by depression. … ”
Do you claim, “Reports like this cause well-meaning but naive people to excuse unforced lifestyle choices. It’s time for people to take personal responsibility for their health and wellbeing” .
I’m afraid that as a naive but well meaning person, and after four years as Chair of a Foodbank dealing daily with the impact of the Welfare Reform Act, 1912, my knowledge and experience of these matters differs somewhat from your good-self.
Health is not simply a matter of personal lifestyle choices. The social determinants of health have long been understood. The Boer War was an early catalyst to state intervention. 40-60% of volunteers to the army, mainly from working-class backgrounds, were rejected on medical grounds. In some towns, nearly all young men were turned away. After the war, the Report of the Committee on Physical Deterioration 1903, referring to the state of working-class people in Britain noted:
‘A population reared in the sunless slums of our smoke-enveloped cities, unless reinforced by marriage with men and women born and reared in God’s fresh air,
deteriorate quickly to such an extent that the third generation is either sterile, or at best capable of giving birth to an infirm and rickety posterity.”
During WW1, the Ministry of National Service Health Boards examined 2.5 million men, which was thought to be a representative sample of the nation’s health overall. Men were graded I,II or III for fitness and in 1918 a quarter of all men were graded II or III, a statistic. David Lloyd George described as ‘appalling’. He said in 1919 that ‘you cannot conduct an A1 empire with a C3 population’.
The Beveridge report and the creation of the NHS saw a major advance in public health and social conditions in the post-war years. The combination of better health care and increased affluence meant life expectancy increased from 65.8 years for men and 70.1 years for women in 1948 to 71 years for men and 77 years for women in 1979 and has continued to increase decade by decade until stalling recently.
Society has come a long way since the days of the Boer War, but overcrowded and poor Housing conditions are still with us as is chronic air pollution in British cities.
@ Joseph Bourke Correct, Joe, the Boer War focused the issue, as did the City I went to school in (much later !).
In 1904 Bradford became the first local authority in Britain to provide free school meals after a campaign by the recently elected Labour M.P. Fred Jowett, and his friend Jonathan Priestley, (Headteacher and father of the well-known writer J.B. Priestley). The first meal consisted of scotch broth, fruit tart, bread and a mug of water for each child..
Fred persuaded the local council that, “it is the duty of the community to see that all children are sufficiently fed. That voluntary effort is not able to feed children who are regularly or temporarily in need of food”.
Two years later, he persuaded Campbell-Bannerman’s newly elected Liberal Government to pass the 1906 Education (Provision of Meals) Act which allowed, but did not require local authorities to provide school meals.
David, thank you for reminding us here about the tragic case of Errol Graham. It is a shame if only a desperately sad death can serve to remind Britain of the masses of low-paid or unwaged people, some living with disabilities, some caring for others or ill and alone, dependent on these restricted benefits and finding life often a stressful struggle unobserved by the more fortunate.
“When William Beveridge created the welfare state benefits were 27 per cent of average income. After five years of the benefit freeze it is now 14 per cent. The poorest fifth have lost a tenth of their income.” I am indebted to a Times journalist, Jenni Russell, for informing me of these starkly contrasting figures. Our campaign focus for a new Social Contract including commitment to relief of poverty and tackling health inequality which contributes to poverty seems very needful.
Joe Bourke, I was a little puzzled, as Michael BG was, by your quoting the Fairer Shares for All decisions of last September’s Federal Conference, which I also thought less far-reaching than we would have liked. I don’t think any of us can doubt the deprived state of parts of London, but are you suggesting that Marmot’s emphasis on problems in the North-East is unfair? And that generally speaking Lib Dem present policies will meet all needs? The pledges you quote highlighted by the BMA sound a bit feeble – ‘pursuing a Health in All Policies approach, with national and local decision-making’ – and the particular pledges mentioned fairly trivial.
Michael BG – thank you for your several useful comments, Michael.
Katharine,
the Marmot review sets out six policy objectives aimed at addressing pubic health inequalities:
1. Give every child the best start in life
2. Enable all children, young people and adults to maximise their capabilities and have control over their lives
3. Create fair employment and good work for all
4. Ensure healthy standard of living for all
5. Create and develop healthy and sustainable places and communities
6. Strengthen the role and impact of ill-health prevention.
To achieve those objectives tangible policy proposals have to be developed and promoted in Parliamentary debates as part and parcel of holding government to account. This is what Libdem policies (including those adopted in the Fairer Share for All paper) seeks to do.
It is in London that you will find the highest levels of poverty in the country https://www.onlondon.co.uk/london-poverty-rate-is-britains-highest-institute-for-fiscal-studies-reports/
“The largest percentages by all measures [of poverty] were found in the capital, including the most severe. London has the highest rate of poverty in the whole of Great Britain.
The Institute for Fiscal Studies found that the proportion of people in poverty in the capital is a massive 31%, which is higher than elsewhere in the country as a whole, and that the more extreme forms of hardship reach as much as 47% higher.
London’s 31% rate was the most extreme of any English region, ahead of the North of England’s rate of 23% and an overall GB rate of 22%.
Both “income poverty” and “expenditure poverty” rates were also at their highest in London, running at over 20% in each case, compared with 15% and under nationally.
London also has the highest rate of “material deprivation”, the most extreme form of poverty.
The statistics, compiled with support from the Joseph Rowntree Foundation, demonstrate that characterisations of the capital’s population as predominantly better off than counterparts elsewhere in the country are misleading. Last month, a breakdown of national child poverty rates by the End Child Poverty campaign showed that ten of the 20 highest in England were in London local authority areas and parliamentary constituency areas.”
The latest today :
The Guardian 2 March 2020
‘Vulnerable and disabled people are being pressured to accept unrecorded telephone “deals” paying thousands of pounds less in benefits than they may be legally entitled to, charities and lawyers have said.
The Department for Work and Pensions has been accused of making “decide right now” offers to people who have appealed against a decision to deny them benefits. In some cases the people say they were told the offer would be withdrawn if they did not accept it within minutes.
It is claimed that by making the lower offers over the phone, the DWP is trying to settle cases that could lead to payments of significantly more each year if they go to a tribunal. Around 70% of such appeals go in favour of the people who bring them.’
@David Raw perhaps you ought to look at the evidence of what causes poor health.
Obesity. Caused by sedentary lifestyle and poor dietary choices.
Joseph, it is not in my view relevant to this discussion to point out that London has the highest rates of poverty in the country. The point the Marmot Review makes is that, “For both men and women, the largest decreases in life expectancy were seen in the most deprived 10 percent of neighbourhoods in the North East and the largest increases in the least deprived 10 percent of neighbourhoods in London.” Please note the wording – that the LEAST DEPRIVED neighbourhoods of London had the largest increase in life expectancy. This was not a question of weighing up how many deprived areas there were in either region.
Similarly, I am disappointed to see you setting out the six policy objectives of the original review. I had adequately covered all those points, combining them for greater immediate clarity, and also added the two extra ones you may not have noticed, on poverty and regional concerns. Please go back to my article, and observe the fourth paragraph from the end, beginning ‘The original Marmot review…’ I also summarised the objectives again in my comment of March 1 at 6.40 pm.
I am afraid we are somewhat at cross-purposes, oddly when usually I very much admire your considerable contributions to LDV. Of course I agree that we need ‘tangible policy proposals’ which to some extent we do have. But the new Marmot review has a broader aim. “to ask the prime minister to initiate an ambitious and world-beating health inequalities strategy”. I am suggesting it would be good for our party to back him, by focusing on poverty and health inequality within a renewed Social Contract.
TCO – Surely an acceptable liberal answer to a point about starvation is to refer to that and counterpoint it with the problems of obesity, not to simply ignore it. Obesity (as you point out), lack of time, money (as pointed out by Katharine) and no proximity to an Aldi or Lidl as well as an uncaring bureaucracy (David Raw) are all problems faced by many people and each has to be part of a liberal solution. We all need to learn from each other, that is how we grow. We won’t by ignoring them.
@Katherine Pindar I’m interested that you refer to a “renewed Social Contract”.
A contract is an agreement (enforceable in law) entered into voluntarily, that places performance obligations on both parties. You’ve written a lot about what you believe to be the performance obligations of the State, but have been silent (so far) on what you believe to be the performance obligations of the citizen. Beveridge, of course, was very clear about those obligations.
I’d be interested to hear you views on what the State should require from its citizens in order for them to perform their side of the Social Contract.
@David Evans if you follow the thread you will see that I was supporting another contributor’s point that has been omitted in any discussion by Katherine Pindar, David Raw and others – namely the personal responsibility of the citizen to look after their personal health and well-being by taking appropriate exercise and not eating in a way that causes them to become obese.
It is clear that Obesity is significant factor in the stalling and reversal of Life Expectancy, yet the OP did not refer to it.
@ TCO Just returned from my daily twenty lengths to discover your excellent advice,
“TCO, 11.37 pm, David Raw, Perhaps you ought to look at the evidence of what causes poor health. Obesity. Caused by sedentary lifestyle and poor dietary choices”.
Splendid advice from someone who once admitted his acronym TCO stood for Terry’s Chocolate Orange. Perhaps we should stick to Tory Central Office and reminder him that early nights can clear the brain..
TCO 2nd Mar ’20 – 11:37pm……perhaps you ought to look at the evidence of what causes poor health. Obesity. Caused by sedentary lifestyle and poor dietary choices…………..
Reading your post are a reminder of a TV series of a few years ago in which ‘celebs’ were paired with poor families.
One ‘celeb’ (I think it was Boris Johnson’s sister) cooked a ‘healthy meal’ for the family..She was shocked when they pointed out that she had spent almost all their weekly food budget on that one meal.
Poverty cuts down all choices.
David Raw. Thank you, David, especially for pointing out the Guardian report of the latest injustice of the DWP towards people given inadequate payments. Having to go to tribunals must be very hard for people probably wearied and stressed by their difficult lives, and not used to having to present their cases to official bodies.
David Evans and expats, thank you for your relevant and helpful comments this morning.
Much of the debate seems to be between those of a rightward inclination, such as TCO, who argue:
“No one forces anyone to eat sugary foods, take no exercise, drink and smoke”
and those on the progressive left who counter that with:
“The more deprived the area, the shorter the life expectancy”
So the question is: Would life expectancy be increased substantially if deprived areas were made less so by increasing welfare benefits. TCO, and others, might say this would enable the poorer sections of society to be able to afford more sugary food, more alcohol, more cigarettes, and more petrol to enable them to take even less exercise!
I doubt if there is likely to ever be agreement on this. As a scientist I have to say I just don’t know. Maybe we should do a controlled experiment somewhere? On the other hand as a thinking political person I don’t like the idea of inequality and I also don’t like the idea of people who are capable of making a useful contribution to society living on benefit payments. It takes away people’s self respect. If that happens they are more likely to choose a unhealthy lifestyle.
So I would have to admit there could well be something in what TCO says.
Peter Martin
I think the problem both sides are getting a bit bogged down the personal on tht dietary argument to the exclusion of other factors. They’re ignoring the impact of things like living alone , poorer medical services, reduced numbers of care workers, lack of support, shorter times in hospitals with less follow up treatment and so on. When you have an aging population health becomes more medicated as all kinds of frailties increase. I think some people like to over emphasise things like obesity because casting judgement on one cause amongst many is easier than looking at the bigger picture. We’re not talking about large numbers of young and middle aged people dying very early , but of older people on low incomes living years less than their wealthier counterparts. Personally, I don’t think its all down to diet. I think things like housing, transport, , utility costs, access to doctors, follow up medical care, home visits, and things of that nature are being downplayed. The obsession with obesity is the modern equivalent of blaming every health issue on gin mills, it’s a mixture of prurience and condemnation masquerading as a solution to poverty .
@David Raw “@ TCO Just returned from my daily twenty lengths to discover your excellent advice.”
I’m very pleased to read that it appears you are taking personal responsibility for maintaining your own physical fitness, thereby helping to reduce any avoidable burden you might place on other taxpayers.
@expats when was the last time you ate a fast food meal? It’s more expensive than healthy food.
@Peter Martin interesting comments, though I would dispute the term “progressive” about the Left. Furthermore self-reliance and personal responsibility has a long history within the working classes.
“Splendid advice from someone who once admitted his acronym TCO stood for Terry’s Chocolate Orange.”
TCO stands for Terry’s Chocolate Orange-Booker.
“Perhaps we should stick to Tory Central Office and reminder him that early nights can clear the brain..”
I am always intrigued that you seem to be able to post ad-hom comments like this without apparent moderation.
Peter Martin, you write that you don’t like the idea of a person capable of making a useful contribution to society living on benefits. The obvious mistake you are making here as ‘a thinking political person’, Peter, is that you can’t tell if a person living on benefits is NOT making a useful contribution to society. They may be creating some beautiful piece of art, or looking after people or children who can’t look after themselves, for example.
Moreover there are two other points you would surely like to consider. The first is that these days the Social Security staff make it very difficult for anyone to get away with not working who IS capable of doing so: under threat of withdrawal of benefits, people are obliged to take any work offered them. And the other point is that nobody who doesn’t have other means of income is at all likely to be willing voluntarily to go on living with the current miserable rates of income, which are causing so much hardship.
Glenn, thank you for that very reasonable, sensible contribution to this debate.
TCO, would you please spell my first name correctly when addressing me? As to your query as to what should be expected of the populace in a renewed Social Contract, this was answered in the fourth paragraph of the article, A new Social Contract – putting flesh on the bones, written by Michael Berwick-Gooding and myself, and posted here last month. It was also discussed in the comments which followed. I had hoped to post the reference to the article here, but unfortunately as I did so my Internet connection collapsed, and it has taken an hour to get it back. and start writing again this lost comment. So I will merely tell you that the article was posted here on February 6, to enable you to easily reach it. I will not hold you personally responsible for the inconvenience, I assure you! 🙂
@ Katharine,
“you can’t tell if a person living on benefits is NOT making a useful contribution to society”
Yes, this is a fair point. There are a lot of people doing voluntary work, for the public good, which is useful. If anyone wants to carry on doing this then that should be their choice. They should also have the opportunity to make the case they are performing a useful function and be paid accordingly as part of a Job Guarantee scheme which I’ve argued for in preference to a UBI.
Just how and who would make this decision is one of those details which would have to be resolved. Looking after elderly people or children would seem to be an activity which could be looked upon favourably but there would, of course, have to be checks to ensure that those with nefarious motives are kept well out of it.
Paying someone to produce what may or may not be considered “beautiful pieces of art” is going to be much more problematic! The criterion has to be “for the public good”. The Job Guarantee shouldn’t be a soft option to enable everyone to be paid for pursuing their own hobby.
TCO 3rd Mar ’20 – 3:25pm……………[email protected] when was the last time you ate a fast food meal? It’s more expensive than healthy food……………….
Why just refer to ‘takeaways’ although often a Big Mac deal is very cheap (On the back of my last bus ticket was an offer for 99p).
Mince with 20% fat is around half the price of that with 5%. The ‘sell-by-date’ stuff in my local superemarket is usually processed food with high clorie/salt/sugar content.
Perhaps, instead of making such claims, you might have a look at those areas…
@Kathrine Pindar “As to your query as to what should be expected of the populace in a renewed Social Contract, this was answered in the fourth paragraph of the article, A new Social Contract – putting flesh on the bones, written by Michael Berwick-Gooding and myself, and posted here last month.”
So I went away and found the fourth paragraph of the article, which states:
Really? Is that it? Nothing is expected of anyone, other than that they obey the law and we hope that they’re nice to people (but it’s not mandatory)?
If you think that will be a vote winner, then you have very little understanding of human psychology and human nature. Fundamentally this is because people value fairness much higher than equality.
And I think where you’re getting this wrong, is that you don’t connect “the State”, which you seem to think of as some amorphous source of largess, with the millions of individual taxpayers who enable it. Millions of people who only will buy into this contract (ie vote for it) if they think it is fair.
The majority of people, the majority of the time, do not begrudge helping out those who through no fault of their own have fallen on hard times. That, after all, is a fair thing to do. They do, whoever, begrudge unfairness, as the link to the research above shows. Which means that any social contract needs to be seen generally to be fair (as Beveridge recognised when he talked about the State not stifling the incentive of the individual to better himself [sic]) in order to be accepted by a society.
Katharine,
there is a strong overlap with policy adopted by conference in recent years, (particularly with respect to early years education, childcare support, putting wellbeing at the heart of economic policy and channelling resources to the areas with the highest levels of deprivation ) and the following recommendations of the Mermot report:
Recommendations for Giving Every Child the Best Start in Life:
• Increase levels of spending on early years and as a minimum meet the OECD average and ensure allocation of funding is proportionately higher for more deprived areas.
• Reduce levels of child poverty to 10 percent – level with the lowest rates in Europe.
• Improve availability and quality of early years services, including Children’s Centres, in all regions of England.
• Increase pay and qualification requirements for the childcare workforce.
Recommendations for Enabling all Children, Young People and Adults to Maximise their Capabilities and Have Control over their Lives
• Put equity at the heart of national decisions about education policy and funding.
• Increase attainment to match the best in Europe by reducing inequalities in attainment.
• Invest in preventative services to reduce exclusions and support schools to stop off-rolling pupils.
• Restore the per-pupil funding for secondary schools and especially sixth form, at least in line with 2010 levels and up to the level of London (excluding London weighting).
(Continued)
Recommendations for Creating Fair Employment and Good Work for All
• Invest in good quality active labour market policies and reduce conditionalities and sanctions in benefit entitlement, particularly for those with children.
• Reduce in-work poverty by increasing the National Living Wage, achieving a minimum income for healthy living for those in work.
• Increase the number of post-school apprenticeships and support in-work training throughout the life course.
• Reduce the high levels of poor quality work and precarious employment.
Recommendations for Ensuring a Healthy Standard of Living for All
• Ensure everyone has a minimum income for healthy living through increases to the National Living Wage and redesign of Universal Credit.
• Remove sanctions and reduce conditionalities in welfare payments.
• Put health equity and wellbeing at the heart of local, regional and national economic planning and strategy.
• Adopt inclusive growth and social value approaches nationally and locally to value health and wellbeing as well as, or more than, economic efficiency.
• Review the taxation and benefit system to ensure it achieves greater equity and ensure effective tax rates are not regressive.
Recommendations to Create Healthy and Sustainable Places and Communities
• Invest in the development of economic, social and cultural resources in the most deprived communities
• 100 percent of new housing is carbon neutral by 2030, with an increased proportion being either affordable or in the social housing sector
• Aim for net zero carbon emissions by 2030 ensuring inequalities do not widen as a result.
Health outcomes are not merely a matter of a North/South divide. As the IFS report notes “The statistics, compiled with support from the Joseph Rowntree Foundation, demonstrate that characterisations of the capital’s population as predominantly better off than counterparts elsewhere in the country are misleading.”
There is a danger, in commenting on a major scholarly report on this site, that eventually the messages of the report are obscured because of the simple human tendency not to see the wood for the trees. I will therefore attempt here to give some overview of this forest!
+ The health of the population in England has stopped improving since 2010.
+ There are marked regional differences in life expectancy, particularly among people living in more deprived areas, and the largest decreases in life expectancy were seen in the most deprived 10% of neighbourhoods in the North East.
+ The national government has not prioritised health inequalities, despite the concerning trends, and a national strategy should now be adopted as a first step to leading the necessary national endeavour to reduce health inequalities.
+Cuts to local authorities have been hugely significant: allocations from the Ministry of Housing, Communities and Local Government declined by 77 per cent in the ten years.
+ The cuts have been regressive and inequitable, greatest in areas where need is highest and conditions are generally worse.
+ Targets set should bring the level of health of deprived areas in the North up to the level of good health enjoyed by people living in affluent areas in London and the South.
+ Rates of child poverty have increased since 2010-11 with over four million children affected.
+Funding for Sure Start and Children’s Centres and other children’s services has been cut significantly, particularly in more deprived areas.
+ Regionally, the North and the east Midlands have the lowest levels of attainment at age 16, and London has the highest.
+Pupil numbers have risen while finding has decreased by eight per cent per pupil.
TCO. Thank you for checking back. There is no need to be rude in assuming you have a better knowledge of human nature and psychology than Michael and I have: as long-standing members of the party (are you?) we have fairness ingrained in us. The point is that it is now assumed by all citizens that fair treatment of us by the state is our right, whether it is in making sure that we have a sufficient income to live on or in protecting our health generally. As Philip Alston so ably pointed out, governments in the last few years have shown indifference to the needs of our poorest and most disadvantaged citizens, and not ensured either their income or their well-being as they should have done. Professor Marmot effectively adds to this, that governments have allowed the health of these citizens to suffer, because individual health is dependent on many social and economic factors which have been allowed to deteriorate in their effects.
@Katharine Pindar “The point is that it is now assumed by all citizens that fair treatment of us by the state is our right, whether it is in making sure that we have a sufficient income to live on or in protecting our health generally.”
Leaving this assertion aside, you haven’t responded to the point that I was making, which is this:
Is it fair that your proposed Social Contract between the State (in reality the collective agency of representatives chosen by the people and charged with disbursing the people’s money) places no obligation on the citizens who are party to it, other than to obey the law?
What additional obligations would you think a reasonable person might expect should be placed on themselves and others, in order to be party to this contract? There are plenty of things that are legal but not desirable, or fair.
This year marks the 40th anniversary of the publication of the Black Report, a government report on health inequality, which stated that the death rate for men in social class E was twice that of men in class A, and that the health gap was widening.
My point is that we are discussing Marmot’s work as if it was something new, when infact these new figures, as appalling as they are, simply confirm an inequality that has been there for most of my lifetime and probably much longer.
@ TCO
You highlight (with some disapproval ?) the phrase:
“The only legal requirement for the people in a new Social Contract is to keep the laws of the UK. The social element desired is that people show respect to everyone and their rights.”
I think we share the same worry about not requiring more of everyone in return. You probably wouldn’t quote the phrase “From each according to their ability to each according to their needs” but the first half is just as important as the second. IMO. And it is “needs” rather than wants. The problem I have with the present system is that the incentive is based on a fear of falling into unemployment or, more likely, underemployment in poorly paid part time and insecure jobs.
So how to make sure that everyone who wants a ‘proper job’ ie one with a living wage, a guaranteed working week, paid holidays, sick leave and a proper pension scheme can have one? It’s what many of us have always had and I see no reason why anyone else should be denied the same. The flip side is that there is a requirement that we turn up on time, do the job to the best of our ability and do what it takes to fit in as best we can.
Where we might disagree is on the question of the nature of “the State.” It’s not the same thing as a local council albeit on a larger scale. The State doesn’t rely on taxpayers’ money. Rather its the other way around. The taxpayers rely on the Sate to create the money they need to pay their taxes in the first place. That’s not to say the State can do without the taxpayers any more than the taxpayers can do without the State. It’s a symbiotic relationship which is driven by the need to create a functioning system.
The State creates the money then demands taxes are paid in that money. It doesn’t need the money per se. What it does need is that taxpayers work to obtain the money they need to pay their taxes.
Chris Cory. I think a point from the Marmot Conclusions answers you, Chris. “We neither desire nor can envisage a society without social and economic inequalities. The public thinks that inequalities have gone too far, and evidence suggests that the rising levels of health inequalities in England are avoidable. ” Recall that this Review is assessing progress from the Review of ten years ago, and finding much less progress has been made than could have been expected and was desirable..
TCO. Yes. None.
@ Katharine,
I take it that your terse reply to TCO of “Yes. None” means that LibDems would ensure that no-one should be required to give anything in return.
If you want any policy to be widely acceptable then it can’t be something that just a few Lib Dems might agree on. You have to try to establish a dialogue with those of other opinions too. Those of us who’ve spent some time living in communal households probably know the problems caused when one or more of our housemates don’t make the contributions which are expected. It’s no different in principle in wider society.
@Peter Martin “If you want any policy to be widely acceptable then it can’t be something that just a few Lib Dems might agree on. You have to try to establish a dialogue with those of other opinions too. Those of us who’ve spent some time living in communal households probably know the problems caused when one or more of our housemates don’t make the contributions which are expected. It’s no different in principle in wider society.”
Quite. That’s exactly the point that I have been trying to make. And why the Lib Dems get accused of not being realistic or in touch with the way the world works.
With respect, TCO and Peter, I think it is needful now to consider questions of poverty and health inequality arising from the new Marmot Review. The recent two articles about a new Social Contract caused a great deal of discussion, with nearly 200 comments between them, so I think you had the chance then – which you indeed took , Peter – to raise your queries while those most relevant threads were fully live. The Social Contract, Beveridge-derived idea, is an encompassing theme which we are considering forming a working group to explore thoroughly, but just now the related .questions of poverty and health inequality as presented by the Marmot Review deserve, I believe, our full attention.
The Royal College of Physicians together with 20 other health organisations have written to the Prime Minister urging adoption of the recommendations in the Marmot review:
https://www.rcplondon.ac.uk/news/marmot-review-2020-government-must-go-further
In the letter, the signatories say:
‘Your government should urgently consider increasing both the ‘national minimum wage’ and the ‘national living wage’ to be at least in line with the real living wage, as calculated by the Resolution Foundation https://www.resolutionfoundation.org/publications/calculating-a-living-wage-for-london-and-the-rest-of-the-uk-2019-20/. We know this would be a significant decision, but if not now then when?’
The recent Libdem manifesto announced that the party wants to establish an independent review to consult on how to set a ‘genuine’ living wage across all sectors.
A new ‘dependent contractor’ employment status would be established, which would sit between employment and self-employment and come with entitlements to rights such as minimum earnings levels, sick pay and holiday entitlement.
The manifesto pledged to set a 20% higher minimum wage for people on zero-hours contracts to compensate them for the uncertainty of fluctuating hours of work. There would also be a right to request a fixed-hours contract after 12 months for zero-hours contract and agency workers,
The manifesto also reiterated the pledge to launch a £10,000 ‘skills wallet scheme’ for every adult in England to spend on education and training throughout their life. It also pledged a ‘wellbeing budget’ which would base decisions for government spending on what will improve wellbeing, as well as on economic and fiscal indicators.
The focus on wellbeing would be delivered through appointing a minister for wellbeing and teaching emotional resilience in schools.
Joe Bourke – The latest Libdem manifesto promises significant expansion in childcare policy. Is our proposal universal? If it is not, how about changing it to Universal Childcare, making it an universal program instead. If it is already in nature, how about adopting the “Universal Childcare” label. We must always remember that a universal program is always harder to undermine.
Universal Childcare has been a thing in various places like Quebec, New York or Sweden. It came close to go into existence in Canada at federal level under Paul Martin government before it fell in 2006.
TCO,
There is a correlation between poverty and poor health and life expectancy. It is a fact that life expectancy has fallen for some of the poorest areas of the country while still continuing to increase in the wealthiest areas. Therefore doing something about poverty should have a health effect. As there is also a correlation between other factors and life expectancy, there is likely to be a correlation between these other factors and deprived areas.
The New Scientist article you link to is not useful as the new social contract is not about equality of distribution and still includes a strong element of inequality of distribution. Fairness if not something everyone agrees with. I posted about this somewhere recently. However, there is a moral aspect. People don’t look at a starving child and say that it is fair than the child is starving, they see it as morally wrong. Many would view a starving adult in the same way; they would feel that no one should be allowed to starve. It is this thought that some things are morally wrong which we wish to appeal to. It is morally wrong that people are homeless because there are not enough homes; it is morally wrong that people are not working when they wish to work; it is morally wrong that anyone in the UK lives in relative poverty. Having a floor which people can’t fall below is fair. If our new social contract became party policy we would have to convince people that all the things included were fair as part of this floor. Our new social contract would still keep the incentive for people to better themselves.
To be clear, there should be no additional obligations put on people for them to benefit from the state ensuring they do not live in poverty, that they have free health care, that they have free education and training to enable them to contribute to society, that they have access to an affordable home and that they can have a job if they want one.
Peter Martin,
I don’t understand why you would worry about a social contract which provided what I set out in my last paragraph.
Peter and TCO
If you wish to continue this discussion on the social contract please can you post your comments in the old thread – https://www.libdemvoice.org/a-new-social-contract-putting-flesh-on-the-bones-63391.html.
Thomas,
the free childcare proposals are universal for all 2 to 4 year olds – equalising childcare entitlement for children in this age group, regardless of a child’s background or his or her parents’ working patterns. This shifts the free childcare programme away from targeting children and families who are perceived to have more need for – or more to gain from – childcare. The policy is based on 35 hours of childcare for 48 weeks of the year an funded at higher rates than are currently in place.
For Children from 9 months to 2 years old the policy is targeted at working parents https://www.libdems.org.uk/free-childcare-announcement .This closes the gap from the end of maternity leave to the start of free childcare at 2 years old.
@Michael BG I would just pose you one question. Is it morally right that someone should take from others when they have not made any effort themself?
@TCO
That is obviously morally right in some circumstances – children do exactly that, and even in previous times were allowed to have a few years free before being sent down the mines or to the farm or into service.
Assuming that this is agreed, then determining when after infancy people should “pay their own way” – taking into account all the context – is not at all straightforward (either morally or legislatively).
These are excellent posts overnight from Joe Bourke and Michael BG, thank you to both. The summary of the report’s recommendations and accompanying letter to the PM by the Royal College of Physicians and other health organisations is first-rate, and should encourage our party’s acceptance of it, and consideration of how far our policies match and how far they still need to develop to meet the challenges of the Marmot review.
Combatting poverty and health inequality should certainly be central to the renewed Social Contract which Michael and I have advocated in earlier threads, and Michael’s explanation here in the face of renewed challenges of the moral basis of the provision of basic needs is one I fully endorse. While we do not wish to revive the long discussions of the Social Contract idea on this thread, as we both now have said, referring TCO back to the earlier joint one, I would simply say to him that his latest question is irrelevant, since there is no question of ‘taking from others’ in the universal provision of goods from government to its citizens, nor is the ‘effort’ or otherwise of recipients relevant to the meeting of their major needs by government, in this high-functioning developed society in which we are fortunate to live today.
@cim and @Katharine Pindar
Just to use a hypothetical example. You are a parent with a partner who works in a low paid job, and would love to have four children. However, you cannot afford to have four children, so you have two children, which is what you can afford.
Your next door neighbour chooses to have four children without a partner and without employment. She is completely reliant on benefits.
How do you feel about this?
@TCO “Your next door neighbour chooses to have four children without a partner and without employment. She is completely reliant on benefits.
How do you feel about this?”
Whatever my opinion of the neighbour—and I doubt I would be privy to the exact circumstances (family breakdown, unexpected job loss, widowhood) so I would try to avoid judging—I am even less keen on children becoming homeless and starving, so I would hope (alas, these days, not “expect”) that social security would ensure that they didn’t. Are you suggesting that we, as a society, should allow that?
@Daniel Walker
Look again at my question: “How do you feel about this?”
There you are, someone who has acted responsibly, considered your financial limitations, and not had two children you would dearly love to have had. You neighbour – as per the statement – has not been divorced, widowed etc; they have just had four children without worrying about the cost because they expect the State to pick up the tab.
So – again – regardless of whether the State should support these children (and as they didn’t ask to be born, then it should), how do you feel about this?
I’m asking this question for a specific reason – and it’s to do with our actual and potential levels of support.
TCO,
You have set out a case where for financial reasons the hypothetical me and my partner have our liberty restricted because of our economic situation. I think the liberal answer is to ensure that the hypothetical me and my partner both can have a job if we both want one, that the hourly rates for these jobs are at least at the real regional living wage rate and that child benefit is £84.13 for each child.
I agree with Daniel Walker that I would want the state to ensure than my neighbour did not become homeless plus that she and her children were living at the poverty level and not below it. I would want the state to offer her assistance to find a job and to provide for her free the education and training she might need to be able to get the job she wanted. If she had health problems I would expect the NHS to quickly identify her problems and in a timely manner provide her with what she needs to restore her health.
I totally reject that in the UK my hypothetical neighbour should have her benefits capped so that she has to use some of the meagre non-rent element of her benefits to pay her rent. I reject the idea that if she doesn’t jump thought the hoops set by the DWP she should be sanctioned and lose all but the rent element of her benefits.
I hope you answer Daniel’s question – do you think that the state should allow this hypothetical neighbour to become homeless and/or for her and her children to go hungry?
@TCO “How do you feel about this?”
How I feel about this is that I don’t want my neighbour’s children to starve¹, be homeless, or be otherwise mistreated. Other considerations, including my opinion on their parent’s level of responsibility, are so vastly secondary to this as to barely warrant mention, but even if I were to feel some resentment towards the parent, and—not being a saint—I might, on a practical level we have already agreed that the children deserve support, so there is no difference as far as social security / public policy goes.
@Michael BG
I completely agree, although, referring to your last paragraph, to be fair TCO has already agreed that the state should support the children (viz. “as they didn’t ask to be born, then it should”) so I took that to mean TCO wouldn’t allow that.
@Michael BG “I hope you answer Daniel’s question – do you think that the state should allow this hypothetical neighbour to become homeless and/or for her and her children to go hungry?”
I already answered this when I wrote “regardless of whether the State should support these children (and as they didn’t ask to be born, then it should)”.
Again, you haven’t answered my question: “How would you feel about this?”
Let me spell it out clearly because you, Katharaine, cim, expats, David Raw etc are willfully (or otherwise) missing the point.
There are people who live carefully and within their means. They arrange their affairs to manage in a way that makes them financially independent (ie act responsibly).
There are also people who are the exact opposite, and who receive help from the State despite often exacerbating their circumstances in avoidable ways (ie act irresponsibly).
Nobody – nobody – has answered my question; which is how would the first group feel about the second? Regardless of what the State does, or should do. What emotions would that engender?
Can none of you empathise? Nobody got any inkling here as to why this might be a challenge to winning votes?
@Daniel – you responded whilst I was waiting for flood protection to subside. Firstly thanks for acknowledging. Secondly – my more important point is as noted above. I see you’ve written “but even if I were to feel some resentment towards the parent, and—not being a saint”, and here you’re getting towards the point. Many people would feel resentment, for all the reasons highlighted in the New Scientist article I link to in another comment. And the vast majority of people are not saints.
Yet these are the people we need to reach out to and persuade to vote for us. Which is why I think blithe statements such as those made by Katharine that the Social Contract should require no obligations on anyone are naive and counterproductive.
TCO
I feel great about example 2.
Because as well as the highly rare occurrence of one parent and four children, the state has also helped me when I was unemployed for six weeks in 1979 and has helped members of my family who are ill.
And the state has also helped me brilliantly when I have been ill.
And I know that the state also gives child benefit to people earning well above the national average salary.
I feel great about that also.
It’s all part of having a compassionate society.
I have paid an enormous amount of tax and I feel great, generally, about how it is spent.
Now you’re going to tell me that I still haven’t answered your question, aren’t you? 😉
@ TCO,
“Your next door neighbour chooses to have four children without a partner and without employment. She is completely reliant on benefits.”
I think I would have to take issue with you on this. We shouldn’t hold children responsible for any perceived misdeeds by parents. Instead, we should look at ways of making it possible for single parents to continue working and so not having to be so reliant on benefits.
Incidentally, humans aren’t generally hermaphroditic, so there really isn’t any such thing as a single parent!
@ Michael BG,
” I don’t understand why you would worry about a social contract which provided what I set out in my last paragraph.”
I’m sure you do really. Think of all the things that the Lib Dems would like to spend more money on. Better education. Better social care. A better NHS. A better transport system etc etc.
What you really want is more human resources being put into education, social care, the NHS, running the railway and bus network. In all cases it means someone getting out of bed, probably earlier than they would like, to head out of the comfort of their own homes to do demanding jobs. This can only happen if society imposes an obligation on ALL its citizens to make the necessary contribution to society. Reduce that obligation and we have worse education services, worse social care, a worse NHS and a worse transport system.
At least we will until your army robots come to our rescue! When I see a robot teacher effectively handling a difficult class of 15 year olds I might have cause to think again about that!
The centerpiece of Beveridge’s vision was a state-run system of compulsory insurance. Every worker would be helping to build up a fund that would pay out weekly benefits to those who were sick or unemployed or who suffered industrial injury. The scheme would pay pensions at the end of a working life to employees and the self-employed. The idea was to support the worker and his family. Benefits were to be set at a level that enabled a man, his wife and child to survive. There would be benefits for widows and an allowance for guardians of children without parents to care for them. A system of family allowances for the second child (not the first) and subsequent children was intended to ensure that those with large families were not penalised and responsibility for child-rearing was shared between parents and the state. There was also to be a marriage grant, maternity grant and benefit, some specific training grants and a death grant. The key feature was that people were eligible to receive these benefits and grants because they had contributed.
For those who had not paid enough contributions or were not contributing to the national insurance scheme, there was a second tier of welfare provision, national assistance. The financial side of this was meant to be a supplement to the main scheme rather than to be central. The main scheme was universal – everyone had a right to it based on contributions. Only if supplementary help was needed did the ‘means test’ come into play.
Alongside these financial security provisions for all, there would be universal access to education and to health services. These would be funded from taxation and would be free at the point of use.
Housing was addressed in large part through a mass program of council housing. Up until the 1970s priority was given to those with local links and in employment. From the late 1970s those priorities changed and council housing was prioritised for the homeless – mostly not in employment. With the introduction of right to buy in the 1980s, housing starts could no longer keep up with the growth in households and people in work had to increasingly seek accommodation in the private sector.
Solve the problem of rents and much of the issues around poverty and inequality can be tackled Without resolving this key issue it becomes simply a matter of chasing a tail, as ever-higher rents continue to erode and absorb any increases in incomes arising from higher wages or benefit payments.
@ TCO You haven’t answered your own questIon oh anonymous one.
For my part I wouldn’t, and haven’t been, judgemental when I’ve come across cases such as this as a Convenor of Social Work or as. Chair of a Foodbank.
@ Joe,
“The key feature was that people were eligible to receive these benefits and grants because they had contributed.”
Except it can’t work like that as I’m sure you well know. All retired and unemployed workers are supported by the activities of active workers. If an elderly and retired person buys a loaf of bread, that’s a loaf which has been baked by someone who is still active. Maybe that person was a baker himself at one time but that’s neither here nor there. Any bread baked by them has long since either been eaten or gone very very stale!
Another way to look at the question is to realise that ££ are IOUs of govt and to also realise that no-one, not even govts, can save up their own IOUs. It doesn’t mean anything at all.
If the story of Moses were to be retold in modern terms he would have advised the Pharaoh to save up money in the good times so that he could afford to buy grain when the famine hit. Except if there’s a famine there isn’t anywhere near enough grain to buy. Period. There’d really be no point the Pharaoh saving up his own IOUs to try to do that.
Warren Mosler goes into this in more detail.
https://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
Peter Martin,
money is not a store of value here, it is just the unit of measure. Workers contribute part of the fruits of their labour during their working lives. The relevant measure here is not how many pounds, shillings and pence they contributed before decimalization, but what proportion of their working time was given over as measured by the tax and ni contributions deducted from wages or paid by employers as a proprtion of their wages. If that is equivalent to one or two days per working week, then that is the contribution made. The worker is entitled to recompense equivalent to the average contribution of labour time during retirement or periods of unemployment. If, on average, that is 15 years of retirement and 45 years of work, then 1/3rd of labour time contributed during a working life is a store of value for the future. While money remains the medium of exchange, it is this deferred consumption of workers during their working lives that is consumed in retirement. The non-capital goods and services consumed by retirees does, of course, have to be produced by current workers. So the sysyem does require the maintenance of a tolerable dependency ratio, such that the current working population are not required to contribute an excessive element of their labour-time for the maintenance of retirees and others no longer engaged in productive activities.
Great debate, everyone – thanks for contributing! To answer directly your question to me, TCO, yes, I might feel initial resentment, but would remind myself that in this free society we can’t impose our moral standards on other people, and how would I know anyway exactly why our neighbour decided to have these children on her own? I would probably sigh, recalling the popular idea that young women can decide to have a child in order to get a council house, but would remember friends of mine who are just brilliant mothers and don’t really feel that they can be useful to society except in bringing up children well. I would try and get to know the neighbouring family, to see if knowing them I and my partner could come to like them and enjoy these children being around.
Supposing this next-door family doesn’t show obvious likeability in the passage of time, I would undoubtedly hear the sort of reactions you are thinking of, TCO, from other neighbours. But I would point out that in our ageing society we do need more children to be born who can grow up to get jobs and pay taxes and support pensions and the care of old people if they get sick and housebound. And I’d gently inquire, would my other neighbours prefer immigrants to come in and pay the taxes and do the caring jobs rather than British people? (Needless to say, I personally welcome immigrants, but many don’t, as we know. The liberal sentiments so well expressed by male colleagues above I certainly share, but I hear plenty of the other sort.)
To resentful
TCO 5th Mar ’20 – 2:54pm………….Let me spell it out clearly because you, Katharaine, cim, expats, David Raw etc are willfully (or otherwise) missing the point.
There are people who live carefully and within their means. They arrange their affairs to manage in a way that makes them financially independent (ie act responsibly).
There are also people who are the exact opposite, and who receive help from the State despite often exacerbating their circumstances in avoidable ways (ie act irresponsibly).
Nobody – nobody – has answered my question; which is how would the first group feel about the second? Regardless of what the State does, or should do. What emotions would that engender?…………………………
As a member of the first group I regret that there are members of your second group; however, I accept that they will always be a part of any ‘civilised’ society.
You, on the other hand, seems to believe that Aesop’s fable of ‘The ants and the grasshopper’ should apply. (although even in that case I believe the ants’ summer would be the poorer without the grasshopper’s music)
Mind you, as an aside, HM’s family fall very much into catagory two.
Daniel Walker (and TCO),
When I posted my comment at 1.28 pm I couldn’t see TCO’s comment of 12.05 pm!
TCO,
I don’t think how I feel is a relevant question as it seems you agree that the neighbour should receive benefits so she and her children do not starve and are not homeless.
I might feel sad and regretful that my partner and I didn’t have four children. If I thought about my neighbour receiving benefits I would be happy that she receives something but very unhappy that it isn’t enough. I would feel sympathy for her trying to manage on her own with four children and not enough money.
However, now it is clear you are not interested in how I would feel but want me to empathise with a hypothetical ‘me and my partner’ who feels that it is unfair. I have already commented on the unfairness aspect with reference to me and my partner having our liberty restricted because of our economic situation. I have stated what should be done to rectify this situation. Perhaps you missed this aspect of my comment.
TCO and Peter Martin,
Please can you state what extra obligations you think people should meet to receive benefits, to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?
Peter Martin,
Have you misread what I have written? Do you think I am advocating giving everyone a home? Have you not noticed the need for the state to provide an environment where people who wish to work can work?
Most people would like to be working rather than being unemployed. The main exception are retired people. Therefore most working age people already have incentives for them to be employed. Setting the benefit level at the poverty level will not remove these incentives.
@David Raw “For my part I wouldn’t, and haven’t been, judgemental when I’ve come across cases such as this as a Convenor of Social Work or as. Chair of a Foodbank.”
I think the issue is that the majority of the general populace are somewhat judgemental, and don’t operate at the level of saintliness that you do.
Unfortunately it’s them you have to persuade to vote.
@ Michael BG,
“Most people would like to be working rather than being unemployed.”
Most people would like the benefits that come from working rather than not have the benefits and be unemployed. Those who win big on the lottery, for example, rarely carry on working.
Why would they?
“The main exception are retired people.”
If they are retired they aren’t in employment. By definition. Again, it usually depends on economic circumstances. Perhaps they would prefer to be working part time if their pension isn’t that good. The problem with our labour market is that people usually have to make an “all or nothing” choice. Tapering off in the form of a reduced working week with longer holidays isn’t normally an option.
“Setting the benefit level at the poverty level will not remove these incentives.”
I thought the idea of a UBI, and increased benefits generally, was that they took everyone out of poverty? ie above the poverty line. Look, I don’t want anyone to be in poverty. Anyone who wishes to make a contribution should not have to live in poverty. This includes those with intellectual and physical disabilities who are nearly always overlooked in the present jobs market. Have a guess at what the unemployment rate is for those with Down’s syndrome? Hint: It’s very high! This is not because DS people don’t want to work.
A job guarantee would give almost everyone the option of a job at a living wage. For those who are genuinely incapable of working there would of course be special provision.
@ JoeB,
“money is not a store of value here, it is just the unit of measure”
Quite so. But that’s not the way most people look at it. They see it as you’ve written:
“Every worker would be helping to build up a fund ……. The scheme would pay pensions at the end of a working life …….”
They are NOT helping to build up a fund. What is fund except “a store of value”?
I found this rather interesting quote from a report from that right wing bastion, the TUC:
“Alan Hedges in 2005 gives some more support to the idea that ‘paying in’ might be
seen as making a contribution, finding that a key element of:
”
It’s an interesting read, and whilst I don’t necessarily agree with everything, there are several things to commend it. Not least that, unlike many comments here, it actually attempts to address the issue highlighted in the quote above.
Peter Martin,
You have not yet answered by question – Please can you state what extra obligations you think people should meet to receive benefits, to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?
People often talk of giving up work if they win the lottery, but some must use part of the winnings to set up businesses and charities. Then they would continue to work.
Neither Katharine nor I have included a UBI in our new social contract. I think relative poverty is defined as living below the poverty line. I think no one in the UK should live in relative poverty. Do you think some people should live in relative poverty?
You have not really stated why the government providing the five things we want them to provide in our new social contract worries you. Do you worry about the state providing free health care to everyone? Do you worry about the state running the economy so everyone who wants a job can have one? Do you worry about the government providing more social housing so everyone who wants a home of their own can have one? Do you worry about the state providing free education and training so people can get the job they want?
” There should be no additional obligations put on people for them to benefit from the state ensuring they do not live in poverty, that they have free education and training to enable them to contribute to society, that they have access to an affordable home and that they can have a job if they want one.” Michael’s statement here at 1.47 am gives the basis that any individual on Britain should expect, he and I agree, from our state today.
The Marmot Review adds much to this in considering family wellbeing, how every child should have the best possible start in life, and how everyone should be helped to maximise their capabilities. control their own lives and maintain a healthy standard of living. The areas people live in, their local environments and their communities should also concern government, says the review, with particular attention to areas of intense deprivation, and to inadequate housing, air pollution, and ill effects of climate change. These wider considerations of how people may be enabled to live healthy lives I have not mentioned before, a late-night attempt on March 4 having been cut off well before completion, but they are considerations which I am sure will resonate with our party, and the whole review be hopefully studied and absorbed into our own developing programme for government.
The point made by TCO regarding rights and responsibilities is a fair one. All UK residents have a responsibility to respect the rights of others. UK residents must also obey UK laws and regulations. UK residents who are parents must protect and care for their children until they are at least 16 and must ensure that all children between the ages of 5 and 16 attend full-time education; pay taxes honestly; serve on a citizens jury when called upon; and defend the country if the need should arise.
Those who choose not to fulfil these responsibilities will face the penalties prescribed in law.
Regarding the rights that society should seek to ensure these were articulated by Frankin D Roosevelt in 1944:
“We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men. People who are hungry and out of a job are the stuff of which dictatorships are made.”
In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.
Among these are:
– The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
– The right to earn enough to provide adequate food and clothing and recreation;
– The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
– The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
– The right of every family to a decent home;
– The right to adequate medical care and the opportunity to achieve and enjoy good health;
– The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
– The right to a good education.
All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.”
“America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for all our citizens. For unless there is security here at home there cannot be lasting peace in the world.”
TCO,
I have no issue with Joseph Bourke’s list of the responsibilities of UK residents, which he implies are backed up by UK laws.
I like parts of Frankin D Roosevelt’s list of what rights US citizens should have:
“The right to a useful and remunerative job …
The right to earn enough to provide adequate food and clothing and recreation;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.”
Please can you explain your position in more detail with regard to the woman with four children in your hypothetical example? Is your position that the state should pay the woman benefits so she and her children have their basic needs met including being housed? And therefore while you empathise with the neighbours who think it is unfair that she has four children and they don’t, you don’t believe the state’s policy should be changed in any way to deal with this perceived unfairness?
You asked Katharine what additional obligations she thinks would be reasonable for people to be included in our new social contract. And both Katharine and I have re-iterated our position that no additional obligations are required. Please can you answer my similar question which you haven’t answered yet – ‘Please can you state what extra obligations you think people should meet to receive benefits, to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?’
@Katherine Pindar ” There should be no additional obligations put on people for them to benefit from the state ensuring they do not live in poverty, that they have free education and training to enable them to contribute to society, that they have access to an affordable home and that they can have a job if they want one.”
What if they choose not to participate in education, training, or employment?
@Michael BG I’ve already answered your question. You, however, still seem unable to answer mine, so let me put it more simply.
You, Katherine et al seem to think that by saying “We all believe that no-one should have any obligation placed on them in order for the State to provide them with everything.” that everyone else will agree with you, and you’ll get elected into government.
I keep pointing out, with evidence, that many if not most people ascribe to the principle of reciprocity – a belief that the Social Contract confers both rights and obligations. This is something that Beveridge recognised, and if you actually do some research and read, even as a starting point, the TUC report I linked to, you will see this.
So – given how ingrained this is within the human psyche and our society, how do you think your message that there are no obligations on people will be sufficiently popular to be a vote winner and thereby enacted?
If you come to the same conclusion that I do, that it won’t, how do you propose to get round it? And please don’t give the answer you appear to give above (“appeal to people’s better nature”) because that won’t work. As we can see from many decades’ evidence.
The second question I would ask @Katharine Pindar and @Michael BG, having looked at the data tables, is what correlation do they think is there between wrap-around welfare and a homogenious society?
Is there any correlation between traditionally homogenous Scandinavian societies and their welfare systems, and the breakdown of those systems now their societies are less homogenous?
Is there any correlation between the introduction of wrap-around welfare in the UK and the sense of homogeneity and commonality engendered by the experience of six years of World War?
Do you think that risk-pooling and a sense of social obligation is more difficult at a time when society is very divided along all sorts of different axes?
TCO 5th Mar ’20 – 9:06pm…………..I found this rather interesting quote from a report from that right wing bastion, the TUC:. But MANY PEOPLE would argue that if you’ve just opted out or haven’t bothered to get a job you haven’t kept your side of the bargain and therefore shouldn’t expect the rest of society to keep its side…………….
Many people would argue in favour of capital punishment, corporal punishment in schools, in favour of ‘trickle down’ levels of taxation, against legal abortion, etc., etc….
It depends on what sort of society you want and which party best suits that aim..
Scrooge’s “Workhouses and Prisons” would remove those ‘burdens on society’ into forced labour (picking oakum. the treadmill or today’s equivalent) and out of sight. I’d like to believe that we have moved on from those days and, like “allowing some guilty to go free rather than convicting the innocent”, they are an acceptable price to pay.
@Michael BG, to pick up on my point above about homogeneity and Joseph Bourke’s reference to Franklin D Roosevelt, I’m struck by this paragraph:
The difficult word in this paragraph is highlighted.
What constitutes “all”? Is it every citizen, regardless of whether they live in the country? Is it everyone living in the country, regardless of citizenship? What contributions should they have made, if any? If they haven’t, how do we decide whether that should be extended to everyone or not? Is it open to anyone who comes here? How do we determine who can come here, to what they are entitled, and where we draw the line? If we have completely open borders, as many in our party would like, what effect will this have on the social cohesion and solidarity needed for a collective national endeavour like you propose?
In extremis, if we have a wrap-around social contract for “the people of this country”, but we have no clear boundaries as to what this means, do you not think, as we see, that the Social Contract can be put under sever pressure (both financially and socially) to the point where it breaks down?
@ Michael BG,
“you’ve not answered my question”
Not this tired old cliche again! You know very well what my view is. I don’t like the idea of “benefits”. Period. They should be gradually phased out for everyone who is capable of working and be replaced by a Job Guarantee at a living wage.
The LibDem version of the well known Marxist quotation seems to be “To each according to their needs, from each nothing much at all unless they feel like freely volunteering their services”
It’s a nice idea which just won’t ever gain anywhere near enough public support. You’d have to be well steeped in 21st century Lib Dem ideology to ever think otherwise.
Poverty in the UK is getting worse. Median income for the poorest fifth of people FELL by 4.3% per year over the two years 2017 to 2019, the Office for National Statistics reported yesterday. though having grown in the previous four years by 3.4%. At the same time as the poorest fifth became poorer, median income growth merely stalled, growing on average by 0.4% per year in the two years.
Why isn’t this headline news? It should be for our party. I will write to Ed Davey, and ask any member with any influence to contact him about this, asking for a statement. I heard this mentioned by Polly Toynbee on the Today programme this morning.
I was struck by a comment that John McDonald made during the election campaign about building stability into the social security system so that it can survive successive changes of government.
The war on poverty introduced by United States President Lyndon B. Johnson in 1964. was a response to a national poverty rate of around nineteen percent despite the post-war economic boom. Congress passed the Economic Opportunity Act, which established the Office of Economic Opportunity (OEO) to administer the local application of federal funds targeted against poverty. The forty programmes established by the Act were collectively aimed at eliminating poverty by improving living conditions for residents of low-income neighborhoods and by helping the poor access economic opportunities long denied them.
As a part of the Great Society, Johnson believed in expanding the federal government’s roles in education and health care as poverty reduction strategies. These policies can also be seen as a continuation of Franklin D. Roosevelt’s New Deal and the Four Freedoms of 1941. Johnson stated, “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it”.
The legacy of the war on poverty policy initiative remains in the continued existence of such federal programs as Head Start, Volunteers in Service to America (VISTA), TRiO, and Job Corps.
Deregulation, growing criticism of the welfare state, and an ideological shift to reducing federal aid to impoverished people in the 1980s and 1990s culminated in the Personal Responsibility and Work Opportunity Act of 1996, which President Bill Clinton claimed “ended welfare as we know it.” These ideas were picked up by Blair/Brown with the introduction of workfare and ultimately the development of Universal credit.
Beveridge’s contributory principle and universality of benefits were important foundations of the social safety net and their erosion has led us to where we are today. It is one of the key reasons I would support a UBI (negative income tax) and Universal basic services like pre-school childcare.
Child rearing in the early years is a full time job in itself and something we need to be able to adequately support with family allowances and access to nursey.childcare for child development,
@ Katharine,
“Poverty in the UK is getting worse. Median income for the poorest fifth of people FELL ….. the poorest fifth became poorer, median income growth merely stalled, growing on average by 0.4% per year……”
Yes this is all true. BUT even the poorest fifth of the people are more likely to be in work than having to rely on social benefits. So why isn’t there at least the same level of discussion about low wages as there is about low benefit levels?
I know I do keep on banging on about neoliberal economics and how this kind of misguided thought actually causes the problems that concern many Lib Dems but that’s what it does come down to.
” I will write to Ed Davey, and ask any member with any influence to contact him about this, asking for a statement. ”
Well good luck with that! The Lib Dem election manifesto was probably more neoliberal than the Tory one! Mr Davey himself made what he could out of “uncosted spendthrift Tory promises” ! You’ll get nothing more than lip service from him.
https://www.taxresearch.org.uk/Blog/2019/11/17/the-libdems-are-promoting-the-most-hard-right-neoliberal-callously-indifferent-economic-agenda-of-any-mainstream-party-in-this-election/
The Resolution Foundation published an in-depth evaluation of the social security system last November https://www.resolutionfoundation.org/app/uploads/2019/11/The-shifting-shape-of-social-security.pdf including the Party manifestos:
“…the Liberal Democrat package is … more progressive, with the poorest 10 per cent of households almost 25 per cent better off in 2023-24 relative to today’s position.
In terms of what differentiates the Liberal Democrats from Labour, the former party has avoided further pensioner spending, while planning to improve UC for second earners and the self-employed, in ways that the Resolution Foundation has previously recommended.
It is notable that both the Labour and Liberal Democrat approaches could be expected to halt potential increases in relative child poverty over the next parliament. We forecast
that under current policy plans (i.e. the Conservative package) child poverty will rise from 29.6 per cent in 2017-18 to 34.4 per cent in 2023-24. Under Labour, this figure would be 30.2 per cent (entailing 550,000 fewer children in poverty), and under the
Liberal Democrats it would be 29.7 per cent (entailing 600,000 fewer children in poverty). So on social security, as in other areas of spending, there is a stark choice between the Conservatives and the two opposition parties at this election.
The two largest parties appear unwilling to face up to the realities of how pensioner and working-age living standards have shifted, opting for further relative increases in pensioner generosity in the coming years. And no one is considering how the welfare system can better support pay progression, or acknowledging the growing importance of assets to living standards. Those conversations may be avoidable in the campaign itself, but whoever wins the election will need to face up to them over the course of the next parliament.”
TCO,
If a person of working age chooses not to look for work or train to get a job then the state should still provide them with enough money for their basics – food, clothing and shelter in the same way that the state tries to encourage people not to kill themselves.
I still have the impression that you actually agree with this because you stated that the woman with the four children in your hypothetical example should receive benefits and not be made homeless. Therefore it seems that while you empathise with the neighbours who thinks it is unfair that she has four children and they don’t, you don’t believe the state’s policy should be changed in any way to deal with this perceived unfairness. Please can you point out if I have misunderstood your position with regard to your hypothetical example?
You have misunderstood what the state would provide in our new social contract. As in the old one it doesn’t provide everything. It doesn’t provide a home or guarantee of a job. It provides a floor which people cannot drop below. I think a majority of people would agree that the state should provide the basics for people and ensure no one in the UK has not enough money to live on and that the state should provide the conditions for people to get on in life.
If a majority will not support these aims then they will not be enacted by government. As the saying goes you can take a horse to water but you can’t make it drink. If a majority do not want a caring society where everyone has enough to live on and people are supported to reach their full potential then they can vote for a different political party.
You say you are a member of the party so I don’t understand why you don’t want to build a society in which no one lives in poverty, no one is held back by lack of education and training and one in which everyone can develop their talents to the full. Can you explain if you don’t share this vision why you are a member of the party?
Please can you point out which of your posts answers these questions – ‘Please can you state what extra obligations you think people should meet to receive benefits, to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?’
Peter Martin,
I don’t think you have posted an answer so clear as your answer today. I didn’t know you wanted benefits phased out so if a person does not take up a guaranteed job then they would receive no benefits and I assume be allowed to die. Also we must assume that an employer of someone on a guaranteed job has to put up with them no matter how useless they are at the job as the alternative is they would receive no money and so be allowed to die. In the past you have said that being on your guaranteed job scheme was voluntary, now you have made clear it is compulsory as the state is using a huge strict to ensure compliance. It seems a lot like Communism in which the state did not recognise people as unemployed as it would provide a compulsory job for everyone.
I realise that you believe that people need the incentive of living in poverty to make them get a job. Liberalism has a different position. Liberalism assumes that even if the safety net is provided with no strings at the poverty level most people will still wish to get a job.
However, you have not answered all of my specific questions. The outstanding ones are – what extra obligations you think people should meet to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?’
While the Liberal Democrats don’t have an aim for what the National Living Wage should be I have and I did try to get the party to include it in our policies. But I failed.
If benefit levels are increased to the poverty level then not only would those not in work be raised out of poverty but so would everyone in work as the system tops up low paid workers’ wages with benefits. The issue I have is the amount a person can keep before they start to lose their benefit. I think it should be at least £50 a week. For people who are not in the limited capability for work group and who have with no children the amount is zero.
Joseph Bourke,
Do you think it is inadequate that our welfare polices as set out in our manifesto would have increased child poverty by 0.1% rather than reduce it over the next five years?
@Michael BG “Please can you state what extra obligations you think people should meet to receive benefits”
A good place to start for all of this is Beveridge.
His view was that unemployment benefit ‘will normally be subject to a condition of attendance at a work or training centre after a certain period’, and I think that’s a good place to start, don’t you?
“to receive the health care they need.”
The UK health system is skewed. It’s not actually a health system at all, but an illness crisis system that takes no account of self-preventative measures. Probably the best thing to do would be to adopt the European social insurance model, so that lifestyle choices require higher premiums.
“to receive the education”
We already have an education system, it’s just not very good. Make it stop at 14 and self selective thereafter.
” and training they need to get a job,”
See the above. CTCs for vocational training, other types of schools too.
” to have a job,”
There are plenty of jobs but not everyone wants to do them. I presume you were against Brexit? Free Movement tends to mitigate against this.
” for there to be enough homes for everyone?”
A lot of homes are inificiently distributed. Taxing boomers in their large windfall houses, and a proper implementation of the spare room subsidy would go a long way to help here.
Michael BG,
The Resolution Foundation report linked above concludes:
“The cash benefits and tax credits that make up our social security system – equivalent to around 10 per cent of GDP – have evolved and grown over the past century, and are set to continue growing over the next fifty years.”
This being the case a higher proportion of economically inactive workers will need to be brought into the workforce to support the dependent population.
There is a distinction to be made between inequality (relative poverty) and material deprivation (absolute poverty). Persistent poverty (being in “poverty”) this year and two of the previous three years. is virtually unknown for children in households with at least one working parent https://www.acton.org/publications/transatlantic/2017/07/24/most-effective-way-reduce-child-poverty
“The rate of persistent poverty for children in households that have had someone in work in each of the last four years is just 5%,” the [IFS] report states. “On the other hand, children in households that have had no one in work for at least three of the last four years account for slightly over 40%.”
This is why employment (including job guarantee employment for long-term unemployed where persistent poverty may be prevalent) and not an overreliance on the social security safety net is likely to be the most effective means of reducing child poverty to low levels. For single-parent families, this necessitates affordable childcare provision (preferably free as per the LibDem manifesto). Not every single parent will be able or willing to take up work and social security should provide for an adequate level of subsistence in the early years of childhood. Social security is not, however, designed to address relative inequality. It is safety net to keep people from falling into absolute poverty and not having a means of subsistence. To address inequality, we have to look at investment, productivity and relative wage levels as well as redistributive land and tax reform, not simply welfare policies.
@ Michael BG,
“Phased Out” doesn’t mean an immediate end to unemployment and other benefits. I do recognise that once people have been without work for an extended period they do become increasingly unemployable. A person who’s been living on the streets for a few years and/or fallen into drug and alcohol addiction is quite likely to be of not much use to anyone anytime soon. Its not realistic to give those who have been damaged in this way any kind of ultimatum.
The idea of the job guarantee is to provide that floor to stop the rot that invariably sets in when society rejects certain individuals. They are rejected not just in being deprived an income but being deprived of being asked to make a contribution too. The whole neoliberal concept of having a “reserve army of labour” is flawed. The “army” isn’t an army at all. It becomes increasingly useless the longer it is inactive.
So the process has to start with the young. We do what we can to keep them on the rails.
Joseph, we are drowning in verbiage here. If inequality is relative poverty as suggested in your quotation, what on earth is relative inequality? I would have liked some suggestion of why the median income for the poorest fifth of the UK population fell by 4.3% per year between 2017 and 2019, while everybody else’s more or less stalled. I should like to know what you, who believe that the problem of high and rising rents may be one of the main causes of poverty, suggest that our party should do about that. I am glad to know that our Manifesto promised there would be less child poverty increase if our policies were followed than under Labour proposals, and very much less than under the Tory proposals – predictably – but I would like to know that we will not be ready to accept, much less admire, a rise of nearly 30%. We have to get a grip on the realities of poverty and keep campaigning against it and bettering our proposals, or we cannot claim to be a progressive party any longer.
Peter Martin,
I am not so sure that there is a neoliberal concept of having a “reserve army of labour”. If Priti Patel’s comments are anything to go by the government is relying on 8.5 million ‘economically inactive’ people in the UK to fill labour shortages arising from new immigration rules https://www.independent.co.uk/news/uk/politics/priti-patel-immigration-uk-home-office-construction-farming-work-a9345151.html
The problem with this strategy, as the article notes, is “official figures from the Office for National Statistics show that the 8.5 million 16- to 64-year-olds currently not seeking work include around 2.3 million students and 2.1 million long-term sick, as well as more than 1.1 million who are retired and 1.9 million who are looking after their family or home. Fewer than 1.9 million of the total were recorded as wanting a job (if they could afford the childcare and travel costs involved with taking one or fit in some part-time work around their studies).
TCO,
Thank you for answering some of my questions.
You haven’t addressed this – ‘I still have the impression that you actually agree with this because you stated that the woman with the four children in your hypothetical example should receive benefits and not be made homeless. Therefore it seems that while you empathise with the neighbours who thinks it is unfair that she has four children and they don’t, you don’t believe the state’s policy should be changed in any way to deal with this perceived unfairness. Please can you point out if I have misunderstood your position with regard to your hypothetical example?’
I too think those unemployed for a six months should be given training or a job guarantee to keep their skills up to date and make / continue to make them employable. However this should be voluntary and should be suitable for the person concerned and there should be no threat of people losing their benefits if they don’t attend, but instead they should be paid more, say £50 a week and their travel expenses. For a single parent how old should their youngest child be before they have to attend a full time training course or lose their benefits? If a person declined training and/or a job guarantee would you stop all their benefits? And if so would you be content if they died of starvation? And if not what measures do you think should be taken to stop them from dying of starvation?
If a person can’t afford the health premiums do you think they shouldn’t receive free health care? And if so would you be content if they died because they didn’t get the health care they needed?
Are your City Technical Schools providing free education and training or are parents expected to pay when their child turns 14? Do you think all adults should receive free training? Do you think unemployed people after a certain period should receive free training? Should the training be something they want to do?
Are you happy that the economy is managed so the government is content with a pool of unemployed people of about 5%? If so why should the 5% not receive benefits?
Do you think there are enough homes in the UK for everyone who wants one of their own to have one? And if not should the government provide more social housing?
Katharine,
Looking at Norway which has low levels of child poverty https://sciencenorway.no/forskningno-norway-poverty/economic-equality-is-the-best-way-to-combat-child-poverty/1444609
Kalle Moene, professor of economics at the University of Oslo, says “Politicians can use economics to understand which measures are most effective in combating poverty, including child poverty.
“You might think that directing welfare budgets towards the most vulnerable groups in society would be the most effective way to fight poverty. But our economic research shows that this kind of targeted approach isn’t politically sustainable. Funding for targeted programs tends to evaporate when sympathy for those vulnerable groups disappears,”.
“Regulating rent is better than providing housing allowance. Moene believes that universal measures offer much more support, both to the poorest households and society as a whole.”
“Politicians keep resorting to the approach of proving the need for child benefits and other welfare schemes. But we need to move in the opposite direction, towards providing more basic rights to the individual. That’s how we’ll achieve politically viable measures that don’t split society into givers and takers,” he says.
“It’s impossible for a family on a single income to live in Oslo today,” Moene adds.
He believes it would be better to regulate city rents instead of providing housing allowances to poor families. “A lot of people would benefit from a measure like this, and it would be particularly helpful for poor families with children,”
I am of a similar view – that universal basic services such as childcare and universal benefits such as a negative income tax coupled with increases in minimum wage levels (to the levels recommended by the Resolution Foundation) and job guarantees for the long-term unemployed are likely to be both more effective in addressing child poverty and more sustainable in the long-term.
Trying to increase Housing benefit payments to keep up with private sector rent increases is also likely to meet with political resistance and never be quite enough. I think what is needed is investment in green infrastructure and public housing at affordable rents with land tax reforms to reign in house price inflation across the board – measures that would benefit everybody. This would give us a more robust platform for tackling economic inequalities and garnering support from generation rent.
Joseph Bourke,
You didn’t answer my question. I’ll rephrase it. From your post should I assume that you are happy that our policies would increase the number of children living in poverty by 0.1% over the next five years? Would you be happy if our policies always increased child poverty by 0.1% over every five years? Why do you think these are adequate policies?
Peter Martin,
It is not clear if you are trying to row back on your position of ending benefits for all who are capable of work. Are you saying that everyone can receive benefits for a certain time and some people depending on what social problems they have might be able to stay on benefits longer?
(Please note I think those unemployed for six months or more should be given training or a job guarantee to keep their skills up to date and make / continue to make them employable. However this should be voluntary and should be suitable for the person concerned and there should be no threat of people losing their benefits if they don’t attend, but instead they should be paid more, say £50 a week and their travel expenses.’)
Please you can answer some of the questions I am asking TCO – How old should their youngest child be before a single parent has to take up a job guaranteed job? If a person declines a job guarantee job would you stop all their benefits? And if so would you be content if they died of starvation? And if not what measures do you think should be taken to stop them from dying of starvation?
You still haven’t addressed my questions regarding your issues about the other four-fifths of our new social contract – ‘what extra obligations do you think people should meet to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?’
Michael BG,
you will have to be more precise – policies or welfare policy only? Relative poverty, absolute poverty or persistent poverty?
I am happy with the plans to improve UC for second earners and the self-employed and the Resolution foundation conclusion that “…the Liberal Democrat package is … more progressive, with the poorest 10 per cent of households almost 25 per cent better off in 2023-24 relative to today’s position.”
As per the comments above, I think on welfare reforms the party’s policies have moved in the right direction, but there is further work yet to be done in developing a comprehensive approach to addressing inequality and economic security.
Joseph, thank you for replying more directly to me, quoting the Norway example with which you agree. You are good at finding diverse examples for our consideration. I feel sure you are right about the need to provide public housing at affordable rents, but I am not clear how free our councils are to provide them, and to be able to buy land retained by the house builders. Do I take it that our party is not likely to accept rent controls on private rented housing now? Yet some controls on that provision there surely must be? I am thinking of the empty office blocks turned profitably into temporary dwellings for the people unable to afford private rents now in London. Do we not need radical measures, government measures, to tack;e the rental crisis that is so relevant to poverty levels? Such as banning the retention of property in cities which was built for human habitation but is retained for speculative purposes? Can you further party policy for the adoption of such radical measures? I take your point about the limited efficacy and ever mounting cost of Housing Benefit.
You want ‘universal basic services’ to replace many benefits eventually, if I read you correctly. and you instance child care. Our party is strong in wanting to increase both parental income and care for small children, and of course the Marmot Review takes a similarly strong view of giving children in England the best possible start in life. I think it an interesting convergence of views (and ours I am sure not only developing because Jo Swinson has small children!), which shows an acceptance of the value of our country producing many infants, and the imperative then of taking great care of their health and development. It was a pity so many Children’s Centres were closed.
Joseph Bourke,
The 0.1% is the one you quote if it is not precise it is not down to me. I was happy to read that you think more needs to be done to combat child poverty and poverty generally than the party is currently proposing.
A Universal Basic Income will not solve poverty and will be expensive. Long term we should have one but we should be planning on ending relative poverty before a Universal Basic Income at the poverty level is introduced. I am not convinced that universal free childcare is the answer. Providing free services to everyone is expensive and is not liberal. Providing the money instead is liberal as it allows each person to choose what to spend the money on. Building 3.1 million new social homes in 20 years as suggested by Shelter along with the necessary steps to make it possible will help keep housing benefit under control.
@ Joe B.
‘I am not so sure that there is a neoliberal concept of having a “reserve army of labour”.’
It’s based on the concept of the NAIRU. Then there’s the supposed “Natural Rate” of unemployment. It’s not something that politicians are keen to acknowledge but I have seen Mark Carney refer to the term. It dates back a few years and there’s been a substantial effort to replace unemployment with underemployment which is why we now have such a problem with “in-work” poverty. So maybe we should have an extra U in the form of the NAIRUU?
https://www.economicshelp.org/blog/glossary/the-difference-between-the-nairu-and-the-natural-rate-nr-of-unemployment/
@ Michael BG,
You keep banging on about the unfairness of the JG but it’s just an extra option. At present there is a requirement that those who are seeking Jobseeker benefits should actually be , er, jobseekers. That won’t change.
Or maybe you think it should? Do wish to rename the JS allowance so that it becomes an allowance for anyone who hasn’t got a job but wouldn’t mind receiving some extra spending money?
@ Michael BG,
“Providing free services to everyone is expensive and is not liberal. Providing the money instead is liberal as it allows each person to choose what to spend the money on.”
This comment shows just how out of touch many Lib Dems are with current popular sentiment. It’s quite likely that the majority of recipients will do the right thing but, certainly, a substantial minority will not. They will spend money on all the wrong things. Drink, holidays, gambling etc. They will bring any such scheme into disrepute very very quickly. You must be living on a different planet if you think otherwise.
If you want to provide free childcare then just provide it!
Inequality and failings in child health have been revealed this week by the Royal College of Paediatrics and Child Health. A report from the College says that Britain lags behind other European countries in child health. Mortality rates for babies under one, levels of obesity and vaccination here are comparatively poor, or stalling in their progress, and Britain is falling behind other high-income countries on many such indicators of child health. Details are given, and a co-author of the report, Dr Ronny Cheung, commented that infant mortality is a globally recognised sign of how well a country is looking after the health of its citizens. An NHS in England response was that there had been a reduction of the stillbirth rate by 21 per cent between 2010 and 2018.
The State of Child Health report, covered in an article in The Times on March 4, also found that children from disadvantaged backgrounds suffered up to four times worse health than those from less deprived families. It points out how child health has been ‘seriously affected’ by deep cuts in local authority budgets, and records that more than four million children in the UK now live in poverty.
Peter Martin. Thank you for responding on March 6 to my earlier post about Poverty getting worse, Peter, but it is strange that as a socialist you reference a right-wing rant, even though your favourite role is as an agent provocateur </i) on this site. If there is anything in the rant, I will ask Michael to respond to it, but it was obviously out of date anyway, as the 'Remain bonus' my party hoped for did not materialise. I hope our current party leader will be able to back the Social Contract idea, to which even you are sympathetic.
As to your remark about low wages, if we are likely to complain more about inadequate benefits, that is clearly not only because there is serious suffering caused by the handout of limited benefits, with the hopeless insensitivity displayed in the roll-out of Universal Credit compounding the hardship, but also because it is not in the government's power to influence employers delivering only the statutory minimum wage. We should certainly as a party be looking for an enhanced National Living Wage, however.
Accidental transference of most of that comment into italic, not intended!
@ Katharine,
“it is strange that as a socialist you reference a right-wing rant” ??
You mean Richard Murphy? He’s not right wing. He’s the guy who was behind the original “Corbynomics”. He was justifiably a bit miffed that JC and JMcD lifted his ideas without crediting him for it.
He’s closer to the political centre than I am. Especially if his support for EU membership is anything to go by. So, whereas we largely agree on economic issues we disagree on the not-so-little matter of EU membership. I have to say that he banned me from his website at one time 🙁 I must have got under his skin when I made the case a little too forcibly for his liking that it was quite contradictory to support such a neoliberal/ordoliberally based political structure and hold the economic views he claims to.
But I’m OK with that! I don’t hold grudges 🙂 His claim that the Lib Dem economic policy as laid out in your manifesto was “economic illiteracy” is sound enough so I have no problem referencing his article.
PS. I sometimes have the same problem with formatting too. We really need a preview function or the ability to edit comments for say a couple of minutes after posting them.
Katharine,
The ONS bulletin (https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2019) states, “The recent downturn in income for the poorest fifth of people in part reflects that a larger proportion of their household income is composed of cash-benefits, where many, … are frozen at their FYE 2016 values.” It could be added that the reduced benefit cap introduced in 2015 also decreased the incomes of those not in work receiving housing benefit. The party could use this as evidence for our policy of increasing the benefit rates to their 2015/16 real value and scrapping the benefit cap.
Peter Martin,
I have never said a Job Guarantee scheme is unfair. I just keep saying it has to be voluntary, but you want to force people to take a guaranteed job and I don’t. I expect it is because I am a liberal and you are not.
I do think that if a person is claiming Job Seekers Allowance they should be seeking a job, but I don’t think they should face sanctions for not jumping though the DWP’s hoops.
I do recognise that the majority of British people are not liberals and do not have a liberal view of people.
On 5th March at 3.20pm you posted with reference to TCO’s hypothetical single parent with four children, “We shouldn’t hold children responsible for any perceived misdeeds by parents. Instead, we should look at ways of making it possible for single parents to continue working” which seems to imply that you don’t think this mother and four children should receive no benefit and be made homeless if she isn’t working.
You still haven’t answered these questions – ‘How old should their youngest child be before a single parent has to take up a job guaranteed job? If a person declines a job guarantee job would you stop all their benefits? And if so would you be content if they died of starvation? And if not what measures do you think should be taken to stop them from dying of starvation?’
Why have you not answered the questions about four-fifths of our new social contract as you had written you were worried – ‘what extra obligations do you think people should meet to receive the health care they need, to receive the education and training they need to get a job, to have a job, for there to be enough homes for everyone?’ If your objection is to only one part of our social contract – the ending of relative poverty in the UK then you could just say so.
@ Michael BG,
You seem determined to cast me in the role of a villain who wants to condemn those who won’t take a job to starvation.
Let’s start by taking a look at how the present system works. I’m sure you would agree this is much more important than any ideas I might have about improving it. Say a person persistently refuses reasonable job offers. Their benefit is stopped. Right?
Are you saying it shouldn’t be? How likely are the Lib Dems to change their policy on the voluntary nature of employment? Not very, I would say. I’m sure the official Lib Dem line will continue to be that, yes, employment is voluntary but it is unreasonable to pay out Jobseeker allowances to those who aren’t really jobseekers. So if I’m a heartless villain then so are those senior Lib Dems who set party policy.
Peter Martin,
you write above “The Lib Dem election manifesto was probably more neoliberal than the Tory one!”
I like Richard Murphy and his heart is in the right place. He wrote a good paper last year https://www.taxresearch.org.uk/Blog/2019/10/07/from-modern-monetary-theory-to-modern-taxation-theory-a-debate-to-be-had/
He writes: “Tax is key to the success or otherwise of modern monetary theory in practice. To date its importance has been underplayed and under-appreciated. If modern monetary theory is to succeed therefore, it has to be paralleled by a more expansive form of modern taxation theory, aided by tools such as tax gap appraisal and tax spillover assessments.”
” I have for a very long time suggested that MMT has not taken tax seriously and that this has been a major weakness within it.”
He is, however, rather impatient with somewhat straightforward questions.
A straightforward question to ask (given a set of economc circumstances) – Is how will an MMT budget approach differ significantly from the current method of economic forecasting?
The UK economy is made up of fairly consistent elements, at least in the short to medium term:
GDP £2.2 billion (80% services, 20% Industry & agriculture). Expected growth of 1% to 1.5%. Inflation target 2%. Base interest rate 0.75%. Unemployment rate 3.7%. Employment participation rate 79%. Average pay £505 per week. Main export markets EU and USA. Main import partners EU, USA and China. Trade gap 2%. Public Finances – Projected spending £900 billion (current 840, net capital spending 60). Estimated tax receipts £840 billion, planned borrowing £60 billion (3% of GDP).
So that is the question – in what ways will an MMT budget forecast and public spending program differ significantly from these public finance projections that underpin LibDem economic policy.?
@ JoeB,
“…. in what ways will an MMT budget forecast and public spending program differ significantly from these public finance projections that underpin LibDem economic policy.?”
The premise of the question is that MMT is an optional add-on. It isn’t. MMT is the theory of how a fully floating fiat based economy functions. So MMT has applied, most of the time, since the early 70s. If the Government wants to depress the economy then a knowledge of MMT is handy! It will tell you exactly how it should be done. The question you ask has to include what your policy objectives are.
The main problem with the conventional view is, IMO, that there is a reluctance to accept that govt spending creates govt revenue. So if we cut govt spending we cut the revenue too. The deficit is just as likely to increase as decrease. What matters is the inflationary.reflationary effect of the spending and not whether the spending is covered by taxation revenues. The classic case of misthinking on that can be seen in the late 80s when the Tory government ran a small surplus at the same time as inflation was heading back into double figures.
Richard Murphy is quite right about the importance of taxation. Although his point that “MMT has not taken tax seriously” is only valid insofar as some of the fringe supporters seem to run away with the wrong idea. The central authoritive figures ie Bill Mitchell, Stephanie Kelton, Randall Wray and Warren Mosler have it quite right, too, when they say that the function of taxation is to create a demand for the currency and act as a guarantee for the currency. It’s a protection against inflation, essentially.
So when there are the usual criticisms involving the examples of the Weimar Republic, Zimbabwe etc it is emphasised that part of the problem experiences by countries experiencing hyperinflation was caused by a failure of the taxation system.
Michael BG,
I think basic income offers a solution to the conditionality issue that arises with unemployment benefit.
If you’re claiming Universal Credit, you will get one basic allowance for your household. The amount you will get is: £251.77 per month for single claimants under 25. £317.82 per month for single claimants aged 25 or over.
This basic allowance is the basis for a Universal basic income. For those in employment/self-employment and not claiming Universal credit it would be paid by changing the tax and NI allowance to a tax reducer. Currently, allowances are given in three ways – Personal allowances and tax reducers or tax credits. Personal allowances and tax reducers do not give rise to tax refunds. They can only reduce the tax payment to Nil. For students in further education, this would replace maintenance grants and for carers, this would replace carers allowance without means testing.
This basic allowance would replace JSA/ESA/IS and would be neither means-tested or subject to conditionality or sanctions. All that is required is registration for universal credit which is subject to withdrawal based on level of income. This basic income can be supplemented by taking up a guaranteed job offer.
Child allowance and Child tax credits would be replaced with the under 25 basic allowance of £251.77 per child. Child and carers allowances would be only subject to withdrawal based on a higher income benefit charge for recipients earning over £50k per annum i.e. the current withdrawal rate of 63% of CTC would be eliminated.
Other means-tested benefits (including disability allowance would continue to be paid through universal credit subject to restoring the link between Housing benefit and local area rents as well as lowering the withdrawal rate to 50%.
The key virtue of basic income is its broad universality. While higher earners would not benefit the great majority of the population would receive some form of benefit by way of UC, student grants or tax reducers and a good deal of the means-testing, sanctions and high withdrawl rates that bedevil the current sysyem could be eliminated.
There will be some tax measures required. Reform of council tax on the basis of LVT would relieve tenants renting in the private sector from council tax and see Landlords assessed to tax on student accommodation that benefits from council tax examption.
Peter Martin,
“The classic case of misthinking on that can be seen in the late 80s when the Tory government ran a small surplus at the same time as inflation was heading back into double figures.”
Is this not what MMT would advocate. Running a surplus to take the heat out of inflation in the economy?
“it is emphasised that part of the problem experienced by countries experiencing hyperinflation was caused by a failure of the taxation system.”
How did failure of the taxation system contribute in any significant way to the hyper-inflation currently experience by Venezuela.? The fall in oil prices in 2014 hit export earnings causing large fiscal deficits, a drying-up of foreign direct investment and forcing a drawdown of its foreign reserves. The government has issued ever-increasing volumes of local currency debt to fund imports, but the more money it prints to fund imports, the more the currency depreciates and the worse the inflation gets.
President Maduro’s solution to chronic child malnutrition and economic chaos in Venezuela appears to be urging women to have six children “for the good of the country” https://www.bbc.co.uk/news/world-latin-america-51735025
“The key virtue of basic income is its broad universality”, you write, Joseph. Is it not the case that the key failing of the Universal Credit system is its inflexibility? Surely the non-regular lives of very many claimants, in and out of temporary and insecure jobs, or on zero-hours contracts, will make the attempt at its fair distribution likely to founder. If people already unable to earn enough to support themselves have any sort of crisis, such as the breakdown of key home equipment such as a washing machine or the gas boiler, or recurring illness and greater caring responsibilities, or a relationship breakdown possibly involving change of home, extra transport cost or necessary change of job – any of the upsets of everyday life – then the demands of one rigid system will rapidly cause personal crisis for the recipient. We see it already in the deep problems caused by the unthinking demand of them waiting far too many weeks – still five – for first payment, and the unreasonable granting of loans rather than extra payments, which only exacerbate the debt problems of recipients. The Commons work and pensions committee has said that up to a fifth of claimants are ‘swimming against a tide of unmanageable debt’. The Trussell Trust has reported that when UC is introduced to an area food bank usage soars by 52% in a year.
In this situation it ill behoves our party, which went along with the plan of Universal Credit, to show any complacency about its present usage or its future roll-out, or to fall back on planning ideal systems, when the benefit if a single person is only 14 per cent of average income, £73 a week, compared with the Beveridge benefits of 27% of average income. (Again, I am indebted to The Times journalist Jenni Russell for these figures, She also notes that the poorest fifth of the population have lost a tenth of their income.)
@ Joe Bourke,
“Is this not what MMT would advocate. Running a surplus to take the heat out of inflation in the economy?”
Well it’s a little bit more nuanced that that. If the economy ( let’s consider it to be closed for the sake of simplicity) is running hot and everyone is freely borrowing and spending, ie they are running a deficit, the government will be in surplus. The surplus is a consequence of the overheating rather than something which should be celebrated as an achievement. This was the situation in both the late 80s under the Tories and around the turn of the millennium under New Labour.
Alternatively if the economy is running cold and everyone else has no real appetite for borrowing and spending, they’ll likely be in surplus and the government will then be in deficit. The deficit is a consequence of an overcooled economy. This was essentially the position after the 2008 GFC. Cooling the economy further, as the coalition did in its early years, was a big mistake.
So the MMT advice is that looking at surpluses and deficits as a guide to Govt spending and taxation adjustments is a mistake. Fiscal policy should be tightened to slow down an overheating economy and loosened to speed up an over cooled one.
I said that having an ineffective taxation system was only part of the problem. If there’s been a war and production plummets there will be a definite other problems too. If inflation gets out of hand then it makes sense to delay paying your taxes. The longer you leave it the less you’ll need to pay. If enough people do this then inflation is likely to worsen. If there is a high level of corruption, with certain individuals and companies being allowed to evade the taxation system, then it falls into disrepute. Everyone feels it’s fair game to cheat the system.
So MMT does say that there does need to be a fair and effective system of taxation. Not to raise spending money for the government but to make the system work as it should. Silly policies made by the likes of President Maduro, who probably don’t understand MMT anyway, don’t negate the theory in the slightest.
Katharine,
Universal Credit (UC) is now fully rolled out across the UK for (most) new claims. Full service roll-out was completed in December 2018 meaning that UC full service is available in all parts of the UK. Migration from the legacy benefits system to UC will be undertaken over the course of the next three years and is expected to be fully completed by the time of the next election in 2024 or before. This is the system the next government will inherit.
Earnings information for employees is already collected in real-time and available to DWP for the administration of the UC benefits system.
Making tax digital is another program that is underway. This seeks to prepopulate Income tax returns with data that the government already holds including pensions income, taxable benefits, earnings from employment or self-employment, rents received, interest and dividends etc.
The IT infrastructure and data collection for the integration of the tax and benefits system is largely in place and this makes the transition to a universal basic income practical.
The level and timing of benefit payments and tax allowances remain political choices as they are now. However, as the Resolution foundation reports reference above notes “The cash benefits and tax credits that make up our social security system – equivalent to around 10 percent of GDP – have evolved and grown over the past century, and are set to continue growing over the next fifty years.” If child allowance and Child tax credits are prioritised to address child poverty (as in the example above) then spending choices have to be made elsewhere. If this means limiting the benefit for single people to current levels (equivalent to tax and NI allowances) and offering job guarantees as a means of supplementing income, I think that would represent a fair trade-off in keeping a basic income program affordable and tackling child poverty as a priority.
Peter Martin,
you need a means of defining what an economy running hot means. if it is inflation this was 4.61% in 2010 and 5.2% in 2011. If it is private sector borrowing this started to ramp-up in 2015 (after the coalition) and has returned to pre-crisis levels. This was the case in the late 1980s too when a housing boom took hold.
The only real way to determine if an economy is operating at full potential is an assessment of spare capacity in the economy as measured by unemployment of the factors of production whether labour or capital. Fiscal policy is then based on this determination. If there is significant cyclical unemployment or unused capital goods then an expansionary fiscal policy may provide a stimulus. Conversely, if there is low unemployment or limited capital capacity then stimulus may prove ineffective or counter-productive.
Norway and Venezuela had a similar per capita GDP in the 1960s and both have or had large oil reserves https://panampost.com/editor/2016/10/20/believe-or-not-venezuela-norway-as-rich/?cn-reloaded=1. Norway experienced double-digit inflation in the early 1980s but brought it under control and has since prospered. Venezuela. which had much larger oil reserves, has fallen into chaos. Corruption is undoubtedly a part of the problem in Venezuela, but Norway has had much higher tax rates than Venezuela and enjoys one of the highest standards of living in the world. Lessons to be learned surely.
I find it extraordinary, Joseph, that you are apparently happy with the current benefits system, including the payment to single people remaining so low, and presumably the five weeks’ wait for UC. There aren’t yet ‘job guarantees as a means of supplementing income, and UC claimants can only claim 37p out of every extra pound earned, above a low level of income. It is already party policy I believe that rates should be the same for the under-25s as for older claimants, but it seems from your post that you don’t agree with that.
Actually UC has not been fully rolled out at all, and the last I heard further roll-out had been suspended because of the widespread criticism. Two and a half million people are on it, and when it is fully rolled out, perhaps by 2023, some eight million are expected to be the claimants. So there is time for reform, for instance to cut down the waiting time to two weeks and to raise the basic rates, which I would hope our party will demand.
I take it you are not likely to be advancing a radical policy for dealing with the problem of excessive rental costs, which I asked you about, and which you rightly suggested are a major cause of poverty.
Katharine,
the post above is about a transition to a Universal basic income or guaranteed minimum income. The payment for single under 25s is equivalent to the tax and NI allowances that their peers in employment will receive. That’s what makes it Universal.
Full-service roll-out was completed in December 2018 meaning that UC full service is available in all parts of the UK not that all parts of the UK have transitioned from the legacy system.
The policy paper adopted last Autumn – A fairer share for all – says a Liberal Democrat government would pilot a scheme that offered a “guaranteed minimum income” through an “unconditional payment” of the standard UC allowance (currently £318 per month for a single adult over 24).
The conference also pledged to reduce the five-week wait for claimants to receive their first UC payment to just five days, while there would be an investment of at least £5 billion in improving the benefit system and all sanctions would be abandoned.
The policy paper ruled out the idea of scrapping UC arguing that “scrapping it and starting again when millions of people have now moved to the new system is impractical and would see more money spent again on administration rather than supporting people”.
On rental costs, ALTER’s current focus is on reform of the 1961 Land Compensation Act as a necessary condition for developing affordable housing and reform of council tax to a more progressive system. Party policy already includes boosting the local Housing Allowance by linking it to average rents in each area.
@ Joseph B,
I’m not sure where your figures come from but this reference shows slightly lower figures for inflation than you have.
https://www.statista.com/statistics/270384/inflation-rate-in-the-united-kingdom/
I agree that inflation is an important indicator. But we have to ask how it is measured. If inflation appears to jump because the £ has fallen, or decrease because the £ has risen it doesn’t really mean that the economy is running hot in the former case and cold in the latter case. There needs to be some way of correcting for this.
Growth is another possible indicator. The economy was growing well up to 2008 and then it flatlined afterwrads. So this should indicate that it wasn’t overheating when the coalition imposed unnecessary austerity measures. If they did think it was overheating I don’t remember them saying so!
Peter,
“You seem determined to cast me in the role of a villain who wants to condemn those who won’t take a job to starvation.”
It is you who has stated you want benefits for the unemployed scrapped. All I am asking is what happens to those people who don’t take a guaranteed job. Therefore you do need to consider what happens to these people and that is why I am asking – ‘How old should their youngest child be before a single parent has to take up a job guaranteed job? If a person declines a job guarantee job would you stop all their benefits? And if so would you be content if they died of starvation? And if not what measures do you think should be taken to stop them from dying of starvation?’ I expected you to give a considered answer not just ignore the questions and leave me and whoever reads these comments to believe that you are happy if people die when benefits for the unemployed have been scrapped.
I have always opposed the sanction regime. It has been Liberal Democrat policy to scrap sanctions since 2016. The only conditions an unemployed person should have to meet is signing on every two weeks and signing a declaration that they are available for work. If they make a false declaration they will have broken the law and will have to face the consequences.
Joseph,
I think you should write an article on your ideas for a basic income or negative income tax. A basic income is expensive and doesn’t do anything to end poverty. The poverty income level for a single person based on the Joseph Rowntree Foundation April 2016 figures is £157.62 a week for April 2019. Therefore setting the rates at £58.10 or £73.34 a week is far too low to raise anyone out of poverty. The amount for each child based on the Joseph Rowntree Foundation April 2016 figures is £84.13 a week for April 2019. Your figure is £26.03 a week short.
Yesterday you posted (7.31pm) saying that there are 8.5 million economically inactive people. The cost of paying the 2.3 million students and 4.1 million who do not have a long-term health condition is £22.586 billion. Even if we just count the 4.1 million this would cost £15.637 billion. As you are replacing benefits and not paying your basic income on top of all existing benefits this £15.6 billion will go to people who have no need for it because at present they don’t receive any means-tested benefits. Therefore I see this as spending £22.6 billion to give money to people who can do without it. I would rather use this towards the £26.267 billion needed to raise the adult benefits rates to the poverty level.
Michael BG,
this is Guy Standings’s report that has details of affordability https://www.progressiveeconomyforum.com/wp-content/uploads/2019/05/PEF_Piloting_Basic_Income_Guy_Standing.pdf
I think I have explained why universal benefits are preferable to means testing wherever possible.
It is already Libdem policy to offer student maintenance grants as well as additional bursaries for nursing students. An individual taking up an offer of a job guarantee will earn well above the poverty level of £157.62 per week. Families with Children receive a higher allowance as well as the combined child benefit/child tax credit allowance. This also retains the principle of shared responsibility for children between state and parents as advocated by Beveridge. Most low income families with at least one person in work will not be in persistent poverty.
The basic income is not paid to those not on Universal credit , not engaged as carers , overseas students or other economically inactive individuals.As with employees not claiming benefits, the economically inactive receive a tax reducer benefit. If they pay no income tax or NI they have no benefit that can be used.
Poverty is addressed by a combination of a living minimum wage, job guarantees, a guaranteed minimum income, Universal basic services that include childcare, child and carers allowances that are not subject to withdrawal at low rates of income, housing benefit in line with average rents and provision of affordable public housing.
@ Michael BG
I’ve already answered your question. It won’t be any different from what it is now. I’m not sure of what is expected of single mothers at the moment. Whatever it is it wont change for the worse. If we have 5 mothers and 10 children then maybe 2 or 3 can run a creche on JG and 2 or 3 will be free to do something else. Or they can take it in turns perhaps.
Can you answer my question on the current rules for a JS allowance? Do you think the availability for work rule should be scrapped?
Joseph, your answer to me elided the ideas of Universal Basic Income and Universal Credit. They are not the same. As Michael explains above, a Basic Income is expensive and doesn’t do anything to end poverty. You are also not quoting exactly the wording agreed in the Fairer Shares for All motion passed at Bournemouth last September, a motion passed in a debate which both Michael and I attended, and which Michael had tried to strengthen with several proposed amendments. (We had hoped to meet you at Bournemouth and were regretful to be told you had had to depart.) The exact wording passed was, ‘pilot a secure income guarantee to test the impact of introducing an unconditional element to the benefits system.’ That is clearly not the same as suggesting a Universal Basic Income – a concept which, by the way, was extensively, indeed exhaustively, discussed by Michael in the Social Contract threads which he and I posted recently on this site, with the Guy Standing’s report examined on the way, and I find Michael’s judgement, based on detailed financial calculation, completely correct..
The Universal Credit system remains separate, and in much need of reform. I accept I had forgotten the welcome decision of the motion to propose reduction of waiting time to five days, but at present claimants must wait five weeks. The difficulties the system has caused by its inflexibility I have suggested above, and I am disappointed you do not consider them. It is not, I would respectfully suggest, meaningful to talk of a full roll-out of the system, true for new claimants, when the total expected number of claimants is nearly eight million and the present total about two and a half million, so, as I wrote, there is time as well as need for reform. I have never suggested the complete abandonment of UC, contrary to what you seem to imply in quoting the wording of the policy, which I was fully aware of and agreed with in that respect.
Thank you for replying to some degree on the question of rents. I was aware of ALTER’s proposal to reform the 1961 Land Compensation Act, indeed surely needful, but the reform of council tax, at least meantime by revising the banding, appears to be urgently required. It is a pity that no radical proposal is forthcoming.
Joe,
Universal benefits are preferable to means tested ones, but they have to be set at the correct amount and the current benefit levels are not the correct amount. Even to remove everyone in work out of poverty the benefit levels need to be much higher. As I have said the poverty level for a single person based on Joseph Rowntree Foundation figures for April 2019 was £157.62 excluding housing costs. I have already pointed out that £84.13 a week is needed for each child on top of the adult amounts for a family to be living at the poverty level. I hadn’t realised that your universal income is not universal. I am surprised that the majority of people on benefits are excluded as you are transferring only those on Universal Credit and not those on the older benefits. Katharine says this is 2.5 million out of 8 million.
Do you know what rate we are saying the maintenance grant for students should be?
I missed any description of a Job Guarantee scheme in your post of 5.29pm 7th March. I note that Guy Standing attacks Job Guarantees. Please can you give the page numbers where Guy sets out the costs of any of his Basic Income schemes?
It is not Liberal Democrat policy to introduce a job guarantee scheme. I think it should be our policy to pilot one. I would do it in the North East region as it has the highest rate of unemployment. I would only pay £50 a week and travel expenses on top of a person benefits (which would be at the poverty level) and I would look to the old Employment Training scheme as my model.
If you wrote an article you could set out all the details of both your UBI and Job Guarantee scheme.
Higher minimum wages including regional rates for at least London, scrapping the benefit cap, scrapping sanctions and higher benefits are the way to remove everyone out of relative poverty. There being more homes especially affordable one is also needed. Do you support Shelter’s target of building 209,000 new social homes a year?
Peter,
You have said you want to phrase out paying benefits to people of working age not working who could work. Therefore the current rules are not going to apply because the current rules apply to benefits.
I think the current rules are that single parents do not have to look for work until their youngest child is five (seven in Northern Ireland) and only need to be available for work during school hours until their youngest is 12. (I think this last one is problematic and the school hours should include the time taken travelling to work. I don’t know what help there is with childcare costs for children over 5. You could increase the provision if required to cover all of the costs of the travel to work time.)
Benefits can be stopped if a person refuses to go on a government employment scheme. I think this is wrong. I thought in the past you said a person could refuse two Job Guarantee schemes and it was only after the third refusal that their benefits would stop? Is this still your position? If so then you don’t want all benefits phrased out.
I thought I had already made my position clear when I wrote, the unemployed should sign every two weeks “a declaration that they are available for work” and that it would be a criminal offense to made a false declaration, (I would add now) and down to a court to decide if the declaration was false not a DWP employee (so ending all sanctions).
Katharine,
I have attempted to show how universality can be partially restored by integrating the tax and benefit system. The last manifesto allocated quite large sums for welfare provision – around £12 billion for Universal childcare, £1 billion for child centres and (if I remember correctly) a £5 billion budget for enhancing the generosity of benefits.
How the £5 billion budget is allocated is a matter of determining priorities. The minimum income guarantee of £317.62 per month applies to 18 to 25 year olds. However, at present the combined child benefit and child tax credit is, I believe, on average around £60 per week. If that is increased further then other areas such as lowering the withdrawal rate will be impacted.But that is a matter of choosing funding priorities.
The minimum income guarantee and the tax and NI allowances can be equalised so that the great majority of the population are receiving a universal benefit at no additional cost to taxpayers. So too can child benefit and child tax credit be combined into a single universal benefit per child and only reduced when income exceeds £50k. As per my reply to Michel the minimum income guarantee is not intended to give everyone an income based on 60% or more of average earnings. That. however, can achieved by offering job guarantees at an increased minimum wage and providing childcare services, so that single parents can choose to work if that is their wish, as well as reestabilishing local housing allowance based on average rents.
Council tax reforms are currently being considered by a committee of Scottish MSPs including LibDems and will inform further development of work in this area going forward.
Many of these enhancements are already party policy and a program of Universal benefits can be delivered within existing funding proposals as per the recent manifesto.The issue of whether the funding allocated in the last manifesto is generous enough or should be increased further is a separate consideration for future manifestos.
@ Michael BG,
‘the unemployed should sign every two weeks “a declaration that they are available for work” ‘
I’d say it was only necessary once. But that’s just a minor detail. It’s good that we are finally in agreement!
I’m flexible about how the JG would work for those with family responsibilities. An obvious possibility is for the running of creches to be done by JG staff to free up others for different work. Also flexible on how choosy someone could be about the type of job they would be prepared to do. If someone loses a non JG job through redundancy they should be allowed a period of time to find another one.
The phasing out of unemployment and some other income related benefits could be a protracted process. There would have to be some temporary benefit to cover the those in transition. Other benefits, like sickness and child benefits can stay. Maybe even some housing benefits. These are details that can be worked out over a period of time.
@ Joe B,
“The last manifesto allocated quite large sums for welfare provision – around £12 billion for Universal childcare, £1 billion for child centres and (if I remember correctly) a £5 billion budget for enhancing the generosity of benefits.”
So this is £18 billion in total? And, to be cynical about it, politicians often wrap up 5 year spending plans into a single bundle to make the numbers sound higher than they really are. The GDP of the UK is approx £2 trillion. So by my arithmetic we’re talking about 0.9% of GDP if it’s £18 billion annually or less than 0.2% if we’re talking about a 5 year period.
The OP is about how society has stopped improving. And you think it would start again if a few crumbs were thrown out to the less affluent?
Peter Martin,
this is an overview of proposed spending increases https://www.bbc.co.uk/news/election-2019-50545673
Annual day to day spending increases +£36.8 billion by 2023-24. Investment spending +£26 billion. This is £61 billion per year – 3% of GDP and includes an average 3.7% spending increase for the NHS.
The spending also includes £13 billion on early years child development and an initial £5 billion rising to £10 billion over the parliament on working age benefits with rises targeted at low-income families in work and families with children https://www.ifs.org.uk/election/2019/article/liberal-democrat-manifesto-an-initial-reaction-from-ifs.
There are no job guarantees in the manifesto which would be the primary means of addressing persistent poverty associated with long-term unemployment coupled with increases in the minimum wage (20% increases for workers on zero hour contracts). However, provision of public childcare services makes job guarantees for single parents feasible.
Like all spending plans there are pressing demands for additional spending on health and social care, schools and policing, flood defences and public housing, local government funding and transport services, culture and sport as well as many other public services. Each area has to be allocated spending based on a determination of priorities and what is both practical and acceptable to the public.
The above discussion on welfare benefits and minimum income shows, I conclude, there is still much work to be done by our party to clarify and develop our thinking. At the moment we have vague ideas on ‘piloting a secure income guarantee to test introducing an element of unconditional element to the benefit system’, to quote again the motion passed at Bournemouth. How? Perhaps Michael’s idea of a pilot programme in the north-east region can be taken up, but there is no agreed plan. The Manifesto just gives a broad-brush approach: ‘Invest 6 billion a year to make the benefits system work’, and ‘Create a £50 billion Regional Rebalancing Programme’. What we need to create, it seems to me, is a new working group of experts, including Michael and Joe and people from the think-tanks and Joseph Rowntree Foundation, to work out the best programme for ending both relative poverty and regional unbalance.
It seems clear that actually to integrate a basic income plan – not a universal one – into Universal Credit will be very difficult. Meantime I presume the roll-out of UC will be resumed, so we need to be calling for its reform. with an end to sanctions, and, I would suggest, an end to loans – there should be a tide-over hardship grant possible where individuals lose their jobs and cannot immediately replace them, or they or their dependants fall into illness and need temporary care. In addition to the party policy of people only waiting for five days for first payment, there should be an immediate option of the payment of rent being made directly to the landlord offered to claimants.
As for the job guarantee idea, yes it is needed I believe, but it is clear much has to be worked out and agreed by our party, and this could also be usefully considered by a new working group.
Small correction – it should be ‘introduce an unconditional element to the benefit system’, not of course ‘an element of unconditional element’ – sorry for the typo.
Katharine,
I applaud your work and that of Michael’s in keeping welfare benefits and issues of poverty to the fore of thinking on party policy.
A tide-over hardship grant and an immediate option of the payment of rent being made directly to the landlord offered would be useful and pragmatic improvements to the Universal Credit system.
There is a budget due on March 11 and we will get a better idea of the direction of travel of the government and an opportunity for Ed Davey and other Parliamentarians to respond in the budget debates in the Commons and Lords.
With the continuing uncertainty around a free trade agreement with the EU and now exacerbated by the Coronavirus scare, it is not the time for restraint in public spending. The Chancellor will be forced to take action to support a rapidly weakening economy. With UK interest rates at historic lows and an average gilts maturity of 15 years or so, there is minimal risk to additional borrowing at this time. The tax funding proposed in the Libem manifesto can come later if and when inflation starts to pick up and after the country is back on a steady path of growth.
Seemingly strange things do happen. Hong Kong (not known for bold fiscal measures) has just sent out a one-off £1,000 to every citizen to spend as they wish as part of their economic revival package https://www.newstatesman.com/politics/economy/2020/03/global-economy-fights-coronavirus-helicopter-money-could-take.
“Tell him grants not loans, Ed!” I was inwardly shouting to our leader as I caught up just now with Andrew Marr’s interview with new Chancellor Rishi Sunak on his BBC show this morning. With his usual incisive questioning, Andrew Marr asked about how self-employed people who had to stop work and self-isolate because of the Corona virus in the coming months could be tided over financially. Mr Sunak replied that he would ensure that all vulnerable people would be protected, and said there were already short-term payments available in Universal Credit and he would be looking at that. Pressed by Mr Marr about people working in the gig economy who could similarly be left without means for a time, the Chancellor assured him that whether through Universal Credit or accessing Employment Support Allowance they could be helped.
Unfortunately, we know the sort of help available through UC, to tide people over till their first payment arrives – LOANS, which they find it all too difficult to repay out of their small payments, so that they often fall into debt. It seems all too likely that the kind of short-term help that Mr Sunak will seek from the DWP, and be ready to find funds for, will again be loans. So people existing hand-to-mouth, just managing to support themselves through small businesses or irregular employment, may also find themselves when employment resumes saddled with debt.
This isn’t good enough. Mr Sunak spoke of how strong the public finances are now. I ask Ed Davey to request generosity from the Chancellor towards people of tiny income temporarily deprived of it, and give them GRANTS. Further, will the Chancellor please make hardship grants generally available to people on Universal Credit, and consider whether the loans to people joining the system could also become grants.
Joe, thank you for your gracious comment, and for supporting the idea of tide-over hardship grants and for the option of direct payment to landlords. At least we can try to ensure that still more people don’t fall into greater poverty when they transfer to UC.
@ Katharine Spot on, Katharine……… and it’s a fair litmus test of what Ed Davey is made of as well as Mr. Sunak.
@ JoeB,
“With the continuing uncertainty around a free trade agreement with the EU and now exacerbated by the Coronavirus scare, it is not the time for restraint in public spending…”
Agreed.
“With UK interest rates at historic lows and an average gilts maturity of 15 years or so, there is minimal risk to additional borrowing at this time”
There’s never any risk at all! Interest rates are only low because the Govt wants them low. To some extent they are a product of market forces but once the Govt, in the form of their wholly owned central bank enters the market as the dominant player, they effectively come under the control of Govt. That’s what QE was all about. To force down the price, and therefore longer term interest rates, of long term gilts and other securities.
(cont)
“Like all spending plans there are pressing demands for additional spending on health and social care, schools and policing, …….. Each area has to be allocated spending based on a determination of priorities”
You’re still looking at public spending as piecemeal ie on a household basis. If I spend money on my house or car my income is likely to be unchanged. So my bank balance will fall. It’s not like that for Govt. If the Govt spends more on , say, flood defences that will mean the some of that extra money will come straight back as income and other taxes. Most will be respent in the economy meaning that it will be stimulated. This will have a knock on effect on all other spending. A more active economy will mean there is both a higher tax revenue and a less need for social spending which only seems to be needed now because wages and spending power generally are too low!
Americans ended up better off financially at the end of WW2 than they started off. They didn’t have to put on a financial squeeze so that they could pay off their war debts. Even in Europe it didn’t take too long for living standards to exceed prewar levels. This shows that money which looks to be superficially less well spent than we would like, can have beneficial effects. The only non beneficial effect is that it can create too much inflation which is where taxes come in handy!
“The tax funding proposed in the Libem manifesto can come later if and when inflation starts to pick up and after the country is back on a steady path of growth.”
Agreed. So you’re finally coming around to the idea that the main purpose of taxation is to control inflation rather than raise spending money for Govt?
Peter,
I have never looked at public spending on a household basis. I do, however, understand that business and consumer confidence are an essential component of a free market economy and need to be maintained during troughs in the business cycle or when facing large economic shocks such as Coranvirus. That essential confidence is enabled by financial planing of public finances and the maintenance of stability that includes maintaining the confidence of financial markets, particularly the domestic pension funds and overseas reserve managers that are the big investors in UK gilts.
It is worth recalling Keynes views:
“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
@ JoeB,
A couple of points:
1) Whenever have I said that governments should ‘debauch’ the currency? At the moment, the official inflation target is 2%. It is a target and not an upper limit. So even the neoliberals are saying that some ‘debauchery’ is in order!
2) Your quote comes from 1919. In the next 30 years or so Keynes changed his viewpoint quite substantially. Not that he ever advocated high inflation. The WW2 economy was largely run under Keynesian economic guidelines and with high Govt deficits. If Keynes had been taken at what some would say was his word, he should have been required to deliver a surplus on the basis that the economy was running close to full capacity. Even so, the level of inflation was moderate and always under control. The inflation problem was much more acute during WW1.
@ Katharine.
I listened to Rishi Sunak’s interview too. Or at least most of it. In the end I just couldn’t take it any longer. My TV set would have been at risk! Anyone would surely have picked up that those “we are working closely with the DWP to ensure….” type comments were trite and meaningless. Is anyone at all reassured that someone who’s on a ZHC and is feeling unwell in the next few weeks will not have the option of losing money, and possibly their job, or going in to work to spread whatever illness they might have?
Yes, I heard him say that ” the public finances are now strong”. That’s just nonsense. The Govt can neither have, nor not have, any money in the normal sense of the word. The economy is like the three bears’ porridge. It can be running too hot, too cold or just right. So which is it? That’s the only decision he has to make and make the necessary adjustments.
Peter Martin,
It goes back to the straightforward question posed earlier. How is an MMT approach to economic forecasting and budget planning different from the LibDem (and Labour) approach that adopts the Resolution Foundation fiscal rules https://www.resolutionfoundation.org/publications/totally-net-worth-it/ ?
“With monetary policy constrained by low interest rates, the new rules need to enable fiscal policy to play the lead role in supporting the economy in the event of shocks. But the rules also need to take advantage of the opportunities presented by low interest rates to address the looming economic, social and environmental challenges facing the UK. The rules also need to take advantages of recent UK innovations in fiscal reporting practices and fiscal risk analysis by taking a more comprehensive view of the public sector balance sheet and making more explicit provision for the uncertainty inherent in fiscal forecasting.”
The key elements adopted include:
– A Debt Interest Ceiling: to ensure the proportion of revenue spent on debt interest does not exceed 10 per cent. This would ensure that the overall debt burden remains sustainable at all times by taking account of not only the level of debt but also what it costs to service.
An ‘escape clause’: to recognise the need for more active fiscal policy given the constraints on monetary policy, the net worth and structural current balance targets would be suspended if the economic outlook deteriorates significantly. These rules would be reinstated as the economy recovers ensuring a credible fiscal framework even if downside risks crystallise.
The 2% inflation target is somewhat arbitrary and a good economic argument can be made for Nominal GDP targeting to ensure that both fiscal and monetary policy work in tandem rather than counter-balancing each other. However, whether an NGDP or inflation target is used, this is still economic forecasting within a rules-based fiscal framework.
Peter, agreed: it’s a poor look-out for those on minimal income in normal times, if they have also to do without it for a while because of Coronavirus, despite the fair words of the new Chancellor on the Marr programme yesterday. There’s an additional problem pointed out by Aditya Chakrabortty in Friday’s Guardian. He predicts that Wednesday’s Budget will be ‘another political triumph for Johnson and co.’ This is not only because the previous Chancellor had already budgetted for investment in the Midlands and the North, but also because George Osborne’s four-year freeze on increase of welfare benefits comes to an end next month. Any small increase in benefits may therefore be applauded, though as we know any small increase will be like giving the recipients a crust instead of a loaf – not nearly enough. Ed Davey should be prepared therefore to anticipate what the journalist calls the trumpetting there will be of ‘the last rites of austerity’, and tell the Commons that there is far more ground to be made up for the people subsisting on welfare payments and visits to foodbanks. Of course, having to budget extra for the effects of the Coronavirus will win the new Chancellor additional sympathy, but that is not a feeling which welfare recipients are likely to share.
@ JoeB,
” How is an MMT approach to economic forecasting and budget planning different…..”
For a start we don’t agree with such comments as “…. such rules are crucial part of the overall macroeconomic policy framework….”
They are more arbitrary than even the 2% inflation target. They are usually written with what might have happened in the last few years in mind, but then something invariably happens and they don’t make any sense any longer. The EU’s 3% limit on government deficits is a case in point. The 2008 crisis hit and government deficits naturally rose as economies slowed.
So the ‘fiscal rules’ dictated that Governments should be putting on the brakes when they should have been doing just the opposite. ie Pressing on the accelarator. The UK wasn’t subject the the rules to the same extent but still made the same mistake.
Joseph,
I think that you don’t seem to have the 2019 manifesto costings document. You should be able to download it from – https://d3n8a8pro7vhmx.cloudfront.net/libdems/pages/57307/attachments/original/1574351201/Stop_Brexit_and_Build_a_Brighter_Future_COSTINGS.pdf?1574351201 (arrived at from party website manifesto page). As I have already pointed out to you the manifesto promised that after five years £30 billion more will be spent on benefits – “Investing £6 billion per year to make the benefits system work for people” (page 64 of the manifesto). However in the costings document for the fifth year 2024/25 only an extra £9.43 billion a year is being spent on benefits (3.33 + 2.82 + 1.28 + 2 – items 2, 12, 13 and 14).
According to our costing document we would have by 2024/25 increased day-to-day spending by £62.92 billion, and income by £63.82. We don’t give a figure for investment, just a total of £180 billion for the five years. If increased each year by either £12 or £13 billion the new total by 2024/25 would be £59 billion.
If the £317.62 a month is your suggestion for your basic income this is £73.30 a week. The equivalent for the current Income Tax Allowance is £48.08. The cost to increase the National Insurance threshold to the same threshold (from £8,632 to £12,500 ) according to the April 2019 HMRC ‘Direct effects of illustrative tax changes’ is £11.16 billion (3868 /52 /2 x 300 million). £11.16 billion is no cost. This increases the equivalent rate to £76.92 a week. Of this just over £11 billion nothing goes to the poorest and few people will be raised out of poverty. You are right we should choose the right priority and this isn’t it. Increasing benefits so everyone is living at least at the poverty level should be our number one priority.
Peter,
I think you need to concede it is not possible to abolish paying benefits for those who could work but find themselves unemployed. You should concede there will always be a waiting period between being made unemployed and being forced to take a Job Guarantee job.
Indeed the figures given by Joseph Bourke are for the whole five years. I particularly liked our 2017 manifesto commitment of increasing spending on benefits by about £12 billion in the first full year of a Liberal Democrat government. The £30 billion annual increase of 2019 which we should have costed in over the five years minus the £9.43 billion we allocated in our costing document would have gone a long way to increasing benefits levels to the poverty level. I proposed that the party commit to ending relative poverty within 15 years assuming an increase in benefit spending of £5 billion a year. (I think I over estimated the cost by about £15 billion.)
Michael BG,
the £62 billion is one years spending, not cumulative. The annual amounts in respect of welfare and early years provision increases by 24/25 include the following:
Tackling in-work poverty 3,330
Early years and childcare 13,990
Extend free school meals 1,160
Restore maintenance grants 940
Tackling child poverty 2,820
Support for disabled people 1,280
Making the welfare system fairer 2,000
Total £25,520.
@ Michael BG I’m glad you posted the link to the Manifesto Costings document and I’ve taken the opportunity to re-read it but there were two problems :
1) The leadership appeared to campaign only on the Brexit bit and ignored the rest……
2) The rest…… the devil is in too much detail.
The rest …… was never summed up in simple phrases about tackling head on the twin evils of inequality and poverty, applying the moral imperative with a bit of passion in it. The then leadership either didn’t believe in it or they were too embarrassed by their personal Coalition legacy. To ruefully admit, ‘The Bedroom tax was a mistake’ in a sheepish way didn’t convince anybody.
Until the party can pick up the radical baton in a convincing way again it will continue to stutter into oblivion……. probably much more quickly than some people think.
It is evident from Michael’s rigorous examination of the figures that introducing a basic income for all would be very costly and raise few people from poverty. I agree that our party’s first priority should be to demand the raising of benefit levels so that everyone can live at least at the poverty level, even though it may take as long as fifteen years fully to achieve this.
Recalling the focus of this thread, there can be no health equality for those obliged to live in poverty, and the Marmot review shows how, in the words of its Conclusion, ‘in England health is getting worse for people living in more deprived districts and regions, health inequalities are increasing and, for the population as a whole, health is declining.’ We should be demanding of this government now, not only that benefit levels be immediately raised in the forthcoming Budget and steps be taken to reverse the recent two-year trend for the median income of the poorest fifth of people to fall, but also that the full socio-economic context of health decline and health inequality ably reported by Marmot be addressed. Our party should surely endorse this scholarly and wide-ranging report, of which the Conclusion says, ‘The purpose of the report is to show what can be done, in a spirit of social justice, to take action on the social determinants of health to reduce these avoidable health inequalities.’
Katharine,
I am afraid the figures are not so rigorous. Changing the personal allowance to a tax reducer restricts this tax relief to basic rate for higher rate taxpayers (earning between £50k and £125k). This offsets the cost of increasing NI thresholds and although not spelled out in the comments, can be further supplemented by measures such as unfreezing fuel duty in the effort to reduce carbon emissions or restricting relief for pension contributions to basic rate only.
I drafted a quick piece on the Minimum Income guarantee that I expect will be published tomorrow with a little more detail.
I hope I am still around in 15 years time to see Michael’s vision come to fruition. In the meantime, I will continue to make the case for pragmatic and deliverable measures such as the increase in personal allowances that benefit lower and middle income earners and were received so well across the board in the 2010 election.
Joseph,
I don’t understand why you wrote, “the £62 billion is one years spending, not cumulative”. I never said it was. As I pointed out there is only £9.43 billion for benefits.
Increasing the income tax for those earning above £50,000 is unlikely to pay for the cost of increasing the NI threshold to the Income Tax one. Plus the Income Tax Personal Allowance needs to increase each year more than inflation so the poorest don’t drop back into paying income tax. Remember medium earning is £29,600 a long way from £50,000.
Increases in the thresholds of Income Tax and NI do nothing for the very poorest in society. While increasing benefits would not only help those trying to live only on benefits, but all of the 8 million working poor who live below the poverty line. As liberals we need to ensure no one in the UK is living in poverty as we know living in poverty enslaves people.
David,
Indeed, with us saying we were going to spend about £12 billion a year on childcare, £10.56 billion on schools, £9.43 billion a year on welfare and promising to invest £180 billion over five years, we should have expected these to feature heavily in our general election campaigning.
Michael BG,
this is Peter Martin’s comment:
“The last manifesto allocated quite large sums for welfare provision – around £12 billion for Universal childcare, £1 billion for child centres and (if I remember correctly) a £5 billion budget for enhancing the generosity of benefits.”
So this is £18 billion in total? And, to be cynical about it, politicians often wrap up 5 year spending plans into a single bundle to make the numbers sound higher than they really are. The GDP of the UK is approx £2 trillion. So by my arithmetic we’re talking about 0.9% of GDP if it’s £18 billion annually.”
The total to welfare including childcare and student maintenance grants is 25.5 billion (1.25% of GDP) and the total increased spending is £62 billion annually (3% of GDP).
These are annual figures and far from “a few crumbs thrown out to the less affluent.”
Changing the personal allowance to a tax reducer restricts the allowance to basic rate relief. To get an idea of tax revenue there were 4.28 m higher rate taxpayers in the UK in 2018/19. The reduced tax relief is up to £2,500 per taxpayer. There is in addition to this employers national insurance of 13.8% on the NI threshold of £8,632. While relief might be given for smaller employers against increased NI, these two changes (that occur as a result of changing the personal allowance and NI threshold to a tax reducer) more than offset the cost of increasing the pay threshold for NI to £12,500.
Joseph,
Are you trying to say that your comment of yesterday of 9.21 pm was a response to Peter and not me? And then your percentages of GDP are addressed to him as well.
What is the tax relief that only the 4.28 million higher rate tax payers get? I know that £2,500 is 20% of 12,500 which everyone receives who earns more than £12,500. At the moment those earning more than £100,000 have this reduced and those earning over £125,000 have lost all of it. If the rate is increased to 32%, then the £2,500 is increased to £4,000 which would extend the clawback to £140,000. How many people earn £140,000 pa or more?
Michael BG,
the personal allowance of £12,500 reduces the top slice of your taxable income. If your income is between 50,000 and £150,000 you pay tax at 40%. For a taxpayer with £100,000 of income, the personal allowance will reduce his tax bill by £5000. For a taxpayer with £50,000 of income, the personal allowance will reduce his tax bill by £2500. Changing the personal allowance to a tax reducer means both will get £2500 relief. For those with income above £100k, the relief is phased out and is Nil above £125k. Taxapayers with income above £150k will pay tax at the additional rate (45%) on income above this level,
It is likely that £5 to £6 billion of tax reliefs will be recouped from this change and paid by those earing between £50kand £125. At least this amount will be raised from additional employers national insurance for larger employers (after allowing reliefs for smaller employers), covering in full the revenue foregone in employees national insurance from an increase to the threshold.
There is no impact on the public purse. It is a shift in the distribution of the tax burden from those with low and middle incomes to higher rate tax payers and larger employers.
@ Joe Bourke,
I appreciate the point you’re making about having a ‘tax reducer’ rather than a personal allowance. That’s an interesting suggestion. Do you know of any other countries which do it this way?
Another area of tax unfairness is the way those who run small companies can have their income classified as a dividend payment to reduce tax. Then there are the usual perks of having a company paid mobile phone and computer etc. Company owners can have their partners classed as paid employees, even if they don’t do anything!
I don’t think there is that much public awareness on all this but as you’re an accountant (?) you’ll probably know all the tricks. It could be argued that there is a case for keeping the system as is. But, there can’t be a case for keeping it all quite and away from public discussion.