Tonight on Moral Maze we are discussing benefit reforms and more specifically whether – as a number of bishops have argued - the poorest in society should be protected from austerity. Delving into the debate I noticed an interesting inversion.
Arguments over policy tend to revolve around three broad criteria; fairness, freedom and efficiency. Broadly we associates concern about fairness with the left, about freedom with the right, while the question of ‘what works’ is contested by both (albeit often tendentiously).
When it comes to how the state treats the poorest the reference points change. Often the strongest arguments made by those supporting a cut in real terms benefits levels are made in terms of fairness: it is not fair either to taxpayers or to the working poor that those who are not in work are able to maintain their income at the expense of the rest of us and in contrast to many workers who are suffering failing living standards.
Conversely, the case for maintaining a basic living standard for all people can be made in terms of the freedom of people to be able to subsist (for this is all it is) despite the fact that they might not choose or be able to live the kinds of lives of which we approve. From this perspective it is better that we accept the small moral hazard of some people choosing to live fecklessly on benefits than that we live in a state where people are made utterly destitute unless they are willing to become wage slaves.
Of course, these arguments aren’t absolute. Few benefit cutters think the unemployed should be left without any income at all, while the supporters of some kind of basic income recognise that for reasons of practicality and fairness it is bound to be quite modest. Therefore, although I am a supporter of welfare conditionality (as long as it involves genuine support as well as threat) I oppose this benefit cut for a variety of general and specific reasons.
First, on grounds of fairness we need to remember that the recent rise in benefit levels in comparison to average wages is a shallow and short lived phenomenon. As the reliably robust and provocative Jonathan Portes has pointed out, since 1979 the basic level of unemployment benefit/Jobseekers Allowance (JSA) has fallen from 22% of average earnings to 15%. If a group of people have been losing out steadily for twenty five years it seems perverse to say it is unfair that they have clawed back a fraction of those losses in the last three years.
Second, the very level of JSA (to focus on one benefit) at £56 for 18-24 year olds and £71 for over 25 year olds seems to defy the idea that virtually anyone would choose to live on them. Of course, most people on JSA get other payments – such as housing benefit – but these are to pay for specific costs. No one on benefits can afford anything but the most basic of lifestyles (and even that is threatened when unexpected costs – like the need to replace a cooker, or buy a school uniform - kick in).
Third, more generally, the evidence that small changes in already modest benefits levels have an impact on work incentives is very limited (indeed some people argue the evidence goes the other way). This reduces the power of both the moral hazard and fairness to tax payers’ arguments and undermines the case that decent benefit levels are inimical to economic efficiency.
Fourth, I do not believe, especially in economic hard times, that the responsibility for people facing either penury on benefits, or virtual penury on minimum wages, lies primarily with the poor individual. A reason why judges have some discretion in sentencing is to take extenuating circumstances into account. If people are seen to be totally responsible for the bad choices they make we feel more justified in denying their freedom. But do we really believe that in most cases it is the unemployed who are most responsible for the unenviable economic circumstances they face? If not shouldn’t we defend them having the marginally greater dignity/freedom resulting from a slightly higher unemployed or in-work benefit entitlement?
Given that I am up against Melanie Phillips and Michael Portillo it is bound to be a very lively debate; so why not tune in tonight at 8.00 on Radio 4?
A new CEO, a new format and new ideas – Andy Haldane marked his first day as head of the RSA in September with our first virtual Fellowship Townhall.
Fran Landreth Strong
With our research finding that around half of young people are financially precarious, Fran Landreth Strong examines concerning trends in young people’s economic security.