The Future of Politics. Charles Kennedy
Panel Survey showed that between 1991 and 1997 only a quarter of couples with children who were out of work in any given year were able to find work a year later. The figure for lone parents was even more depressing – one in ten.
But there are large numbers of parents who do mini-jobs – that is, they work fewer than sixteen hours a week, which is the limit beyond which people cannot claim Income Support. The Institute for Social and Economic Research found that the more hours people put into these jobs, the more likely they were to secure a job offering more than sixteen hours work a week in the following year. It follows that government ought to be encouraging these small part-time jobs as a route into more full-time employment and out of poverty, but we still have a punitive benefits system, the principles of which have not altered for decades. People have to declare every change in their part-time earnings – even though many such jobs are ad hoc. People can also only earn between £5 and £15, depending on their circumstances, before money is deducted from their benefit. All this discourages people from taking any job that is less than full time, regardless of the opportunities it may lead to later.
In its failure to think flexibly it is no worse than previous governments, but no better either. Labour appears prepared to understand work only in terms of the traditional model of nine to five, five days a week, and benefits in terms of a weekly sum of money. And because it has stuck by this rigid perspective, people are losing out. For example, under the present system, unemployed people receive a weekly sum of money and, on top of that, a few entitlements, such as free eye check-ups and prescriptions. As soon as they stop receiving weekly benefit, the other benefits cease as well, meaning that even though they are working, they may be worse off than when they were entirely dependent upon benefits. Instead, people working a few hours a week, and all people on low incomes, should retain a range of entitlements, such as subsidized transport, free prescriptions and milk, so that they have incentives to enter and then remain within the world of work.
In 1996, Tony Blair said, ‘If the Labour government has not raised the standards of the poorest by the end of its time in office, it will have failed.’ Mr Blair made the pursuit of equality a key feature of his agenda – I do not argue with the depth and sincerity of his conviction – but the fact remains that, back in 1996, this was a subject of immediate contemporary concern. New Labour were characteristically astute in capturing the mood of the nation. It is still an important issue in the nation’s eyes, but it would be even more so if the government made a crusade of the issue.
It is easy to see why it was such a public preoccupation. In 1992, an estimated 13.7 million people were living on breadline benefit or on half the average wage. This amounted to one quarter of the population of Britain. UNICEF warned that Britain’s children were the worst off in Europe. By 1994, 4.2 million – roughly one third – of the children in Britain belonged to families living below the poverty line. Meanwhile, the gap between rich and poor had widened. By 1994, the wealthiest 5.5 million people in GB (i.e. the richest 10 per cent) were an average £650 better off for every thousand pounds they had earned in 1979. But the poorest ten per cent were worse off. For every £1,000 they had had in 1979, they now had £860.3
Unfortunately, it takes more than three budgets and a New Deal to reverse major trends like these, and undo the damage already caused – benefit cuts were almost the hunting cry of the Tory party in the 1980s. The most vulnerable sections of the nation are still suffering them under Labour. Anyone who receives invalidity benefit and has a modest private pension (£85 a week or more) will lose benefit at a rate of 50p in the pound. Severe disablement allowance has also been abolished, placing many severely handicapped people below the poverty line. The state pension was 20 per cent of the average income in the early eighties. It has now fallen to 15 per cent and is still falling. The government’s answer was to make a derisory change which amounts to 75p a week for the average single pensioner. Meanwhile, a study by the University of Kent has shown that half those over eighty are surviving on less than £80 a week. Pensioners, distressed at their treatment under the present government, are among the most regular and vocal contributors to my daily postbag.
We can also see how little things have improved for the poor when we examine public health. Areas such as Glasgow, Newcastle-upon-Tyne and Liverpool have premature death rates more than twice those in affluent southern counties like Buckinghamshire and Berkshire. Within London, poor boroughs such as Woolwich have premature death rates twice as high as wealthy boroughs like Kensington and Chelsea, as well as disproportionately high rates of asthma, eczema, heart disease and depression.
The urban poor face unique sets of problems which Labour is doing little to address or even understand. A 1999 University of Glasgow study pointed out that Britain’s twenty major cities have been hardest hit by unemployment. The decline of manufacturing industries has led to huge numbers of male manual workers being put out of their traditional employment. The report indicated that the cities had lost nearly a quarter of their 1981 stock of full-time male jobs by 1996 – equivalent to over 500,000 jobs – and these people are not going on to find work elsewhere. The service industry, it is often said, is expanding, but it is, according to the study, doing so least in our cities. The decline in skilled manual jobs has, on the whole, resulted in downward movement for most urban men into unskilled, lower-paid jobs, or into unemployment, casual work and the black economy.4 The upshot is that there is a massive jobs gap in our cities – that is, large numbers of men able to work, and no jobs for them to go to.
Labour’s current policies are directed towards equipping the urban unemployed with more skills and motivating them to find work. All this is totally missing the point. In the words of the study’s authors: ‘national economic and social policies need to give greater emphasis to expanding labour demand in the cities’. Of course, training and motivation are vital – but they are pointless when there are no jobs for people to go into.
We must also not overlook the very real problem of rural poverty. It’s not just farmers who are angry about the present government. The Rowntree Foundation interviewed sixty young people from rural backgrounds, and found that only two of them had secure accommodation and financial independence, and all felt that the only long-term solution to their housing and employment difficulties was to leave the countryside. Poor transport, lack of affordable housing and decline in the traditional sources of rural income are creating poverty blackspots in areas many urbanites still think of as idyllic. The problems of the countryside are likely to be exacerbated by the government’s decision to make benefits payable by Automatic Cash Transfer rather than over the counter at Post Offices. This means that many rural sub-post offices will become economically unviable and be forced to close, and since these are usually twinned with village shops, rural Britain risks losing a vital hub of community life.
On a recent visit to the West Country, a farmer asked me why Labour had seemingly abandoned them, even though it held more rural seats than ever before. I knew the answer, and it becomes clearer every day. The present government has more rural constituencies, certainly, but among them plenty that it neither needs nor wants. The bulk of its ministers are from an urban background, and its outlook is consequently not particularly sensitive to the needs of the rural population. Many of Labour’s rural seats are expendable – it doesn’t need them to stay in power – that’s why they can happily tell farmers to stop whingeing and diversify.5
Wherever it occurs, poverty breeds poverty and further exclusion. In our nation, significant numbers of people are growing up with limited access to the sort of services that are normally considered essential for full participation in society. A recent study by the University of Newcastle looked at people’s access to energy, food, telephones, banking and food retailing in two poor neighbourhoods. It was clear that service providers, like phone and other utility companies, as well as the discount supermarkets, were physically withdrawing from low-income areas. The more limited the access to a service became, the more it cost the people who could least afford it: for example, prepayment electricity meters, small food shops, public telephones and loan sharks all cost the user significantly more. This is the Tory legacy of ‘market forces’ and ‘no such thing as society’. It is the ultimate proof that the market