Welfare manifesto watch: Labour

During this week, when most of the major UK parties are releasing their general election manifestos, I'll be taking a look at what each party is offering on welfare.  Despite being usurped by immigration and the health service during the past year, for the best part of the Coalition's time in government social security has been a major policy issue.  For their part, the Conservatives believed they were on the public's side when it came to tough reforms.  Meanwhile Labour has spent much of its time in opposition struggling to think about its response to the Coalition's welfare reforms.

Understandably then, Labour has not made social security a major theme of its pitch to govern.  It's not a platform the party believes it can win on, deducing that its reputation on welfare is so toxic that it will sacrifice less political capital through muffled whispering compared to any serious attempt to build a new welfare policy.

Continuity then, in the sense of further cuts or - at best - maintenance of existing support, is the first major theme of Labour's welfare proposals.  There are some policies here I suspect we'll see from either or both of the two governing parties.  These include:

• Capping Child Benefit for two years
• Means-testing the winter fuel payment
• 'Targeting' support at 18-21 year-olds and making it dependent on training.
• Supporting the household benefit cap and, in a measure that will worry the Left of the party, consulting on the regionalisation of the cap.
• 'Devolving' the Work Programme to a more 'local level'. 
• No changes to tax credits, TV licences or bus passes.

These policies will mostly fail to please Labour supporters and activists.  But I think there are two further, albeit smaller, themes in Labour's welfare plans.  The first is stronger intervention in the labour market.  This fits comfortably with Miliband's broader approach of 'changing capitalism'.  The Coalition scrapped the similarly interventionist Future Jobs Fund: not out of the view it didn't work (it did) but because it contradicted their broader labour market strategy of private sector job creation.  

Instead, Labour is advocating a job guarantee for all long-term unemployed people: confirmation of a now familiar Labour policy crafted in opposition.  The guarantee will apply to all young people unemployed for a year and everyone else unemployed for two years.  It will be criticised by the Left for being 'compulsory' in the sense benefits will stop for those who refuse.  But it is still a bold measure: effectively abolishing very long-term unemployment.  

The third and final theme is contribution.  A more contributory welfare system is something Labour have flirted with for several years now, largely because of the argument that declining support for welfare has something to do with ever-increased means-testing: nothing for something.  In its manifesto, Labour pledges a higher-rate of JSA for those with sufficient contributions records.  We'll see how far Labour goes with this (we're unlikely to see European-style benefits with very high replacement rates) but it remains a potentially important shift in direction.  Especially given the Conservatives are suggesting they will further means-test JSA.

Finally, there is one glaring omission from Labour's manifesto: sanctioning.  In the aftermath of Cameron's death-by-Paxman last month, Labour has made a big issue of food banks and the need to reduce dependence on them.  One key part of the strategy for doing so, as argued for by Reeves in March, is to reform the present sanctioning regime.  But there is not one mention of this in the Labour manifesto.  Why has it been excluded from the manifesto?  Because the policy has been scrapped or because it was deemed politically unwise to draw attention to it?  This seems to me a question Labour needs to answer.

Labour is ahead on welfare - what's going on?

Some findings from an opinion poll caught my attention in yesterday's Sunday Times, with the graphic below showing who the public trusts on specific policy areas.  As we might expect, David Cameron and the Tories are more trusted than Ed Miliband and Labour on the traditional Conservative issues of the economy, law and order and defence.  Labour, meanwhile, romps home on its own traditional ground of health and education.

The figure that caught my eye however was the one for welfare benefits, with Miliband enjoying a five-point lead over Cameron.  This seems bizarre. And is counter to the conventional media narrative that Coalition reforms are extremely popular.  Only last night on BBC Five Live, the right-wing commentator Tim Montgomerie was extolling tough welfare reforms as a sure-fire election winner.

So what is going on?  Why are Labour more trusted on the welfare state, contrary to anything you might read in the media about social security?

I would posit that three things might be happening. The first is that enough people are feeling the negative effects of benefit cuts - particularly ones related to tax credits and Child Benefit.  Further, under a majority Tory government with Cameron as PM, there would be more to come: for younger (removing entitlement to JSA) and older voters (means-testing of some universal benefits).

The second is that the Tories are finally going toxic on welfare.  I've wondered in the past how far the Conservatives might go with welfare reform - and the party has often given the confident impression that they can go as far as they like without losing public support.  However, it might be the case that they are moving too quickly - beyond where public opinion lies.  In policy terms, I'm mainly thinking about removing benefits for young people - which seems counter-productive and, in plain terms, cruel.

Finally, it might be that attitudes to the welfare state are softening as part of the naturally occurring attitudinal cycle.  In other words, welfare attitudes - just like GDP - go up and down over time.  This certainly seemed the case in the latest British Social Attitudes survey, which reported a significant shift in public opinion.

It is still too early to say whether we are witnessing a major shift in welfare attitudes.  Yet the signs are that we just might be.  And for Labour, this could have major policy implications - giving the party much more room to far, far bolder.

Unemployment and well-being

Well-being is rising in the UK - and analysts argue that this is due to falling unemployment.  This is an easy link to make, given that unemployment is so damaging to well-being (as well as to other indicators of health).

That unemployment is falling is good news - for well-being and for the economy.  But what can we do for those who remain unemployed?  How can their well-being be protected?

There are broadly three options available to governments (assuming that governments care about the unemployed's well-being, which is not altogether obvious).

One option is to implement a jobs guarantee scheme, as originally proposed by Richard Layard and now supported by the Labour Party.  Depending on its form, a jobs guarantee scheme could essentially abolish long-term unemployment.  Which would be, presumably, beneficial for people's health.

A second option, explored by me, is to reform training programmes for the unemployed.  If programmes were more personalised, with more focus on work experience/skills and treated people with dignity, then they could be effective ways to reduce the mental health costs of unemployment.

A third option is more radical - and linked to the limitation of the previous two approaches.  That is: what if these approaches simply reinforce the social norms attached to paid work?  This could be problematic, as it is arguably these norms that are responsible for unemployment's negative effects on well-being.  In other words, would a jobs guarantee scheme reinforce the ideology of work: the notion that Work is Good and, correspondingly, Unemployment is Bad?

The argument here then is that to truly deal with the negative impact of unemployment, you have to change the nature and status of unemployment itself.  And this would require a far larger economic and social reorganisation than that implied by a jobs guarantee scheme or better labour market training programmes.  It might require, for example, a strategy of reducing the number of hours we all work.  Or, even more radically, introducing a basic income scheme.

In both of these strategies, a plausible outcome would be a blurring of the line between work and non-work: between employment and unemployment.  Being 'unemployed' would mean less in a society where 'working' meant something altogether different.

Changing what it means to be unemployed is, however, a large undertaking.  Yet we should be careful of supporting policies that might well aim to deal with unemployment's negative effects yet, in doing so, strengthen its (dangerous) hold on society.

Things can only get flatter. Why are Labour miserable at the prospect of power?

A common observation from an assorted range of journalists is that the Labour conference this week in Manchester has all been a bit flat.  Something largely confirmed by Ed Miliband's disappointing speech yesterday.  On my own part, I've been milling around the conference since Sunday, attending various fringe events in which I've also been observing the mood of the party's MPs and activists.

The journalists, I think, are completely correct in their assessments.  Of the events I've attended, MPs seem completely underwhelmed and unexcited by the prospect of power.  This should be unusual.  They are, after all, talking in genuinely probable terms about how they will plan to change the country in a matter of months.

So, what is going on?  Why is the Labour Party - from its leader to its activists - so unenthused about governing again?  All in all, there are seemingly three things going on.

The first is that, as everyone is now aware, Labour's ability to exercise power will be severely hampered by the fiscal restraints of the next parliament.  In accepting the challenge to eliminate the deficit without significant tax increases, Labour has committed itself to severe spending cuts.  The choice it can thus offer the electorate is a limited one: Labour will shift around the priorities of government but will not, and cannot, significantly shift spending plans.

The second is that, although Labour is close to power, this will be - at best - limp power.  Based upon polling trends, the best case scenario seems to be a tiny majority for Miliband.  A more probable scenario however is a hung parliament, with Labour in coalition with the Liberal Democrats.  Personally, I think there might be benefits to working with the Lib Dems - but there is a strong, systematic aversion to a Lib-Lab coalition from many corners of the Labour Party.

Finally, there is the issue of whether Labour is psychologically ready for power.  Political parties are just not used to regaining power so soon after losing it.  Plus, the scale of Labour's general election defeat - and its context, set amidst the death of the economic model the party worked within and advocated for 13 years - means that five years is a short time to complete such a monumental political inquest.

Ed Miliband however has arguably done an impressive job in conducting this inquest - relatively peacefully and quickly.  Yet, it remains unclear what Miliband's Labour stands for.  It accepts the economic terms set by the Conservatives yet aspires to build a new form of capitalism.  It talks of cutting Child Benefit but of a "big offer" on childcare.  Labour finds itself in a position where power is unexpectedly, and perhaps prematurely, within reach.  The question is, does the party really want to grasp it just yet?

Training programmes can improve the well-being of unemployed people - but there are hugely important caveats

For the past three years, I have been exploring whether there is much we can do to counter one of society’s most devastating ills.  It is associated with a wide range of problems: including poor mental health, social isolation and even suicide.  This is not a disease in the typical sense but it certainly carries the characteristics of a ‘social disease’.  It is, of course, unemployment.

The best way to counter unemployment is to of course promote or provide employment.  But in an economic system like capitalism, there will always be a ‘rump’ of unemployed people: no matter how fair or equal a society is.  The question then turns to what we can do to help those who find themselves suffering from job loss.

There are lots of things governments can do.  They can, for example, provide social benefits to ease the economic costs of unemployment.  Over the past twenty years or so however, one particular intervention has expanded in the UK and beyond: training programmes designed to move unemployed people closer to the labour market.

Training programmes for the unemployed are a diverse range of interventions. And this is a crucial point.  People most often associate such schemes with welfare-to-work interventions like the Work Programme.  Yet, whilst the Work Programme is the largest such intervention, there are a huge range of other programmes: skills training, education, work experience or, more simply, ‘keeping people busy’.

My main research question is whether such programmes mitigate some of the psychological, health and social costs of being unemployed.  But why might this be the case?  One argument is that being unemployed and on a programme is very different to being unemployed and not on a programme.  It involves more daily structure and activity, social interaction and – if they are of sufficient quality – optimism for the future.

Some of my findings have just been published in the Journal of Happiness Studies and the results are fairly consistent: training programmes are associated with higher well-being amongst the unemployed.  Looking at data from the large-scale Annual Population Survey, I found that unemployed participants had higher life satisfaction, life worth and feelings of happiness compared to unemployed non-participants. 

This is largely in line with the small number of studies from other countries – such as the US, Finland, Australia, Sweden and Germany – that also show a positive well-being impact of training programmes for the unemployed.

Yet, it is not quite as simple as this.  There are, at least, three important caveats for future policy-making.

First, the effect of training programmes is relatively small.  Whilst it is a statistically significant effect, it is not comparable to the well-being effect of paid work.  In terms of happiness at least, training programmes are certainly no substitute for a real job.  Further, there is no effect of programmes on reducing the anxiety of the unemployed.

Second, there are only well-being effects for certain types of participants.  Women benefit less, as do older unemployed people and the more highly qualified.  Training programmes are not a well-being panacea for all types of unemployed people and we need to explore why they are ineffective for large numbers of participants.

Thirdly, and perhaps most importantly from a policy perspective, specific types of programmes are more effective than others.  In particular, there is a crucial dichotomy at work.  On the one hand, programmes that focus on skills, training and work experience – many of which are voluntary – have apparently high well-being effects.  On the other hand, programmes that focus on intensified advice – most of which are mandatory – are completely ineffective.  Vitally, this includes the main welfare-to-work scheme the Work Programme, which I find to be exactly the same as ‘open unemployment’ in terms of well-being.

So, what is going on and why do some types of programmes have observable well-being effects?  One idea is that such programmes mimic the ‘latent functions’ of paid work.  This the theory that work is good for well-being for a wide variety of non-economic reasons: time structure, daily activity, social contacts, collective purpose and social status.  By mimicking these functions, training programmes can improve well-being.

A second idea, which has emerged from qualitative research I conducted in Greater Manchester, is far simpler.  This is that the better quality and voluntary schemes might simply treat people with dignity, respect and care.  Unemployed people often feel stigmatised and ashamed by their status.  When they enrol on a programme where advisers treat them with dignity - and give them the time and space to develop – such feelings of stigma and shame can be challenged.  Sadly however, this is far from the case in the Work Programme, which invoke in many people feelings of antipathy and hostility.

The conclusion then is that training programmes can promote the well-being of the unemployed.  But only in specific training contexts, for certain types of unemployed people and if they promote the right type of values.  On these terms then, the Work Programme is certainly not the cure for the psychological impact of unemployment. 

Labour's plans could destroy the welfare state, not save it

For some years now, social democrats have faced a 'crisis of the welfare state'.  This is the dilemma of how to defend and protect social security when public confidence in the system is drained.  So far, little progress has been made.  The Tories are rampant: just like the NHS is natural Labour terrain, the welfare state has become a conservative issue.

Under Ed Miliband, there have been relatively few concrete proposals aimed to address the criss of the welfare state.  The most important has been a job guarantee for long-term and young unemployed people: an offer that says 'we will provide you with work, otherwise you will lose your benefits'.

Today however marks a significant shift in Labour's welfare offer to voters.  According to the Guardian, Ed Miliband will announce two key changes in a speech today.  First, Jobseeker's Allowance (JSA) will be abolished for the 70 per cent of unemployed 18-21 year-olds who are currently low-skilled.  Instead, it will be replaced by a much more targeted (and seemingly less generous) benefit that is tied to training.  Second, more people will be subjected to means-tested JSA as eligibility for insurance-based JSA rises to five-years of National Insurance contributions from two years.

Purportedly, Labour's proposals are designed to mollify public distrust towards the welfare state and its perceived lack of fairness and reciprocity.  However, many people have long been studying the causes of increasingly hostile attitudes towards welfare in the UK.  And within these findings, two ideas have emerged that suggest Labour's proposals could have the opposite effect.

The first is that distrust of welfare is linked to the decline of the contributory principle.  After decades of increased means-testing and targeting, many people feel they get little from the state in return for their contributions.  This is the problem of getting 'nothing-for-something', not 'something-for-nothing'. Bizarrely, the spin from Labour appears to suggest that further shrinking the pool of people eligible for insurance-based JSA is a strengthening of the contributory principle.  This is a strange and misguided logic: the contributory principle would be strengthened by an expansion, not contraction, of its practical application.

The second determinant of transformed attitudes is the changing views of young people.  In a recent article, I argued that the most dramatic demographic shifts in welfare attitudes had occurred amongst the young.  Twenty years ago, young people were the most 'pro-welfare' group by age, now they are the most 'anti-welfare'.  The causes are complex and disputed - but it is highly unlikely that further restricting young people's access to out-of-work benefits will renew the bonds between Generation Y and the welfare state.

A good start for Labour would have been to expand the contributory principle, not further target it, whilst explicitly focusing on supporting young people, rather than restricting access to social security.  If the causes of such deep, attitudinal change in the UK are indeed linked to the decline of the contributory principle and the changing views of young people, today's proposals by Labour could end up having the complete opposite effect.  They could end up further destroying Britain's welfare state, not saving it.

There are better ways of helping long-term unemployed than punitive Help to Work

Originally published on The Conversation and written with Adam Coutts

There is now another slide in the UK towards American-style “workfare” programmes aimed at getting the unemployed back to work as quickly as possible. The evidence showing that workfare programmes actually work is mixed to say the least.

Under new rules, the long-term unemployed will face one of three options: daily meetings with Jobcentre advisers, six months' unpaid “voluntary” work or more rigorous training and support. There is of course a fourth option, one that explains why the reforms are so controversial: benefit sanctions.

The introduction of yet another layer of sanctions has reignited fierce debates about welfare reform. Is it fair to threaten people with destitution to get them into work? Do workfare placements take jobs out of the real labour market? And are there now similarities in the way we treat the unemployed and the way we treat criminals?

The evidence

But another key question is whether or not such programmes actually achieve what they set out to do. Fortunately for those interested in evidence-based policy, the DWP has conducted a large-scale pilot evaluation of Help to Work.

In fact, the evaluation was a randomised control trial: the “gold standard” in evidence-based policy. The first set of outcomes the DWP was interested in was the effect of Help to Work on employment trajectories and benefit receipt. In the initial report on the scheme, the researchers found no evidence of a statistically significant impact of Help to Work on re-employment.

The latest report – which had the advantage of a longer tracking period of two years – was barely more positive.

As Jonathan Portes has explained, there continues to be no effect of Help-to-Work on re-employment, although participants did spend less time on benefits over the two years compared to the control group. These are, to put it generously, modest achievements.

Health and welfare

As well as looking at labour market outcomes, the Help to Work pilot also examined the impact on participants’ well-being. In what has been a controversial and much debated agenda, the incorporation of well-being into policy has been significantly advanced by the current coalition government.

Health and well-being are hugely important factors in the context of unemployment and the transition to work. Decades of research has shown the deleterious impact that being unemployed has on mental health and happiness as well as affecting how long someone remains unemployed.

In recent years, we have argued that labour market programmes can improve the health and well-being of unemployed people. This is because they act as a supportive step in which unemployed people gain access to some of the benefits of paid work such as daily structure, social contact and a sense of purpose.

The evidence suggests that programmes which provide a supportive training environment, constructive work experience and tackle the wider problems that people have such as mental health issues, participants may gain a stronger sense of hope and self-efficacy: the belief that they themselves can get a job. Participation in these programmes have also been linked to reduced levels of depression and suicide rates.

In the initial evaluation of Help to Work, the researchers tested whether receiving intensified advice or participating on community projects raised the well-being of participants. Importantly, they found evidence of a barely minimal impact. Compared to the usual system of support, participants were no more likely to report higher life satisfaction, life worth or feelings of happiness, although participants on the community projects reported feeling less anxious.

Unfortunately, this evidence appears to have been ignored and consideration of health and well-being as important outcomes of policy has been abandoned.

A hard balance to strike

Should we be surprised that Help-to-Work will have little effect? Perhaps not. The international evidence on “active labour market programmes” – summarised by the DWP – shows they are hard to get right. There is little evidence, for example, that compulsory work activities are effective in boosting employment returns. Perhaps most importantly for Help-to-Work, this is especially the case for the most disadvantaged out-of-work groups.

But this does not mean that back-to-work schemes are always ineffective. The Future Jobs Fund – before being scrapped by the current government – was a surprising success story. The message is that training schemes must appropriately “fit” those they are trying to help, as well as being designed with particular local labour market conditions in mind. It is very hard to get a job where there are no jobs in the local labour market.

The question we must ask is whether the exceptionally modest effects of Help-to-Work programme justifies its expansion. And this is not just in economic costs, but in well-being ones as well. The use of pure and punitive workfare measures and sanctions may well increase instances of debt, food bank use, depression and ill health among those it is intended to help.

We need to seriously consider whether there are more effective – and less dehumanising and stigmatising – ways of helping the long-term unemployed. In areas where there are no jobs to go into could government policies such as back to work programmes be used to protect and promote the wellbeing of unemployed people during difficult economic times rather than make it worse?

We also have to look elsewhere for examples of how labour market programmes can be designed such as Scandinavia and Europe rather than continuously following the US work-first approach. Finland’s Työhön Job Search Training Programme is such an example which has been found to have both positive effects for the labour market and programme participants.

Finally is long-term unemployment really a problem because claimants see an adviser just once a fortnight? Or, alternatively, is long-term unemployment linked to more structural issues of labour demand, regional inequalities and ill health? Programmes such as Help-to-Work should be based on robust evidence about how to move people into the labour market: and, perhaps more importantly, on the reality of why people remain out of work.