The Work Connection: The Role of Social Security in British Economic Regulation

The Work Connection The Role of Social Security in British Economic Regulation

Chris Grover and John Stewart

The Work Connection

Also by John Stewart OF NO FIXED ABODE SOCIAL WORK AND HOUSING UNDERSTANDING OFFENDING BEHAVIOUR (with David Smith and Gill Stewart)

The Work Connection The Role of Social Security in British Economic Regulation Chris Grover Lecturer in Applied Social Science, Department of Applied Social Science, Lancaster University

and

John Stewart Senior Lecturer in Social Policy, Department of Applied Social Science, Lancaster University

© Chris Grover and John Stewart 2002 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 0LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2002 by PALGRAVE Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE is the new global academic imprint of St. Martin’s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN 0–333–75443–3 hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Grover, Chris. The work connection : the role of social security in British economic regulation / by Chris Grover and John Stewart. p. cm. Includes bibliographical references and index. ISBN 0-333-75443-3 (cloth) 1. Social security—Great Britain. 2. Social security beneficiaries— Employment—Great Britain. 3. Public welfare—Great Britain. 4. Welfare recipients—Employment—Great Britain. I. Stewart, John, 1947– II. Title. HD7165 .G76 2001 368.4⬘00941—dc21 10 9 11 10

8 7 6 09 08 07

2001045180 5 4 3 2 06 05 04 03

Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham, Wiltshire

1 02

For Karen (C.G.) For Chris ( J.S.)

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Contents Acknowledgements

x

List of Illustrations

xi

Abbreviations

xii

1 Introduction – Welfare to Work-Welfare: Making the Connection to Work Regulation theory Welfare to work? Work-welfare policies: what are they? Researching The Work Connection Structure of the book

1 3 6 8 12 14

2 The Conservatives, Neo-Liberalism and Social Security Policy: the Development of Market Workfare What is workfare? ‘Classic’ workfare: a reflection of command economies? Social security and the Conservatives The stricter benefit regime The in-work benefit regime The relationship between the stricter benefit regime and the in-work benefit regime: market workfare Market workfare: a neo-liberal social mode of economic regulation Conclusion 3 ‘New Labour’ and the Modernisation of Welfare: Extending Market Workfare ‘New Labour’ and the free market The ‘Third Way’ and the individualising of social exclusion ‘New Labour’ and unemployment: a (lack of) motivation discourse The New Deals: developing a pro-active welfare system? Managing economic growth: the New Deals and employment Tax credits and the working poor: maintaining low wages? vii

19 22 26 29 32 35 37 38 42

44 44 47 51 54 60 63

viii Contents

The national minimum wage: increasing low wages? Conclusion 4 Role Models and Traditional Moralities: the Development of In-Work Relief for Lone Mothers Reproducing labour: household production and ‘the family’ Hayek: free markets, ‘traditional moralities’ and ‘the family’ The ‘underclass’ arrives: what to do about lone mothers? Lone mothers and formal employment: role models and the re-regulation of public patriarchy Re-regulating public patriarchy (I): lone mothers, role models and the Conservatives Re-regulating public patriarchy (II): ‘new Labour’, lone mothers and role models Role models, the double burden and public patriarchy 5 Taming ‘Barbarians’: Young Men, the Patriarchal Family and In-Work Relief Fratriarchy: a threat to patriarchy? Unemployment and social disorder: respectable fears and the regulation of neo-liberal accumulation Responding to unrest: pacifying young people through work The 1990s: ‘barbarians’, lone mothers and the ‘underclass’ Market workfare and the Conservatives: civilising the ‘barbarians’ ‘New Labour’ and the lads’ New Deal Conclusion 6 Speenhamland: In-Work Relief at the Dawn of Modernity Loaves and working men Speenhamland, political economy and the capture of the ‘natural’ 1834: political economy and the Poor Law Commission Report Implementing what is natural A spectre haunts in-work benefits: Family Income Supplement

66 69

72 72 74 76 80 83 88 91

94 94 96 100 104 108 112 118

120 122 125 128 133 134

Contents ix

‘New Labour’ and the national minimum wage Conclusion 7 Family Allowances to Child Benefit: Keynesian In-Work Relief Delivered by Beveridge? Family allowances Assumption A Interest groups The movement for family allowances Keynes and the war But when? Servicemen’s dependants’ allowance A scheme is outlined ‘The baby is a very little one’ – the Family Allowances Act, 1945 Ending child poverty in the millennium – a role for children allowances? 8 Conclusion: Regulation and Income Maintenance into the Twenty-First Century Regulating accumulation Controlling incomes in an age of uncertainty Pragmatism, rationalism and the regulation of The Work Connection But does it work? Back to the future? Income maintenance in the twenty-first century

142 145

148 149 150 155 157 162 165 166 167 168 172

175 175 179 184 185 189

Notes

192

References and index of author citation

204

Index

221

Acknowledgements The authors would like to thank the following people for their help, support and comments on various aspects of the book: Sue Penna and Keith Soothill at Lancaster University, Simon Duncan at the University of Bradford. Thanks also to the staff of the Berkshire Record Office, Lancaster University Library, Newbury Library and Reading Library for aiding the search for relevant material. Thanks to Karen for her continuing support in light of my often lengthy diatribes about the nature of social security policy and its future direction (C.G.). The authors would also like to thank the artist David Simonds and The Guardian for permission to reproduce the cartoons.

x

List of Illustrations The cartoons, which first appeared in The Guardian, are by courtesy of David Simonds. 1.1 3.1 3.2 4.1 5.1 6.1 8.1

The social and economic modes of regulation Frank Field thinks the unthinkable thought ‘Employability’ Lone mother, punch-bag Welfare to work Welfare to work-welfare Ebenezer Scrooge

xi

xiv 53 61 90 114 146 183

Abbreviations AFDC BBC CBI CD CHB CPAG CPRS CSA CTC DSS EEC ETU FC FIS GDP HB IEA IPPR IS JSA KWS LPC LSE MP MSC NCS NDLP NDYP NLO NMW OPB OSCI PP RAF SBR SWFG

Aid to Families with Dependent Children British Broadcasting Corporation Confederation of British Industry Childcare Disregard Child Benefit Child Poverty Action Group Central Policy Review Staff Child Support Agency Childcare Tax Credit Department of Social Security European Economic Community Earnings Top-up Family Credit Family Income Supplement Gross Domestic Product Housing Benefit Institute of Economic Affairs Institute of Public Policy Research Income Support Jobseekers’ Allowance Keynesian Welfare State Low Pay Commission London School of Economics Member of Parliament Manpower Services Commission National Childcare Strategy New Deal for Lone Parents New Deal for Young People National Labour Organisation National Minimum Wage One Parent Benefit Out of School Childcare Initiative Parents Plus Royal Air Force Stricter Benefit Regime Single Work Focused Gateway xii

Abbreviations xiii

SWS TANF TUC UISC UK US WFTC WIN YOP YTS YWS

Schumpeterian Welfare State Temporary Assistance for Needy Families Trades Union Congress Unemployment Insurance Statutory Committee United Kingdom United States Working Families Tax Credit Work Incentives Plan Youth Opportunities Programme Youth Training Scheme Young Workers Scheme

Figure 1.1 The relationship between the social and the economic modes of regulation.

xiv

1 Introduction – Welfare to Work-Welfare: Making the Connection to Work

A system which aims its allurements at all the weakest parts of our nature – which offers marriage to the young, security to the anxious, ease to the lazy, and impunity to the profligate. (Poor Law Commission 1832, in Checkland and Checkland, 1974, p. 135) Payment of unemployment benefit on the most generous scale compatible with preservation of the mobility of labour and of the incentive to seek work and reject idleness will maintain the purchasing power of workpeople, if trade depression begins, will thus mitigate the severity of the depression. (Beveridge, 1942, para. 442) It cannot be said too often that social security cannot remove the causes of poverty. It can and should give protection from the effects of unemployment. But unemployment itself will only be tackled by creating the conditions for sustained economic growth. (Secretary of State for Social Services, 1985b, para. 1.6) The welfare-to-work programme makes the labour market flexible … It creates greater flexibility by breaking down the barriers that trap people in long-term unemployment. It increases the supply of labour in the economy, its quality and its employability. (Peter Mandelson, Secretary of State for Trade and Industry, in Hansard, 1998b, col. 169) Those four quotes aptly summarise the main themes with which The Work Connection is concerned. They demonstrate the fact that income 1

2 The Work Connection

maintenance policies are closely related to and are shaped by wider concerns regarding economic efficiency. Indeed, The Work Connection is concerned with the ways in which the relationship between income maintenance policies, employment and the economy have been and are managed. It examines the ways in which historically specific configurations of income maintenance policies can be understood as mechanisms of economic management. More specifically, the focus is upon the ways in which the state manages the most direct relationships (beyond cost) between income maintenance policies and the British economy in various historical periods. The focus is upon the importance of the intersection between the level of out-of-work benefits and the lowest in-work wages, particularly for those workers with dependent children (although in the late twentieth century also for single people and childless couples). The main theme of The Work Connection relates to the management of that relationship between outof-work and in-work incomes and its importance in the management of the wider economy. The focus on the relationship between income maintenance policies and in-work incomes is of course not new. Concern with, and discussion of, that particular relationship can be detected in the main approaches to studying social security policy. So, for example, those working in variants of the social administration tradition often engage with the notion of work incentive measures and examine the ways in which income maintenance policies may or may not incentivise economically inactive people to go back to work (for example, George, 1968; Field and Piachaud, 1971; Bradshaw and Millar, 1990; Walker, 1994a; Whiteford and Bradshaw, 1994). Such approaches often discuss the ‘unemployment trap’ and ‘poverty trap’ (and more recently the ‘partner trap’) to highlight the way in which the structure of out-ofwork and in-work benefits or cash transferences often interact, leaving those on out-of-work benefits with little increase in net income as they attempt to (re)enter labour markets or earn more. The focus of welfare and/or labour market economists (for example, Atkinson and Flemming, 1978; Maki and Spindler, 1975, 1979; Kay, Morris and Warren, 1980; Rice, 1986; Atkinson, 1993; Britton, 1997) is in many instances similar. What they often call ‘replacement ratios’ and ‘marginal tax rates’ are what social policy analysts call the unemployment and poverty ‘traps’. Those from more radical perspectives (for example, Ginsburg, 1979; Novak, 1988) often focus upon labour discipline, or the way in which the state through various acts of

Introduction – Making the Connection to Work 3

coercion and/or financial incentives attempts to maintain the commitment of economically inactive people, especially those officially defined as unemployed, to paid employment in the formal economy. The Work Connection also has a particular interest in such issues. However, we take the analysis beyond the description of the work incentive or labour discipline measures to question the ways in which such measures not only reflect, but are actually central to, the reproduction of the patriarchal capitalist order. In the context of changes to the way in which the relationship between paid employment and income maintenance policies are managed by the state, The Work Connection focuses upon the way in which socio-economic phenomena argued to be crucial to the accumulation process are reproduced. Those phenomena include the supply of labour, the containment of inflation through the maintenance of a downward pressure on wages, and are linked to neo-liberal ideas about the cultural basis of free markets, the reproduction of role models attached to formal labour markets and the patriarchal family. The Work Connection examines why patriarchal capitalism requires those particular phenomena and details the ways in which particularly contemporary social security policy helps to reproduce them. It does this by analysing income maintenance policies within a theoretical framework that, in a rejection of purely economic approaches to understanding the accumulation process, focuses upon the ways accumulation is socially embedded.

Regulation theory The social and economic upheavals which started in the 1970s challenged particular aspects of Marxist thought. Indeed, the work of the French Regulation School that provides the theoretical framework for The Work Connection emerged in the 1970s out of an engagement with those challenges. In particular it focused upon and questioned the ways in which capitalist1 societies endure periodic shifts from certain configurations of relatively stable economic growth to periods of crisis and vice versa, and why economic growth and crises differ between societies (Boyer, 1990). Regulation theory therefore focuses upon the historically and geographically contingent processes of capital accumulation. The way in which regulation theory conceptualises accumulation processes rejects what are seen as being the immutable laws of both Marxism and economic neo-liberalism. The immutable law of the

4 The Work Connection

former is that capitalist societies are on an historical path that will inevitably be ‘catastrophic’; that the internal contradictions of capitalism will essentially prove too difficult to manage, resulting in a paradigm shift to communism. That version of capitalism and its eventual collapse is rejected by regulation theorists because empirically there is little evidence to suggest that capitalism cannot absorb and survive periodic crises, as was the case in 1920s, 1930s and 1970s Britain. That, of course, raises interesting questions about how crises are managed, by whom they are managed and what institutional forms and mechanisms are involved in their management. In economic neo-liberalism the immutable law is that markets always tend towards equilibrium: that supply and demand will always even out around the ‘natural’ price of a commodity, whatever the nature of that commodity. Such approaches to explaining economic issues are rejected by regulation theorists because of their view of crises which are seen as being external to the accumulation process, rather than as an intrinsic part of it. In regulation theory – and a reflection of its Marxist foundations – crises are part and parcel of economic development, rather than being something that just happens to it. Those crises have to be managed if the capitalist order is to survive to periods of renewed economic expansion and development. In regulation theory capitalism develops through distinct phases known as ‘modes of development’. Any mode of development consists of two closely related concepts: an accumulation regime and the social mode of economic regulation. The accumulation regime represents historically specific configurations of economic activity that aim to sustain ‘growth in capitalist production and consumption’ ( Jessop, 1994a, p. 14). However, regulation theorists argue that the accumulation process cannot be understood as purely ‘economic’, for economic activity involves socially embedded processes, processes that are ‘guided’ and supported through a range of social relations and institutional forms and practices. The coalescence of those social relations and institutional forms and practices that help to ‘guide’ and reproduce a given accumulation regime are known by regulation theorists as the social mode of economic regulation. Hence, Jessop (1994a, p. 14) argues the social mode of economic regulation represents an ‘ensemble of norms, institutions, organisational forms, social networks, and patterns of contact which sustain and “guide” a given accumulation regime’. The form and institutional setting of social regulation can vary, often involving a whole host of agencies and actors from employees to unions to – in our particular case – social security and income maintenance

Introduction – Making the Connection to Work 5

policy-makers. In the case of labour markets, for example, Peck (1996) argues that ‘the forms and functions of social regulation vary enormously, ranging from formal labor [sic] law to socially embedded work norms, from employer discrimination to union action’. Following on, social regulation is often very complex and can be the site of tension between various potential regulators and between the regulated and regulators (Grover, forthcoming, 2002). Despite the potential complexity of regulation it is clear that social policies are a crucial form of social regulation ( Jessop, 1991a). In particular, we focus upon social security/income maintenance policy that attempts to manage the relationship between in-work and out-of-work income. Through using a regulation approach theoretical framework, it is possible to examine the development of such policies in relation to the accumulation regime at particular historical junctures. The approach is one of understanding the ways in which particular policies can be seen as being support mechanisms for particular configurations of economic growth. In the case of The Work Connection this enables an interpretation of social security/income maintenance policy that is located in wider concerns about the nature of the socio-economic order. In brief, regulation theory enables us to analyse the relationships between social security policy and accumulation regimes. As such we focus upon income maintenance policies at particular historical moments as mechanisms in the governance of capital accumulation (cf. Penna and O’Brien, 1996). We do not interpret income maintenance policies as being solely about meeting the needs – whatever they may be – of the least well-off, but as instruments that attempt to manage some of the internal contradictions of the accumulation process. What we are attempting to do in The Work Connection is to analyse and explain through a regulation theory conceptual framework the ways in which governments have attempted to manage the accumulation process through income maintenance policies. In this approach we interpret such policies as social modes of economic regulation that are inextricably linked to historically specific and dominant discourses on how the accumulation process should proceed. Although regulation theory is intimately associated with Fordism and post-Fordism, those are not the only sociological concepts with which it is asssociated (cf. Jessop, 1995). These debates need not be part of our thesis here, for, in contrast we use regulation theory concepts – particularly the ideas of accumulation regimes and social modes of economic regulation – to structure that analysis to inform our arguments and explanations. In that sense we are returning to regulation

6 The Work Connection

theory’s genesis as providing a means of analysing changes in capitalist societies. Our particular interest was sparked by the shift in social security policy in the late 1980s and early 1990s away from the contingencies of the Beveridgean ‘welfare state’ (paying people during periods of nonemployment) towards a situation whereby people in low-paid and/or part-time employment are subsidised through wage top-ups (in-work benefits and ‘tax credits’) to go to work. What became apparent was that those trends in social policy paralleled what Jessop (1991b) describes as the shift from Keynesianism to neo-liberal accumulation (he calls this the shift from Fordism to post-Fordism). The key features of neo-liberal accumulation are the liberalising of markets, the promotion of free markets, deregulation to free individuals from the control of the state and a commitment to, and encouragement of, internationalised markets ( Jessop, 1991b, pp. 146–7). In The Work Connection we argue that the shift towards neo-liberal accumulation had a profound impact upon the nature of income maintenance policies in Britain, in particular the move towards the position we are now in where the most important element of the social security system is held to be inwork cash transferences. That interest in contemporary income maintenance policy change led to an examination of historical precedents of today’s in-work cash transferences, in particular the focus upon Speenhamland-type allowances-in-aid of wages (Chapter 6) and Family Allowances (FAM) (Chapter 7).

Welfare to work? There has been a remarkable surge of interest in welfare to work in recent years … a wide range of initiatives have been put forward by political parties, think tanks, academic commentators and individual MPs, while the general principle of ‘welfare to work’ has been endorsed by such diverse bodies as the Commission on Social Justice, the House of Commons Employment Committee, the Confederation of British Industry and the Council of Churches of Britain and Ireland. (Deacon, 1997b, p. 34) Deacon highlights how in the 1990s concern with the relationships between social security, employment and unemployment (welfare to work) once again became politically important, with various actors

Introduction – Making the Connection to Work 7

and agencies suggesting differing schemes to get the unemployed – a concept that is often used to include lone mothers (see, for example, Borrie, 1994) – into paid work. The official message that politicians and policy-makers want to get across from that title is clear: that ‘welfare to work’-type schemes will take economically inactive people from welfare (dependency) into work (independence). The term has a dynamism suggesting that individuals who engage with such policies while starting in a certain set of conditions (welfare dependency) will reach another set (independence through employment). Many commentators have been seemingly willing to engage with the notion of ‘welfare to work’ without questioning those central assumptions. However, we believe, as Lister (1998, p. 220) argues, ‘“Welfare to work” is [a] somewhat misleading shorthand.’ It is misleading for at least three reasons. The first concerns the so-called transition from ‘welfare to work’ that for many people does not involve a clear-cut movement from welfare into a free market job, because the welfare element continues as an in-work subsidy while they are employed – particularly the case for lone mothers (for example, Ford et al., 1998). Second, there is the issue of what has become known as ‘churning’. Churning describes a situation whereby those people leaving economic inactivity enter such a casualised segment of the labour market that their ‘employment’ only lasts for short periods: they are temporally employed during long periods of economic inactivity (for instance, McKay et al., 1997). Third, and related to those two points, the notion of ‘welfare to work’ is based upon the misleading idea of meritocracy: that ‘welfare to work’-type programmes will give economically inactive people the opportunity to free themselves from state dependency by gaining a foothold on the first rung of the meritocratic ladder which they will inevitably climb to a life of full ‘independence’. However, evidence suggests that between 1990 and 1995: three out of the four jobs entered from unemployment were temporary, part time, or self-employed with low skill levels. The research found that people subsequently stayed in the jobs they had entered rather than moving to different or better jobs. (Oppenheim, 1999, p. 4, quoting the work of White et al.) For those reasons we do not use the term ‘welfare to work’. In particular, we wish to highlight the continuance of the importance of ‘welfare’ (social security benefits and ‘tax credits’) for many former

8 The Work Connection

out-of-work benefit recipients once they get into work. Indeed, given the fact that state-run job-centres in Britain tend only to be notified of the poorest paid jobs, it would be surprising if poor job-seekers who are directed to work via such places did not tend to end up with statesubsidised low-wage employment – and that is discounting the job seekers going through one of the New Deals where the output is intended to be a low-paid job. Hence, we believe it is more apt to use the term ‘welfare to work-welfare’. In using the term ‘welfare to work-welfare’ we have drawn upon the analysis of King (1995). King uses the term ‘work-welfare’ to examine a political history of what might be called ‘conditionality’. In particular, he focuses upon participation in various employment and trainingrelated programmes as qualifying criteria for welfare benefits in the USA and social security benefits in Britain. However, King’s usage of work-welfare is somewhat static. It is used in an analysis of the political history of qualifying criteria for certain benefits. ‘Work-welfare’ in that context describes what claimants have to do in order to claim benefits whilst unemployed. In contrast, we have adopted the term ‘welfare to work-welfare’ to signify the fact that for many people the move from out-of-work benefits to employment may not mean a complete severance from ‘welfare’. While we have changed the context of King’s term, we have also made it more dynamic. By including the ‘welfare to’ element we have engaged with the fact that ‘work-welfare’ is concerned with a process that attempts to cajole poor people from one set of state-dependency relationships to another in the name of economic efficiency.

Work-welfare policies: what are they? There is no single measure or group of measures which constitutes a definitive ‘welfare to work’ strategy. Rather, there are a range of initiatives which emphasise different facets of ‘welfare to work’ and which are targeted at different groups of claimants. (Deacon, 1997b, p. 38) Given Deacon’s observation, any discussion of ‘welfare to workwelfare’ strategies is likely to be open to the criticism that the ‘wrong’ policies have been focused upon. Deacon focuses upon proposals from various organisations and individuals, not just those in government. Others, however, focus upon more specific areas of policy. Some, for example, focus on the out-of-work policies of work-welfare, like the

Introduction – Making the Connection to Work 9

Jobseekers’ Allowance and the coercive aspects of the New Deals (see, for instance, King, 1995; Finn, 1998; Jones and Novak, 1999; Tonge, 1999). Those publications tend to pay little attention to the in-work cash transferences that have become central to ‘welfare to work-welfare’ in providing financial incentives for people to (re)enter paid employment. Others, while mentioning both in-work and out-of-work policies, make little connection between the two (for example, McKay and Rowlingson, 1999). Those analyses of in-work measures that do exist are often of a ‘technical’ nature, focusing upon the interaction with the tax-benefit system (for example, Ford, 1999). There is also an extensive range of government-sponsored studies evaluating the effectiveness of in-work benefits in aiding the transition to paid employment (for example, Corden and Craig, 1991; Marsh and McKay, 1993; McKay and Marsh, 1994, ch. 3; Walker, 1994b; Ford, Marsh and McKay, 1995, ch. 4; Bryson and Marsh, 1996; Shaw et al., 1996). Beyond such work, there is little discussion, particularly at a theoretical level, of the relationship between in-work and out-of-work work-welfare policies. Gray (1998), for instance, highlights the contradictory relationship between the New Deals of ‘new Labour’ and the National Minimum Wage, while Lister (1998) believes that the New Deals and in-work cash transferences are different sides of the same ‘welfare to work-welfare’ coin. There is a more critical literature developing that focuses upon workwelfare. In particular there are analyses that focus upon the way in which gender relations are structured through the New Deals and inwork cash transferences (for example, Rubery, 1997; Goode et al., 1998; Land, 1999). From a right-wing perspective, Morgan (1995) argues that ‘the family’ is being undermined by the development of in-work benefits which she argues are of more benefit to lone mothers than couples, thereby encouraging lone motherhood. Our focus is essentially on those in-work and out-of-work social security policies developed by governments aimed at encouraging and/or coercing people into paid employment. Those policies are now described as part of various ‘New Deals’. In addition to the New Deal for Young People, for example, McKay and Rowlingson (1999, pp. 194–5) draw attention to the fact that: there are several other programmes that go under the ‘New Deal’ label and which include related policies. These are new programmes dealing not just with those aged 18–24, but also lone parents, disabled people, excluded communities, the long term unemployed and partners of unemployed people.

10

The Work Connection

However, to focus upon the New Deals, or elements thereof, introduced by ‘new Labour’ does not do justice to the issue of ‘welfare to work-welfare’, for it implies that such policies are their brainchild and historically specific to the late twentieth century. However, as The Work Connection demonstrates, Conservative governments from the mid1980s were as much concerned with the relationships between economic inactivity, paid employment and the economy as ‘new Labour’. Moreover, despite the similarity between the policies of the Conservatives and ‘new Labour’ those of the former never really attracted the label ‘welfare to work’. The label that became attached to Conservative policies was ‘workfare’, a concept we examine in depth in Chapter 2. Indeed, the term ‘welfare to work’ arguably became attached to ‘new Labour’ because of its liberal use in the Labour-sponsored Commission on Social Justice (Borrie, 1994). The Work Connection also demonstrates that the concern regarding the relationship between economic inactivity, employment and the economy is not just an early twenty-first-century concern. While forms of social regulation have varied across time, the dilemmas that they are attempting to manage remain remarkably consistent (Grover, forthcoming, 2002). Essentially they revolve around maintaining a commitment to those two institutions – employment and ‘the family’ – that form the foundations of patriarchal capitalism. In The Work Connection we are particularly keen to focus upon the inwork side of ‘work-welfare’ without losing sight of the importance of the close relationship between such ‘benefits’ and the out-of-work benefit regime. In our more contemporary chapters (2 to 5) and our chapter on Speenhamland (Chapter 7) we focus upon those benefits specifically designed to supplement the wages of those people in low paid and/or part time employment: Family Credit (Chapters 2 and 4), Earnings Top-up (Chapters 2 and 5), Working Families Tax Credit (Chapters 3 and 4) and allowances-in-aid of wages (Chapter 6). Chapter 7 focuses upon FAM and Child Benefit (CHB). The observant reader will have noticed that we have not included Housing Benefit (HB) in our analysis despite the importance placed by governments upon HB in the transition from out-of-work benefits to employment (see, for example, Stafford et al., 1998) and the fact that HB is an important source of income for tenants in low-paid employment. That, however, is the reason why we have not included HB: because the main qualifying criterion is an inability to pay one’s rent whether employed or not. However, the main qualifying criterion for the more contemporary in-work benefits that we focus upon is that

Introduction – Making the Connection to Work 11

one is either low paid and/or working part time (an average of 16 or more hours per week). Those benefits are only payable if the claimant is in paid employment. That reason for excluding HB, of course, raises the issue of why we have included FAM, because, similarly, the qualifying criterion for FAM (and later CB) is not directly related to employment: it is having dependent children. However, within the 200-year-old historical development of the debate on children allowances have been raised all the pertinent issues relevant to contemporary in-work benefits: adequacy of low wages to meet ‘family’ commitments; disincentives to work, incentives to claim; impact on the lowest wage levels; impact on the size of the labour market. And of course a constituent criterion of in-work benefits from Speenhamland to WFTC has always been having children. We still await the (universal) in-work benefit for the childless labourer. Hence in-work benefits are a first cousin to children allowances. These issues have rarely been raised in connection with allowances for rent. We also focus upon out-of-work benefit regimes designed to impact upon the majority of economically inactive able-bodied people or the majority of such people within certain age groups. Hence, we examine Jobseekers’ Allowance (Chapters 2 and 5); the New Deal for Young People (Chapters 3 and 5); Parents Plus (Chapters 2 and 4); and the New Deal for Lone Parents (Chapters 3 and 4). In Chapter 5 we also analyse the role of the Youth Training Schemes (YTS) and Young Workers Scheme (YWS) as part of the social mode of economic regulation in the shift to neo-liberal accumulation that primarily affected young people. It is perhaps even more difficult to maintain the distinction between the number of people at whom a policy is aimed in an historical context. We have, for example, focused upon Speenhamland-style allowances-in-aid of wages (Chapter 6). We acknowledge, however, that whether such income maintenance policies were widespread is a matter of historical contention and debate. However, we have included Speenhamland because it is crucial to understanding later debate concerning wage subsidies and indeed children allowances. We shall see, for example, how the socio-economic effects of Speenhamland, as alleged by the Poor Law Commission, have often been introduced into debates about in-work-style benefits to forewarn about their possible consequences. The study of Speenhamland is also central to understanding the complex ways in which, while the social mode of economic regulation can be located in similar discourses, their actual form can and does vary over time.

12

The Work Connection

The even more observant reader will have spotted that we have included in our analysis two policy developments – Parents Plus and Earnings Top-up – that were introduced by the Conservatives on a pilot basis. Because of their nature they were obviously not open to the majority of lone mothers in the case of the former, and single and childless unemployed people in the case of the latter. However, we felt they had to be included. First, the Conservatives attached great importance to those developments in encouraging lone mothers, and childless couples and single people into paid employment. The paper outlining the introduction of Earnings Top-up, for example, makes it clear that Earnings Top-up and Jobseekers’ Allowance were part of the attempt to ‘eradicate barriers to employment’ (Department of Social Security, 1995, p. 7). Second, it was clear that if the pilots were judged successful the policies would have gone national. As it turned out Parents Plus was developed into the New Deal for Lone Parents by ‘new Labour’, and Earnings Top-up was abolished after the pilot period while the merits of an Employment Tax for single people and childless couples were considered (see HM Treasury, 2000). As we have seen, Deacon (1997b) has highlighted the very diverse nature of policies that are often subsumed under the rubric of ‘welfare to work-welfare’. We do not expect readers to entirely agree with those in- and out-of-work policies upon which we have chosen to focus. We would probably be more surprised if they did! However, our attempt has been to analyse what we see as the most significant developments in income maintenance policies in contemporary British society and their historical antecedents.

Researching The Work Connection Much of the research for The Work Connection was derived from the PhD thesis of one of the authors (Grover, forthcoming, 2002). This involved two main fieldwork approaches: interviews with six senior civil servants in relevant policy-making sectors of the Department of Social Security (DSS) and Department for Education and Employment (DfEE) and documentary analysis of a range of official publications and parliamentary debates. The interviews were conducted under the Chatham House Rules which means that officials cannot be identified by name or position. To keep within the spirit of the Chatham House Rules we have not identified the department that the civil servants were from, for certainly in the case of one, (s)he would have been relatively easy to

Introduction – Making the Connection to Work 13

identify by those with a knowledge of the structures of the DSS and DfEE. We have, however, given each civil servant an alpha-numeric signifier so that quotations can be attributed to the same person. An interview with then Secretary of State for Social Security, Peter Lilley MP, has also been quoted from in relevant places. The interviews took place between 1995 and 1996, and varied in length from about an hour to four hours. The interviews were in-depth and semi-structured through a list of topics that the interviewer (C.G.) wanted to cover. The topics included the reasons for developing in-work benefits, the aims and objectives of in-work benefits, the perceived advantages and disadvantages of such benefits, and relationship between particular groups of claimants (most notably lone mothers and young unemployed people) and in-work benefits. Many official publications have been examined in researching The Work Connection. Initially we focused upon those documents from departments most central to the main theme of the book, namely the Department of (Health and) Social Security and the Department of Employment, later the Department for Education and Employment. However, it became apparent that to concentrate on just those departments would be overly restrictive and would, in fact, hinder our understanding of what was occurring in contemporary social security policy. Indeed, we found some of the most useful information in the competitiveness papers published by Conservative administrations, and in the context of ‘new Labour’s’ election victory, papers published by HM Treasury, the department now seemingly responsible for formulating the ‘benefit’ policies of ‘welfare to work-welfare’. We also trawled Hansard debates for relevant discussions upon issues relating to social security, unemployment, ‘the family’ and the economy. Reports of and evidence taken by the House of Commons Social Security and Employment Committees also proved to be useful. Those two sources created a massive amount of data. To make sense of it we have used, as noted, a regulation approach theoretical framework. That framework brought a structure through which we have attempted to analyse the contemporary development of wages subsidies by focusing upon their relationship to changes in the way in which capital is accumulated in Britain. While our choice of theory may be questioned, we do offer what we believe to be an analysis of those developments that has a high degree of coherence. We do not expect readers necessarily to agree with our analysis. Indeed, in presenting our work to various audiences we have encountered more opposition than support. That, however, does not undermine the

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The Work Connection

strength of our arguments, but reflects the nature of academic debates in trying to expand knowledge in the social sciences.

Structure of the book We have written The Work Connection in the hope that different approaches might be taken to its reading. First, we believe that it can be read as a single piece of work contributing to the never-ending debate on the development of social security policy and the relationships between (un)employment and the socio-economic conditions of poorer people. Second, it has been written in such a way that, after reading the introduction, readers should be able to engage with individual chapters as stand-alone essays on various aspects of social security policy. A brief outline of the chapters will aid the reader who plans such a course of action. Chapter 2 focuses upon Conservative approaches to social security policy from the mid-1980s to their election defeat in 1997. The chapter examines the ways in which, in the context of their belief in neo-liberalism as the organising principle of socio-economic life, the Conservatives faced a number of dilemmas concerning economic inactivity, and changing labour and wage markets. The basic premise of this chapter is that the Conservatives were concerned with high levels of long-term economic inactivity (mainly because of issues related to ‘underclass’ outlined in Chapters 4 and 5) and sought ways of reducing it through what Finn (1998) describes as the Stricter Benefit Regime (essentially the Jobseekers’ Allowance) and what we have termed the In-work Benefit Regime (Family Credit and Earnings Top-up). Building on Grover and Stewart (1999), we argue that the combination of those changes to out-of-work and in-work benefits can be understood by the term ‘market workfare’. Market workfare, we argue, is a regulatory mechanism concerned with managing some of the tensions of neoliberal capital accumulation, in particular high levels of economic inactivity, stagnating entry-level wages in the context of the widest gap in earning levels since the nineteenth century, fears of inflationary pressures and a desire to maintain a competitive edge based upon (low) wage levels in globalised markets. Chapter 3 is concerned with the approach of ‘new Labour’ to ‘welfare to work-welfare’ since their election in May 1997. Building on Grover and Stewart (1999, 2000), the chapter argues that ‘new Labour’ have extended ‘market workfare’ by developing the disciplinary nature

Introduction – Making the Connection to Work 15

of the Stricter Benefit Regime and increasing the financial generosity of the In-Work Benefit Regime through higher earnings thresholds and lower tapers of ‘benefit’ withdrawal. Given ‘new Labour’s’ acceptance of neo-liberal explanations of socio-economic issues, despite ( perhaps because of ) their willingness to engage with the notion of social exclusion, we argue that the extension of market workfare is concerned with managing the same range of economic dilemmas concerning labour market activity as those faced by the Conservatives. Chapters 4 and 5 develop the notion of income maintenance policies as social modes of economic regulation by focusing upon the ways in which governments have hoped that market workfare could secure the cultural basis of capital accumulation. The chapters are framed by the relationships said to exist in neo-liberal economic analyses between familial forms and free market economies. Such concerns have more immediately been expressed in the arguments of ‘underclass’ theorists (and in some versions of ‘social exclusion’) who suggest that patriarchal capitalism was threatened by the post-World War Two ‘welfare state’. Chapter 4 argues that the development of market workfare as it relates to lone mother-headed families was essentially concerned with cajoling lone mothers into employment so that their children would be exposed to the role model of an adult attached to formal labour markets. That was crucial if the perceived inter-generational transmission of economic inactivity (‘dependency culture’) was to be halted. We argue that in the case of lone mothers this involved a renegotiation of public patriarchy emphasising participation in formal markets rather than dependency upon Income Support. In doing so we demonstrate the importance of Marxist feminist ideas on understanding the reproduction of labour power to contemporary income maintenance policies. Chapter 5 examines the development of market workfare as it relates to young people (men). Using the concept of fratriarchy we locate market workfare in ‘underclass’ concerns about the so-called ‘barbarism’ of young unemployed males. We suggest that the aim of market workfare was to increase the marriage prospects of such men by encouraging them into paid employment and guaranteeing them an above out-ofwork income. Only through marriage, we show, did policy-makers believe that the anti-social behaviour of young unemployed men (as typified by disorder on social rented housing estates in the early 1990s) could be addressed. In other words, market workfare, as a social mode of economic regulation, was also concerned with re-establishing the private patriarchy believed to have been undermined by young men

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The Work Connection

who were out-of-work. In that sense we argue market workfare is about securing private patriarchy for the long term. Chapter 6 is the first of two historical chapters. In it we consider the place of the first British instance of allowances-in-aid of wages, often just referred to as Speenhamland. We argue that parishes responded to late eighteenth-century agrarian hardship in the context of a moral economy which was being undermined by the new political economy of classical liberalism. Inspired by those theories, fire-brand Utilitarian Poor Law Commissioners embarked on a powerful and totally successful crusade to re-cast poor law relief as an engine for maintaining the free market in low wages via the workhouse test of lesser eligibility. In doing so, they so thoroughly excoriated Speenhamland that it remains the bye-word for administrative incompetence and economic wrongheadedness in subsidising wages. The view of those commissioners and classical liberal economists following them coloured debates on this issue until subsidising wages was revisited in the late 1960s on a Treasury agenda aimed at ‘helping’ poor working families without increasing children allowances. Although Labour baulked at the challenge, Heath’s Conservatives did not, and despite shades of Speenhamland, Sir Keith Joseph steered through Family Income Supplement – Britain’s first modern in-work benefit. From 1970 onwards the story is one of neo-liberal economists, the Treasury and latterly communitarian ‘new Labour’ moving towards a belief in the in-work benefit as the regulatory instrument of choice which can lead the benefit-dependent back to work, reducing unemployment to the ‘non-accelerating inflation rate of unemployment’ (NAIRU); civilise barbaric young men, making them more marriagable; pitch the reserve army of otherwise dependent labour at entry level wages; and so on, and so on. Curiously, the social policy elite and the new economists still hold Speenhamland in roughly the same esteem as did the Poor Law Commissioners of 1832, despite the economic historians’ more sophisticated explanations of the birth-pangs of capitalist Britain. Chapter 7 takes up the ‘Pitt question’ raised at the time of Speenhamland. As the free market in wages cannot guarantee to provide sufficient to sustain a family, should an allowance for children be paid to each family? The state cannot intervene in the wage market, but could it help with a payment for children? With the Poor Law Commissioners’ indictment of Speenhamland, the argument for children allowances became inextricably linked with its alleged bad effects: unsustainable increase in the birth-rate; artificial interference with the minimum free market wage; a disincentive to work. We show how

Introduction – Making the Connection to Work 17

sophisticated, if rather partisan, analysis by Beveridge in the 1930s led to understanding how allowances for children could actually be an incentive to work, rather than claim benefit. We demonstrate that although the role of the Family Endowment Society was important in mounting a spirited campaign, only when Keynes’ economic arguments for a children allowance in the context of winning the war were widely accepted (except by the Treasury) did the political impetus exist which would lead to legislation. FAM was hailed as a solution to many ‘social problems’ – child poverty, the low birth rate, the disincentive to work, the lack of recognition of women as housewives and mothers. Since its much-lauded introduction, FAM languished as a blunt and difficult instrument to use; it was irrelevant to the birth-rate and could only impact on child poverty if actually available for all children, i.e. the first, and be set at so high a rate that it would be politically unaffordable. CHB solved some of these dilemmas, but with the coming of in-work benefits a more focused instrument against child poverty existed, which also impacted on the work disincentive issue. CHB is now seen as just one part (though one has to point out, the most expensive part) of a wider package soon to be collapsed into another Treasury initiative, the Child Tax Credit. Chapter 8, the conclusion, draws together some of the issues that run throughout the book. The first issue examined is the relationship between economic and social regulation through income maintenance policies, and the importance of particular configurations of those policies, as social modes of economic regulation, at specific points in history. Drawing upon more recent work of Jessop (1999), it is suggested that regulation theory helps overcome some of the more problematic aspects of neo-Marxist social policy analyses of the 1970s. The second issue examined relates to the nature of the British national state in the age of globalisation. It is argued that far from the rescinding of power to supra-national and local forms of governance, the British state is consolidating its power and influence, especially in relation to the in-work and out-of-work income of the poorest. In brief, the state in Britain now has the capacity to control the lowest incomes of those in and out of paid employment. It therefore has the ability to manipulate ‘less eligibility’ (or work incentives) as it feels necessary. The next issue addressed relates to the conceptual basis of the reforms in income maintenance policy seen in Britain over the past twenty or so years. It examines the concepts of pragmatism and economic rationalism in relation to those policies, arguing that what may seem as pragmatic policy-making is actually structured through capitalist and

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The Work Connection

patriarchal assumptions, and that in the free market the only rationalism that can be allowed to reign is economically based (see Blunkett, 2000). Finally, the conclusion argues that income maintenance policies in the foreseeable future will involve the mass subsidisation of low wages, with a gradual movement away from the relief of non-employment. That is being done in the name of economic efficiency, and not in the name of the ‘needs’ or ‘welfare’ of the poorest.

2 The Conservatives, Neo-Liberalism and Social Security Policy: the Development of Market Workfare

The argument that income maintenance programmes are essentially concerned with the maintenance and reproduction of the capitalist wage relationship and labour discipline is now familiar. Developing Marx’s argument in Capital, Ginsburg (1979, pp. 47–8), amongst others, argues that such policies help reproduce a reserve army of labour: a group of workers whose commitment to employment is maintained during periods of unemployment through the qualifying criteria for, and low levels of, social security benefit and the stigmatisation of benefit recipients. The maintenance and reproduction of the reserve army is important to capitalist economies because its existence places downward pressure on wages: The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active army of workers; during periods of over-production and feverish activity, it puts a curb on their pretensions. (Marx [1867] 1976, p. 792) While economists tend not to use the term ‘reserve army’ they are nonetheless very aware of this function of unemployed people. As Layard (1997a, p. 190) argues: In any economy there has to be some short-term unemployment to ease mobility and restrain wage pressure by providing employers with a pool of workers able to fill vacancies. But long-term unemployment appears to be largely useless as it exerts very little downward pressure on inflation. 19

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The Work Connection

This is because ‘employers are reluctant to hire them [long-term unemployed people] and they are rendered virtually unemployable’ (Philpott, 1997, p. 20). In those interpretations it is only short-term unemployment or economic inactivity that can help to maintain downward pressure upon wages. Long-term inactivity has no such role as the skills of inactive people become obsolete, while it is held that their basic work discipline and commitment to the work ethic decreases with time. Long-term unemployment and inactivity are manifested in a situation where ‘from the point of view of contemporary capitalism, the so-called “underclass” are deemed to be surplus to current and future economic projections’ ( Jones and Novak, 1999, p. 5). The question then becomes one of why it is that governments feel a need to maintain populations that are superfluous to the requirements of capitalism. The answer to that question could be argued to lie in the legitimisation function of income maintenance policies in capitalist society (cf. O’Connor, 1973). However, we would prefer to focus upon the nature of capitalist development, in particular the way in which labour markets are destroyed, reconstituted and re-regulated in the search for continuing and ever-greater profits. If there is one thing we have learnt from capitalist development, it is that labour markets are not fixed. In this sense, today’s ‘surplus population’ could be tomorrow’s reserve army, or even tomorrow’s labour. Because of the fluid nature of the market it is difficult to foresee what future labour markets will look like and what sorts of labour they will demand. The example of gender casts light on such arguments. In 1951 females accounted for about a third and males two-thirds of all those in employment. By 1981 those proportions had changed to some 40 per cent and 60 per cent respectively and by 1995 females and males each represented 50 per cent of the workforce.1 Such changes have important implications for the reserve army thesis. What Marx meant by the ‘industrial reserve army’ was unemployed people (those described as the ‘surplus population’ by classic political economists such as Malthus, see Chapter 6) who had been displaced by capital in periods of slump and who were hired once economic conditions demanded their labour. Marx made no distinction according to gender (Bruegal, 1979). From the 1970s, however, a number of feminist researchers began to question the way in which the reserve army might be gendered (for example, Beechy, 1978; Bruegal, 1979). The view of women as a reserve army, as Rees (1992, p. 27) points out, was

Conservative Market Workfare 21

difficult to sustain because of the ways in which labour markets are gender-segregated, with women predominantly employed in certain occupations in the services sector and men dominating manufacturing. Indeed, the preference of employers for female labour in the service sector means that their employment has been protected relative to that of men (Walby, 1990). While questions regarding the gendered (and indeed the ethnic structure) of the reserve army are interesting, the approach of such studies has been upon the flows of labour in and out of the labour markets. What is more important from our perspective is the relationship between the reserve army and labour markets. We have already noted the arguments of economists claiming that what we have called the ‘reserve army’ is only effective in its role in depressing wages if it has (or at least is believed to have) a close relationship to the labour market. The argument that long-term unemployment erodes the effect of the reserve army in capitalist societies is indicative of the importance of that relationship. It could be argued that other longer-term forms of ‘welfare dependency’, for example lone motherhood, also dilute the effects of the reserve army. In other words, the greater number of people from the reserve army thought to be available and competing for employment, the more efficient it will be in maintaining downward pressure on wage levels. We argue in this chapter that concern with containing wage levels was an important element in the development of the Conservatives’ ‘welfare to work-welfare’ strategy from the late 1980s. It is also argued that the position of the Conservatives was further complicated by concern over the social costs of economic inactivity (Chapters 3 and 4) emerging during the 1990s. The consequence of those concerns was a belief that more employment had to be created, but created in such a way that market mechanisms would not be greatly disturbed. Policy-makers therefore faced a complex, multidimensional problem: how could they increase the numbers of people in employment while maintaining downward pressure on wages so that inflation – the main constraint on economic growth and development according to the Conservatives – was not ignited? This chapter outlines how the Conservatives attempted to do just that through what we describe as ‘market workfare’: a combination of increasingly authoritarian out-of-work benefits ( Jobseekers’ Allowance and Parents Plus) and the development of in-work benefits (Family Credit and Earnings Top-up). The starting point for the analysis is a discussion of the determinants of ‘workfare’.

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The Work Connection

What is workfare? In demonstrating his geopolitical etymology of workfare, Peck (1998a) shows how the term emerged in the late 1960s in the USA. The first recorded use of the term has ironically been attributed to civil rights leader James Charles Evers (ibid., p. 138). However, its more widespread use came with speeches made by President Richard Nixon who used the term as a counter-pose to ‘welfare’: In the final analysis, we cannot talk our way out of poverty; we cannot legislate our way out of poverty, but this nation can work its way out of poverty. What America needs now is not more welfare, but more ‘workfare’. (televised speech, August 1969, quoted in Peck, ibid., p. 137) Indeed, the term workfare fared a great deal better than Nixon’s reform package – Family Assistance Plan – which was defeated by a coalition of Democrats, welfare advocates and conservatives (ibid., p. 138). The notion that there was a work-based alternative to welfare gathered strength in the 1970s with the introduction of the Work Incentive (WIN) plan, and later in the 1980s with Aid to Families with Dependent Children (AFDC) and in the 1990s with Temporary Assistance for Needy Families (TANF). There seems to be little agreement on what ‘workfare’ actually means. Standing (1990, p. 678), for example, notes that ‘the language of workfare is hazy’, while Lawrence Mead (1997, p. viii) – one of the foremost proponents of workfare – notes that its meaning is ‘sometimes unclear’. In a narrow sense Mead suggests that in the USA workfare has come to describe those schemes in which welfare recipients are forced into jobs in government or non-profit organisations where they receive no wage, but are paid the aid they are entitled to (ibid.). Although Burghes (1987, p. 4) does not restrict the location of employment to the state or voluntary sector, her definition of American workfare is similar: workfare is generally taken to refer to those welfare reforms that have linked employment programmes to income maintenance. It is the obligation on welfare recipients to ‘work off ’ their benefit without additional pay: compulsory ‘work for benefit’. (original italics) Such definitions have also been used in Britain (for example, Musgrave, 1991).

Conservative Market Workfare 23

From the way in which he uses the term ‘workfare’ it could be supposed that Mead (1997, p. viii) takes it to mean ‘any employment programme in which one must participate as a condition of aid’ (ibid.). Such programmes he suggests could involve a number of options: ‘unpaid jobs … education or training or looking for work in the private sector’ (ibid.). By widening the definition to include even searching for a job the concept of workfare becomes a catch-all phrase that could encompass most systems of income maintenance for those people defined as being unemployed. Most systems of relief require recipients to undergo some form of ‘test’ to prove that they are ‘genuinely unemployed’ and/or ‘actively seeking work’. In this broader sense Standing (1990, p. 681) suggests that workfare becomes a test of need: only those in ‘genuine need’ will claim relief, others being deterred by the fact that workfare involves work and by the type of work it offers (cf. Spicker, 1993, p. 108). Hence, it might be argued that workfare becomes the modern version of the workhouse test of less eligibility (see our Chapter 6 and cf. Besley and Coate, 1992, p. 250). Approaches concerned with workfare as an (anti-)social policy leave unanswered the important questions about the position of workfare in the wider economy. In other words, in maintaining labour discipline does workfare have a wider role in capitalist economies? If so, what is that role? And how might state intervention in the free market, particularly in the context of Conservatives’ belief that the market should be left as free as possible from institutional interference, be justified? Jessop argues that some of these contradictions can be explained in terms of the reorientation of the capitalist state (in an ideal-typical sense) in the 1980s from the Keynesian Welfare State (KWS) to the Schumpeterian Workfare State (SWS) ( Jessop, 1994a,b). Later work by regulation approach theorists suggests that KWS can be better understood as the Keynesian Welfare National State to highlight the fact that the virtual circle of economic growth was managed within relatively closed national economies. It is also argued that SWS can be better understood as the Schumpeterian Workfare Postnational Regime: ‘postnational’ because of the trend towards the displacement of state functions to forms of governance beyond the national level; ‘regime’ because of the greater role of non-central government institutions in the delivery of economic and social policies (see Torfing, 1999). In such analyses shifting accumulation regimes also involve a reorientation of mechanisms that in the long run help reproduce those accumulation regimes. In the shift from the KWS to the SWS it has been argued that social policies will become subordinated to the economic requirements

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The Work Connection

of ‘labour market flexibility, innovation and competitiveness’ (Hay, 1993, p. 13). In other words, the process of welfare reorientation will involve a shift away from meeting rights-based need towards meeting the needs of business, whereby productivist and cost-saving concerns are uppermost (Peck, 1996, pp. 195–7). There are profound implications in the shift to the SWS for the form of, and philosophical basis upon which, welfare regimes are premised. Peck (1996, pp. 196–7) argues there will be a move away from the principle of universalism to increasing selectivity in a market-orientated ‘workfarist’ approach. There is of course the theoretical problem of whether regulation theory has explanatory and predictive force here, or merely labels what has been happening anyway. Elsewhere Peck (1998b) suggests work – at whatever wage – and the independence and responsibility that it supposedly brings are asserted over the older welfarist values of needs-based entitlement and income maintenance. More specifically, he suggests workfarist shifts involve:









increasing market selectivity in access to welfare and labor market programs reductions in the levels of welfare support and scope for eligibility criteria the application of different forms of compulsion (or ‘incentives’) to participate in education and training, make-work, or low wage employment ever tighter policing of benefits and surveillance of welfare recipients the imposition of increasingly stringent work requirements the privatisation and deregulation of job training (Peck, 1996, pp. 187–8)

Within what Peck has characterised as ‘workfarist shifts’ it is possible to identify many changes which have occurred over the past decade and a half in British social policy. However, such propositions are based upon the assumption that change is more significant than continuity. So, for instance, the idea that through the SWS social policy will be subordinated to the requirements of the economy implies that in the past social policies have had an ascendancy over economic considerations, in particular the requirements of labour markets. This is clearly not the case, as we demonstrate in Chapter 7 in the case of family allowances, to take just one example. As Novak (1988, p. 200) argues: ‘Throughout its [the social security system’s] history its primary role has been to

Conservative Market Workfare 25

uphold the operation of a capitalist labour market, with its social and sexual divisions of labour.’ The history of income maintenance policies in Britain is one of coercion. It is littered with examples of attempts to limit access to relief to the ‘deserving’ through the application of various eligibility tests (Deacon, 1976, 1977; Digby, 1988; Novak, 1988). The history of discipline and surveillance suggests that the characteristics thought to be indicative of the shift to the SWS are a reflection of historical concerns over maintaining discipline in the light of changing labour markets. Nevertheless, analyses of the shift in accumulation from KWS to the SWS raise important issues concerning the form of social policies developed to support particular accumulation regimes. Shifts in the intellectual understanding and explanation of the ways in which capitalism should be managed have important implications for the form of income maintenance policies. One could argue that while issues concerning labour discipline form a crucial element within social security history, the relationship between those disciplinarian concerns and dominant explanations of capitalist development create different forms of social policy at specific historical junctures. This poses a series of questions to be considered shortly which will demonstrate the power of regulation theory to explain and predict rather than merely label what is going on. How might neo-liberal accumulation be guided by workfare-type administrative instruments (or regulatory mechanism)? How, for instance, has workfare overcome the structural weaknesses of the previous Keynesian accumulation regime? How does it help manage some of the dilemmas of neo-liberalism? By examining such questions we bring together the theory of regulation and empirical observations to argue that developments in social security policy under the Conservatives were part of a project to regulate, through social security policy changes, the emergent neo-liberal accumulation. First we must consider analyses of the economic effects of ‘classic’ workfare. Summarising the work of Burton and Layard, Costello (1993, p. 4) argues, ‘the function of workfare is … to reduce the wage rate at which the unemployed accept work’. Workfare has that effect, Costello argues, because people are deterred from remaining on benefits by the prospect of having to undertake work at below the market rate. It is the deterrent effect of workfare that acts as a mechanism to reduce wage levels. Such an effect is important, for its result should be the creation of more employment. Falling wage costs, so the theory goes, allow employers to increase the number of people they employ. Costello

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(ibid.) notes: If labour market measures [workfare] provided jobs at the same wage as the unemployed had hoped to get, for a given kind of work, on the open market, it would not have this ‘deterrent’ effect. This is an important point in distinguishing between the effect of workfare and the effect of a ‘job guarantee’ at normal wage rates. If all unemployed [people] were offered work, after a certain number of months, which paid most of them the going market wages for the jobs offered, work would be redistributed from job changers to the unemployed. But no extra jobs would be created … Employers … would not hire extra people because the cost of labour would be the same as before. Workfare in such analyses is more of an economic mechanism aimed at creating more employment than a (anti-)social policy merely located in moralising discourses about economic inactivity. That former notion of workfare is one we extend to the out-of-work and in-work benefit developments entrained by the latter governments of the Conservatives. We extend Costello’s argument to suggest that the term ‘market workfare’ is more appropriate. We use the word ‘workfare’ because of the coercion to find work introduced with out-of-work benefits, particularly the Jobseekers’ Allowance and the discursive framework in which Parents Plus was located; ‘market’ because it is existing and newly created employment in the market which it was believed would be filled by those moving from out-of-work benefits to in-work benefits. In contrast to ‘classic’ workfare, government has little need to create employment under ‘market workfare’ as the falling wage levels, it was believed, would increase the total number of jobs available. In that sense, market workfare can be seen as helping to manage some of the dilemmas of neo-liberal capital accumulation.

‘Classic’ workfare: a reflection of command economies? In the early 1990s the debate over workfare reached a peak in Britain. Following the publication of a pamphlet by Conservative MP, Sir Ralph Howell (1991), through the right-wing Adam Smith Institute, it was debated in parliament while the Employment Committee (1996) took evidence on the subject. The committee saw ‘classic’ workfare as involving ‘the requirement that welfare recipients work as a condition of

Conservative Market Workfare 27

public assistance’ (ibid., para. 50). The Conservatives were not in favour, as Anne Widdecombe’s (then Minister of State for Employment) evidence to that Committee demonstrates: workfare was a ‘large scale, national scheme, probably compulsory and in return for benefits’ (Employment Committee, 1994, question 51). She went on to assure the members of the Employment Committee that such a notion was ‘not on our agenda’ (ibid.). Given the discourses through which the Conservatives constructed explanations of unemployment – that those people on benefits were lazy, preferring to wallow in their rights rather than exercising their responsibility to work (see Jones and Novak, 1999) – this objection to programmes that could overcome such personality defects needs to be explained. In many ways the objections, given the Conservatives’ belief in free markets as the organising principle of political, social and economic life, come as no surprise. For them ‘classic’ workfare was seen as wholesale interference with market mechanisms. A memorandum by the Department of Employment submitted to the Employment Committee (1994, p. 4) taking evidence on workfare outlined the government’s reservations. First, there were concerns with cost: it was estimated that to provide six months’ employment for all those who were unemployed for six or more months would be £3.8 billion. Second, there was concern with ‘dead-weight’: the employment on schemes of those people who would have found a job anyway. Third, it was feared that through a ‘substitution’ effect unemployed people on workfaretype schemes would fill positions that would have been filled by other unemployed people. Finally, it was believed there would be a ‘displacement’ effect through which employment opportunities in one part of the economy could be destroyed by schemes operating in other areas of the economy.2 Those objections were clearly premised upon the neo-liberal belief that only the free market can be the begetter of genuine employment and wealth creation (cf. Hayek, 1944, 1975, 1980). In such analyses the state shall have no role in the direct creation of employment. The Conservatives deride economies in which the state is allowed to intervene. As David Willetts, MP for Havant and intellectual inspiration of modern Conservatism3 (Willetts, 1992, 1994), told parliament: Of course it is frustrating when one sees idle hands when there is unmet need, but it is not the job of the state to make those idle hands meet those unmet needs; it is the job of a properly operating labour market. It is not an enormous command economy directing

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The Work Connection

people into jobs that politicians decide are useful. That is not how a free economy works. (Hansard, 20 November 1992, col. 532) The problem the Conservatives had with classic workfare was the thought of the state becoming the employer of last resort. In the final analysis the state could not, in the words of Michael Portillo when Secretary of State for Employment, ‘invent work’ (Employment Committee, 1995, question 57). Essentially classic workfare was rejected by the Conservatives as being too great an interference with market mechanisms. In contrast, it was argued that the activities of the state should be limited to ensuring a stable economic environment to facilitate economic growth and job creation and the development of supply-side measures that would ensure people worked when demanded to do so by the market: The Government have enormous responsibilities in terms of employment and the labour market. The Government’s responsibility is, first, to ensure that there is the right economic framework … Another responsibility of government is to ensure that the labour market works properly … It is a responsibility which calls for supply-side reforms, which the Government pursued in the 1980s. I hope that they will continue in the 1990s … I do not think that the Government have a direct role to intervene in and run the labour market, and themselves to link idle hands and unmet needs by employing millions of people who would otherwise be unemployed. (David Willetts, in Hansard, 20 November 1992, col. 538) The supply-side reforms that Willetts was referring to included the provision of clear work incentives (Family Credit and Earnings Top-up) and ensuring that unemployed people were available for, and actively seeking, employment through the tightening of such criteria (Willetts in Hansard, 20 November 1992, cols, 529–30). Willetts is making a distinction between the activities of the state in testing unemployment through actively seeking and availability for work criteria and subsidising low wages through in-work benefits. In fact, it is arguable that if FC was to take its ‘pivotal position in British social security’ (Walker, 1994b, p. 171), the tightening of the actively seeking and availability for work criteria was required. The two are closely related, for it was believed that the economic rationalism of individuals needed to be prompted on the threat of benefit withdrawal. The policy designed to put downward pressure on wage levels was emerging.

Conservative Market Workfare 29

Social security and the Conservatives I think when the government came in ‘79 it had a very firm belief that incentives were important and that incentives looked at in the sort of cruder numerical measure – how much money you could get out of work, compared to how much money you could get in work – was an issue. (civil servant B) The comments of civil servant B aptly sum up the direction of the Conservatives’ action on social security benefits. Since the election in 1979 there has been an almost continuous effort in social security policy-making to reorientate benefits for able-bodied people to ensure that there is no risk that they may provide a financial disincentive for unemployed people to take paid employment. In the context of the postwar social security system there was felt to be essentially two ways of ensuring the existence of financial incentives to take paid employment that, as we shall see in The Work Connection, have distinguished historical pedigrees. On the one hand, benefits available to non-employed people could be reduced in value in relation to earnings. On the other hand, wage top-ups could be paid to those taking low-paid employment. The Conservatives pursued both those policies. Early in their first term of office the Conservatives focused upon the former strategy. Unemployment benefit was most closely associated with the Keynes–Beveridge welfare settlement; hence the Conservatives placed it first in a general assault upon social insurance benefits in 1980. That year, the Conservatives made clear their intentions with regard to social insurance: earnings-related additions were abolished and, in future, increases in insurance-based benefits were to be pitched in line with price rises, rather than increases in wages. Indeed, 1980 was particularly harsh because short-term insurance benefits, including unemployment benefit, were increased at a rate 5 per cent below inflation (see Alcock, 1990). Social insurance benefits, especially unemployment benefit, were seen as being particularly problematic. The economic justification for that view was outlined in the Green Paper, Reform of Social Security, associated with the Fowler reviews and reforms of the mid-1980s: While it is one of the functions of the social security system to help those who are unemployed, it is self-defeating if it creates barriers to the creation of jobs, to job mobility or to people rejoining the

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The Work Connection

labour force. Clearly such obstacles exist if people believe themselves to be better off out of work than in work; or if employers regard the burden of national insurance as a substantial discouragement to providing new jobs. (Secretary of State for Social Services, 1985a, para. 1.12) The Green Paper made it clear that the Conservatives believed there to be a tension between providing unemployment benefits and creating disincentives for unemployed people to take paid employment and discouraging employers from creating new jobs. In addition, the Green Paper held that taxation to pay for benefits was ‘severely damag[ing] the prospects for economic growth’ (ibid.). Hence, there was a dual attack upon the existing configuration of social security benefits: that they created disincentives and that they were too expensive for the economy to support without creating economic problems. The existing social security system, in particular social insurance benefits (especially unemployment benefit), was defined as having a detrimental impact upon Britain’s economic prospects. They were seen as an expensive burden that created rigidities in labour markets by providing disincentives to work. In regulation approach terms it is possible to argue that the existing benefits were discursively constructed as being part of the previous social mode of economic regulation associated with Keynesianism. If the flexibilities upon which neo-liberal accumulation was premised were to be supported a new configuration of social security benefits would be required – a new mode of regulation. The foundations of that new configuration were presented during the Fowler reforms when FC was introduced. We believe a case can be made for regarding the 1980s as an important juncture in the history of social security policy. While in many ways Alcock (1990) is right to point to the fact that the emphasis upon means-testing in the 1980s – particularly in the Fowler reviews – was an extension of policy developments since the 1960s, the nature of the reshaping of social security should, in hindsight, not be underestimated in at least two other ways. First, the Fowler reforms screwed down the coffin lid on the collectivist principle of social insurance. It is true there continued to be an interest in newly developing forms of social insurance among some policy commentators (for example, Borrie, 1994; Silburn, 1995; Deacon, 1999; Lister, 1999) and especially former Minister of Welfare Reform Frank Field (Field, 1995, 1996).4 However, it is clear that the future for social insurance is bleak. Fowler

Conservative Market Workfare 31

consigned the Keynes–Beveridge settlement to history as an expensive failure, part of an outdated form of state planning and control and something of which the free market is well rid: To be blunt the British social security system has lost its way … Since the Second World War, it has grown five times fast than prices, twice as fast as the economy as a whole … resources have not always been directed to those most in need … the system has resulted in a multitude of benefits with overlapping purposes and differing entitlement conditions … at times [it is] impossible for the public to understand. (Secretary of State for Social Services, 1985a, from paras 1.1 and 1.2) The second major development in the Fowler reforms was the introduction of a particular form of means-testing – the subsidisation of low-paid and/or part-time employment. That observation is important for we are often confronted with the image of the Conservatives objecting to state-organised social security benefits, but as we can see in the introduction of FC, even with their neo-liberal philosophy, the Conservatives were not opposed to all forms of social security. They opposed those benefits indicative of Keynesian state control and direction where the benefit was a dead-weight cost on employers. Extending that argument, during the 1990s particularly influential figures in Conservative policy-formation were arguing that certain forms of social security benefits had important economic functions (for example Willetts, 1992). By the mid-1990s leading Conservatives believed that the ‘right’ form of social security would actually provide a competitive edge in global markets! So, for example, in the White Paper Competitiveness: Forging Ahead, it was highlighted how initiatives in employment and labour market policy (that clearly included social security) would ‘support economic growth by promoting a competitive, efficient and flexible labour market’ by helping and encouraging unemployed people ‘to compete effectively for jobs’ and providing them with financial incentives to work (President of the Board of Trade et al., 1995, p. 101). In the 1990s there was an important concordance between employment and social security policy. That relationship highlighted the fact that the objection of the Conservatives was not to social security benefits per se, but to certain forms of benefits. The fact that FC and ETU were both new benefits introduced by a government ‘still committed

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The Work Connection

to reducing the costs of social security’ (McKay and Rowlingson, 1999, p. 69) demonstrates that point. While it could be argued that those inwork benefits were part of an overall strategy to save money – it should cost less to provide an addition for people in employment than pay a complete subsistence benefit to those without employment (see Chapter 7) – the costs of FC rose quickly from £180 million in 1986 to over £2 billion in 1996 (ibid., p. 112). After Peter Lilley became Secretary of State for Social Security there was an increasing interest at the Department of Social Security in the ways benefits interacted with labour markets and labour market policy.5 The keen interest in the relationship between the labour market and social security policy helps explain the very rapid period of change ushered in after 1990 and it is that to which we now turn.

The stricter benefit regime Finn (1998) argues that changes in social security policy from the late 1980s can be understood as the emergence of a stricter benefit regime. The stricter benefit regime: was spelt out in a confidential policy review prepared for the Employment Secretary in 1989. This outlined what it called the ‘carrot and stick’ approach. If claimants were ‘poorly motivated’ and failed to find work or take up places on government schemes then more pressure, or the stick needed to be applied. While making adult schemes compulsory was ‘not politically feasible in the short term’ pressure could be increased through the rigorous application of availability and job seeking activity tests alongside the introduction of compulsory re-motivation courses. (Finn, 1998, pp. 107–8) The Jobseekers’ Allowance introduced in October 1996 was an important development in the stricter benefit regime, for it: reflected the government’s contention that, even though most unemployed people may be genuine about wanting a job, too many were ineffective in their job search or were too selective about the jobs they wanted. (ibid.) The most important aspect of the JSA from our perspective was its attempt to ‘improve the operation of the labour market’ (Secretary of

Conservative Market Workfare 33

State for Social Security and Secretary of State for Employment, 1994, p. 5). The way in which it was proposed JSA would do this was by ensuring that unemployed people (renamed Jobseekers) had little option but to accept the employment available in their locality: applicants cannot refuse jobs on the grounds of hours or conditions of employment and are unable to determine a minimum wage for which they are willing to work without risking an accusation of not being available for work. To confirm such details a Jobseeker’s Agreement has to be signed which inter alia covered any restrictions on hours or pattern of availability, type of work, action to be taken to seek work and improve prospects. Restrictions in employment conditions and refusals to take work result in benefit suspensions that are made by ‘client advisers’ (in contrast to the previously independent adjudication officers) who have set targets as to the number of suspensions they have to impose (see Jones and Novak, 1999, pp. 66–70). The major restructuring of unemployment benefit the JSA represented was not just a meanspirited attempt to reduce cost (cf. McKay and Rowlingson, 1999, pp. 69–70), but, as Finn (1998) hints, was a concerted effort to align out-of-work benefits for those officially defined as unemployed to increasingly flexible labour markets (cf. Department of Social Security 1995, p. 9). Finn’s notion of the stricter benefit regime (SBR) is a useful way of highlighting the continuance of labour discipline concerns in the 1990s. However, there are two problems. First, it only focuses upon those people officially defined as unemployed. Second, it does not take into account wider issues of the ways in which discourses constructing certain groups of benefit recipients can act as a disciplinary tool. We would like to extend the concept to demonstrate how a SBR was also emerging for lone mothers during the 1990s. The Conservatives introduced changes in benefits for lone mothers, the result of which has been an increasing commodification of their ‘formal’ labour power. One of the earliest indications of this trend was in discussion concerning relationships between employment, maintenance (child support) and in-work benefits: Receiving maintenance in itself makes it easier to go to work. Maintenance payments are income which the caring parent receives in any circumstances. So, it is a ‘portable income’. It is additional to earnings. Receiving maintenance can also help to make the transition from Income Support into work easier. (Lord Chancellor et al., 1990, p. 41)

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The Work Connection

By highlighting the possible role of maintenance in transitions to employment the focus becomes one of the ways in which the CSA was concerned with labour as well as familial discipline. It was being suggested by the Lord Chancellor’s Office that lone mothers were at least available for work if not ‘technically’ unemployed. Hence, maintenance was defined as a ‘portable income’ of more benefit to mothers if they are in employment, even if they are in receipt of FC. Whilst such measures may be beneficial to lone mothers wishing to return to employment, whether they actually did so was argued to be their choice (Tony Newton, then Secretary of State for Social Security, in Hansard, 29 October 1990, col. 731). However, the ‘choice argument’ about lone mothers moving into employment via in-work benefits came before 1993: ‘the year of the lone parent’ as Mann and Roseneil (1994; also Roseneil and Mann, 1996) describe it. After 1993 the emphasis has increasingly been on encouraging lone mothers to leave full benefit dependency and take employment. The piloting of the Parents Plus (PP) scheme (Department of Social Security press releases 96/202; 96/266) was a clear statement that lone mothers should increasingly be in contact with the labour market. The Benefits Agency claimed that no pressure would be put upon those who did not wish to work, while the caseworker approach of the PP attempted to identify barriers facing ‘non-employed’ lone mothers getting a job. PP seems to have been regarded as an innocuous programme, since it has been neglected by recent literature on poverty and social security (for example, Jones and Novak, 1999; McKay and Rowlingson, 1999). However, it is our belief that PP was a significant departure in income maintenance policy for lone mothers as it represented a decisive step towards saying lone mothers should be working, something with which ‘new Labour’ have no problem. That shift in thinking can be located in the ‘underclass’ discourse associated with Murray (1990, 1994), Morgan (1995) and Dennis and Erdos (1993). That discourse framed the views of, and was reinforced by, ministers and the media who were involved in a vicious campaign condemning lone motherhood and exerting pressure upon lone mothers to leave benefit dependency through the stigma of being labelled as feckless scroungers, responsible for breeding irresponsible and delinquent children (cf. Lilley, 1992; Redwood, 1993). As Ginsburg (1979, p. 48) argued in the late 1970s, the labelling of ‘claimants as undeserving or scroungers assists the preservation of work incentives by rendering claimants socially as well as economically less eligible’.

Conservative Market Workfare 35

For those officially defined as unemployed as well as lone mothers, changes in the social security benefits in the 1990s can be described, as Finn (1998) suggests, as a stricter benefit regime – the aim of which was to increase the supply of labour to increasingly flexible labour markets. In other words, the aim of JSA and PP was to strengthen the commitment of the reserve army to the labour market. However, out-of-work benefits were just one part of that SBR. In-work benefits too were part of that disciplinary regime.

The in-work benefit regime Jones and Novak (1999, pp. 56–7) argue: Social security has never been just a system for maintaining those without sufficient income; throughout its history this aim has been over-ridden by the perceived need to fashion benefits according to the requirements of the labour market. So it is that, except for those with children, for whom a low-wage subsidy was introduced in the 1970s, people in work are not entitled to claim benefit, no matter how great their need. The principle of less eligibility entombed in the 1834 Poor Law Amendment Act – that the relief of poverty should always be made less attractive than the condition of the lowpaid – lives on, driven relentlessly downwards by the deteriorating conditions of the labour market itself. While the substance of Jones and Novak’s argument is now not that controversial – indeed, we have come to similar conclusions ourselves – we would argue that the distinction they make between the disciplinary aspects of out-of-work social security benefits and in-work benefits (their ‘low wage subsidy’) is misguided for several reasons. First, in-work benefits have become more widespread and central to the social security system than they were in the 1970s, even to the extent of the availability (discussed below) of such benefits to childless couples and single people through the ETU. Second, in-work benefits have become incorporated into the process of maintaining ‘less eligibility’ for, by subsidising low wages, they ensure the poorest labourers are better off than the economically inactive. In other words, in-work benefits maintain rather than erode labour discipline. How this works should become clearer as we go on to discuss the relationship between out-ofwork and in-work benefits. Family Credit (FC) was introduced as part of the 1986 Fowler reforms. Its purpose was to supplement the income of people with

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The Work Connection

dependent children working full-time6 who were deemed to be in receipt of low wages. The rationale for the introduction of FC was an attempt to tackle the so-called ‘unemployment trap’ and ‘poverty trap’, explained by the government as ‘ensur[ing] that families do not find themselves worse off in work than they would be if they are not working’ and would ‘avoid the position, which can occur now where net family income can be reduced as earnings rise over significant ranges of earnings’ (Secretary of State for Social Services, 1985d, para. 4.46). FC therefore was presented as an incentive to encourage unemployed people to take low-paid employment by attempting to ensure that compared to their out-of-work benefit income they would have a higher income in work. In other words, those out-of-work are once again clearly realigned as being ‘less eligible’ than those in work. Although take-up was slow at first, when FC was abolished in 1999 nearly 800 000 families with dependent children were receiving it (Department of Social Security press release 99/240). All the considerations about low entry level wages and differentials between benefit income which apply to families with children also apply in an economic sense to childless couples and single people. The only justification for dealing first with families with children has to be political. It could be that there was a judgement about children as innocent parties who should not bear too directly the burden of poverty visited upon their unemployed parents. The more likely explanation is that it was felt the extra dependants’ allowances which children attract had to be off-set to make low-wage work more attractive. Enter the Earnings Top-up (ETU) pilot scheme as the measure announced in the 1994 Budget to manage the same dilemmas for childless couples and single people (Department of Social Security, 1995). The way in which the ETU was paid and it objectives were similar to those of FC: to make low-paying employment more financially attractive through subsidising low wages: The pilot of the Earnings Top-up aims to overcome the disincentive to work inherent in any social security system, especially for those with limited earning power. (ibid., 1995, p. 2) The implications are clear. Entitlements to out-of-work benefits inherently contain disincentives which are likely to be greatest for those who can normally expect to earn low wages.

Conservative Market Workfare 37

The take-up of ETU was rapid. Just four months after its launch in October 1996, it was announced that ‘over 7,500 people are now benefiting from this new initiative’ and that it ‘was estimated that 20,000 people would be in receipt of ETU by the end of the three year pilot and, on current trends, it is likely that this target will be achieved easily’ (Department of Social Security press release, 97/026).

The relationship between the stricter benefit regime and the in-work benefit regime: market workfare For Finn the SBR was represented by the increasing coercion of unemployed people into taking employment. We have extended those arguments to suggest that in the discursive context of lone motherhood, the PP pilot was a move in the direction of putting pressure upon lone mothers to work. In the following chapter we see how this trend became exaggerated under ‘new Labour’. Finn’s idea of the SBR is also limited by its focus upon out-of-work benefits only. As we have pointed out, Finn pays no attention to developments that were also occurring to in-work benefits, but he was not alone. Social security analysts and commentators treat in- and out-of-work benefits separately, as if they had no effect on each other (cf. McKay and Rowlingson, 1999). It is our contention that the development in tandem of increasingly coercive out-of-work benefits and increasingly generous and more inclusive in-work benefits was no coincidence as they formed a new policy mechanism – market workfare – that eschewed the old-fashioned ‘contingency’ approach of the Beveridge social insurance tradition. Civil servant A, for example, told us that the thrust of social security was moving towards: more to saying, ‘you must do what work you are capable of and we will top up your income a bit’, whereas before it was all or nothing … it was a condition of being sick or unemployed that you did not do any work to get your benefit. That is now changing. Indeed, under the Conservatives it was increasingly becoming a condition of benefit receipt that the applicant did some paid work. To ensure that happened ‘a more unified system of in-work and out-of-work benefits’ (President of the Board of Trade et al., 1995, p. 107) was required, a system that would ‘minimise the effects of the “unemployment trap” and reduce the disincentives for the unemployed and their partners to find work’ (ibid.). The social security analysts could hardly have had a

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The Work Connection

clearer indication from the government that at least they thought the two were related. That close relationship between out-of-work and in-work benefits meant that Britain was rapidly heading towards a situation in which ‘market workfare’ was becoming an integral part of the benefit system. Our notion of ‘market workfare’ differs subtly from other arguments – most notably those of Costello outlined above – that suggest the role of workfare is to put downward pressure on wage levels. Costello suggested downward pressure was gained through a ‘deterrent effect’. In our conception that effect is gained in two ways. First, the out-of-work benefit developments – the SBR – aimed to increase the number of people competing for employment and increase their intensity of job search. Second, in-work benefits – the direct subsidisation of wages – aimed to further reduce wage levels. We use the term ‘market workfare’ because it is not the government who are creating the employment on which this system of workfare is dependent. Indeed, we have seen how opposed the Conservatives were to the idea of classic workfare because of the role the state would have in such schemes and the alleged distortions in the markets which would result from that role. In market workfare such perceived problems do not exist because no demands are made upon government to create employment. In contrast, access to employment is controlled by the market and its agents. The interesting issue to which we now turn is why the Conservatives felt it necessary to develop market workfare.

Market workfare: a neo-liberal social mode of economic regulation As we have seen, in regulation theory the accumulation regime has to be ‘guided’ by a congruent social mode of economic regulation if that regime is to be reproduced in the longer term. It is our contention that market workfare was part of the development of a neo-liberal social mode of economic regulation, for it was hoped that in-work benefits would help overcome some of the regulatory dilemmas of neo-liberal capital accumulation. In fact, with the deregulation and liberalisation of the market marked by ‘radical Thatcherism’ several regulatory dilemmas emerged or were intensified which the state tried to manage through market workfare. The first of these dilemmas was the stagnantly high unemployment that had emerged among undervalued labour. The 1980s witnessed a ‘collapse’ in the demand for undervalued (male) labour (Nickell and

Conservative Market Workfare 39

Bell, 1995; see also, Balls, 1993; Gregg, 1993). Moreover, it was forecast that the unemployment experienced by undervalued labour was unlikely to recede in the foreseeable future (Secretaries of State for Employment et al., 1992, para. 1.10). Second, there was a fear that increases in employment would merely fuel inflation if the supply of labour seeking work was outstripped by its demand (President of the Board of Trade et al., 1994, p. 52). Finally, the relative wages of undervalued labour were falling, while their real wages were stagnating. This led to the greatest wage inequality in Britain since the 1880s (Balls, 1993, p. 3; Low Pay Unit, 1995, p. 9; Osborne and Nichol, 1996, p. 480). The consequence of widening earning differentials for benefitdependent people was that: entry positions available to those currently not in employment have become increasingly unstable and low paid … New engagements … increasingly offer far lower wages relative to continuing jobs. Indeed, real earnings in jobs taken by those out of work have barely risen at all since 1980. (Gregg and Wadsworth, 1995a, pp. 73–4) Elsewhere Gregg and Wadsworth (1995b, p. 211) suggest that the majority of people on benefits may be discouraged from seeking employment because of the so-called ‘poverty trap’ as: Less than one-in-five entry jobs paid above median weekly earnings (£224 per week), while over half paid below half median (£112), and a surprising third paid below a quarter of median wages. What we have defined as market workfare was to be an important part of the strategy in managing the regulatory dilemmas just outlined. In other words, market workfare was a mechanism to help manage the inherent contradictions brought about by the shift to neo-liberal accumulation in the context of globalised markets and competition and a belief that (low) wages provided an important competitive edge. In the first instance, it was felt that more low-paid employment could be created, particularly through the ETU. Civil servant B, for example told us: Civil servant B: Well, I mean I have been persuaded it [ETU] won’t work unless it has an effect on wages. It depends on how much of an effect on wages. CG: So … a … degree of effect then, would be acceptable?

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The Work Connection

Civil servant B: The argument my economist colleagues use is: since there is no shortage at the bottom end of the labour market, it is entirely a demand thing. And the only way you will increase demand is by reducing the cost of labour to the employer, and so unless it does drive wages down a bit, nothing will happen. One of the aims of the ETU, therefore, was to reduce ‘market’ wage levels in the belief that more employment would be created in the undervalued section of the labour market in which demand for labour has collapsed. The possible effects of FC on wage levels were argued to be more difficult to measure. In giving evidence to the Social Security Committee (1992, question 43), for instance, Peter Lilley, then Secretary of State for Social Security noted that: There is always a danger when you help top up the pay of those in work that it could have the effect of depressing wages … In theory it [Family Credit] ought not to be powerful enough to depress the level of pay below what the market will bear … There is no way you can measure what people would have paid in the absence of the Family Credit, so it cannot be a measurable fraud or abuse. We just have to keep our eye on how the market is working. In Lilley’s account of FC the organic nature of ‘the market’ – the consequence of the dispersed decisions of individuals – provides a disguise for possible (downward) changes in wage levels. Nevertheless, he is clearly not very concerned about the possible effects of FC on wage levels. In other words, while the Conservatives argued that individuals should be paid a wage reflecting their productive value, and should not be paid more than that by the likes of a minimum wage (President of the Board of Trade et al., 1995, p. 110), it was quite acceptable to drive wages below such levels! Second, market workfare had a role to play in avoiding inflationary pressures if employment levels did increase, for it was believed that in-work benefits would increase the supply of labour. Civil servant D, for example, told us that: What you are doing if you have in-work benefits is you are essentially lowering the wage at which it becomes financially sensible to work. So you are creating a situation where more people want to work at any one wage level because the work is actually worth more to them.

Conservative Market Workfare 41

Civil servant D’s argument, based on econometric modelling, assumed an impressive degree of economic rationality on the part of unemployed people. Through such reasoning he was able to argue that inwork benefits had a role to play in increasing the supply of labour which, in turn, and presumably without them knowing it, would contribute to a downward pressure on inflation. Third, market workfare was seen as a mechanism for maintaining Britain’s competitiveness in the higher, value-added industrial sectors. In-work benefits were the Conservatives’ free market preference to a national minimum wage (NMW), as was highlighted by several civil servants we interviewed. Essentially both in-work benefits and a NMW (set at an adequate level) should offer benefit-dependent people a financial incentive to go to work. However, it was thought by the Conservatives that a NMW would create increasing wage costs as wage differentials were re-positioned: The minimum wage would have … effects. One is that the unskilled worker in the kitchen would receive the same pay [as the skilled cook] and the skilled cook would want the differential reinstated … The restoration of differentials would lead to an oldfashioned increase in wage cost that would drive up unemployment. That is why a minimum wage would cost 800,000 jobs at £4 an hour and more than 1 million jobs at £4.26 an hour. (David Willetts MP, in Hansard, 1997a, col. 952) In contrast, in-work benefits were supported, for it was felt they would not interfere with differentials and as a consequence they would not discourage individuals engaging in training or education. Hence, what we have termed ‘market workfare’ was seen as an important mechanism in buttressing Britain’s position in the global economy, for it was believed that the existence of adequate differentials provided individuals with the incentives to develop their skills and encouraged employers to (re)train their staff (Secretaries of State for Employment et al., 1992). The site of wage competition therefore was not within the under-valued sector of the labour market, but at the level of differentials further up the pay-scale. Britain has to compete, particularly with European countries, to attract inward investment and to sell mainly high value-added manufactured goods. Wage levels are seen as an important element of this. So, for instance, in 1995 the government was able to boast that ‘UK hourly labour costs for production workers in manufacturing have

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The Work Connection

been below those in other G7 countries for many years’ (Deputy Prime Minister et al., 1996, p. 55). The fear was that a minimum wage would increase those costs, making Britain less competitive through the demand to maintain differentials if a minimum wage was introduced. This was not seen as an issue for the market workfare approach because it did not directly increase the wages of the lowest paid employees, but increased their net income through wage subsidies.

Conclusion This chapter has analysed the ‘welfare to work-welfare’ strategy the Conservatives followed from the late 1980s. It has been argued that in order to deal with a number of economic dilemmas, the Conservatives embarked upon the programme of welfare reform we have termed market workfare. Its aim was relatively simple: to reduce wage levels in order to increase the number of people in formal employment. That aim was pursued in two main ways. First, market workfare aimed to increase the intensity of the relationship between economically inactive people (the reserve army) and the labour market. In other words, it attempted through discursive and administrative mechanisms to increase the potential supply of labour. The greater the supply of labour and the greater the competition for existing employment, the greater the possible effect on wages would be. Second, we have seen how the subsidisation of wages through in-work benefits was aimed directly at decreasing wage levels. What that shows is that while the reserve army of labour is a crucial phenomenon for capital, its reproduction and management, in particular the management of its relationship to labour markets, varies across time, depending upon a complex configuration of social and economic trends, thought and discourse, coupled with political priorities. The origins of such measures lie in the shift of economic hegemony from Keynesian demand management which initially dominated economic thought in the post-World War Two period, to that of neoliberalism. The neo-liberal accumulation regime, premised upon flexibility, liberalisation and free markets at best exaggerated and at worst created a number of dilemmas – high and stagnant unemployment and stagnating wage levels among under-valued labour and fears of inflationary pressures – that required regulating if economic expansion were to be sustained. Social security was one of the institutional sites in which that regulation was to occur, because the state actually has the administrative ability to effect change there.

Conservative Market Workfare 43

The Conservatives were not attempting wholesale withdrawal from the provision of social security benefits, but wanted to ‘re-tune’ them, so to speak, to the new economic order where the market was the organising principle. Therein lies the difference between ‘market’ and ‘classic’ workfare. The latter is premised on an idea that the state could create employment without it having a wider impact. In contrast, market workfare, although intervening in the market, does so on its own terms. The idea was that through adjusting the benefit system, market mechanisms could be altered without having a detrimental impact. Indeed, if anything the impact was thought to be beneficial: greater numbers of people in employment while containing inflationary pressures. In two decades the Conservatives had moved from a position of abusing social security benefits as undermining accumulation, to one where it was thought that certain forms of benefits could be used to regulate accumulation. But of course every change brings a problem. The payment of benefits was becoming more dependent upon active participation in the labour market. Those unable to work for whatever reason were left to languish on increasingly inadequate out-of-work benefits. That trend has became even more visible under the ‘welfare to work-welfare’ programme of ‘new Labour’.

3 ‘New Labour’ and the Modernisation of Welfare: Extending Market Workfare

In the previous chapter we outlined the concept of market workfare: a social security policy configuration made up of closely related authoritarian out-of-work benefits and new, or newly developed, in-work benefits. We argued in the last chapter that market workfare was aimed at managing some of the regulatory dilemmas of neo-liberal capital accumulation. In particular, we showed that the aim of market workfare was to increase the number of people in employment, while maintaining a downward pressure on wage and inflation levels thus maintaining Britain’s low-paid competitiveness in the global economy. This chapter analyses the ‘welfare to work-welfare’ strategy pursued by ‘new Labour’ elected in the landslide victory of May 1997. Elsewhere (Grover and Stewart, 1999) we have argued that the policies of ‘new Labour’ maintain distinct continuities with those of the previous Conservative governments. That observation was made after about six months of the ‘new Labour’ administration. Well into the second half of Blair’s first term, we can see no reason to modify that judgement. In brief, we believe that while ‘new Labour’ may not have been pursuing exactly the same policies as their Conservative predecessors, it is nevertheless extending market workfare. The main deviation from the Conservatives has been the introduction of the National Minimum Wage (NMW) which will be discussed in this chapter. The starting point for our analysis is ‘new Labour’s’ approach to economic growth.

‘New Labour’ and the free market The Labour Party had been out of office for over 16 years. The whole economy had been transformed from that which ‘old’ Labour had 44

‘New Labour’ – Extending Market Labour 45

known in the 1970s. We saw in the previous chapter how under the Conservatives a new accumulation regime based upon neo-liberalism emerged and was nurtured. The central features of neo-liberal accumulation, as we have seen, included flexibility and the promotion of an open (free market) economy. The traditional postwar explanatory paradigm of Keynesian economics had collapsed. Economic policies underpinned by Keynesian nostrums were held to exacerbate economic dilemmas, in particular unemployment, by introducing rigidities into labour markets thus fuelling inflationary pressures. Inequality was seen as a necessary part of neo-liberal accumulation as it was deemed to offer incentives to entrepreneurs to take risks in the pursuit of wealth creation. Some of that wealth was going to ‘trickle down’ to poorer groups in society – how was not made clear. With their belief in greater equality of outcome, commitment to social ownership and demand management, how was ‘new Labour’ in power going to deal with the new economic order? The evidence suggests that ‘new Labour’ have had little difficulty embracing neo-liberal capital accumulation. Indeed, ‘new Labour’s’ commitment to neo-liberalism and its rejection of Keynesianism in what has been described as ‘supply-side socialism’ has been acknowledged by many commentators (Thompson, 1996; also Gray, 1998; King and Wickham-Jones, 1998). It has been noted that ‘new Labour’ in government have accepted the global character of the free market as ‘natural’, without any viable alternative (cf. Jacques, 1998; Hobsbawm, 1998). This should be of little surprise, for in 1996 it was forewarned by the Godfather of the project himself that: ‘new Labour’s … mission is to move forward from where Margaret Thatcher left off, rather than dismantle every single thing she did’ (Mandelson and Liddle, 1996, p. 1). Indeed, the Prime Minster has described aspects of Thatcherite neoliberalism as being ‘necessary acts of modernisation’ (Blair, 1998, p. 5). In particular, ‘new Labour’ have come to accept that the role of the state in economic matters should be limited to creating the right conditions for economic growth: As it was put in the 1992 [Labour] Manifesto ‘Modern government has a strategic role, not to replace the market, but to ensure that markets work properly’. This might entail interaction ‘to set standards to protect consumers’, to ‘improve training or safeguard the environment’ but not intervention of a kind to short-circuit or supplant market forces. (Thompson, 1996, p. 45, original italics)

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More recently such ideas have been reiterated as ‘striking the right balance between minimum standards and open and competitive markets’ (Brown, 1999c, p. 4). Those minimum standards include the low National Minimum Wage (discussed below), unpaid parental leave and the watered-down Working Time Directive. While the introduction of those measures mark a departure from what was likely to have happened had the Conservatives stayed in power, they need to be set in the context of ‘new Labour’s’ belief that Thatcherism did not go far enough in terms of competitiveness, flexibility and entrepreneurship: the new economy will need more competition, more entrepreneurship, more flexibility … reform was needed in the 1980s to create more flexibility and that modernisation is continually needed to upgrade our skills and create a more adaptable workforce. (Brown, 1999f, pp. 4, 5) It is only through increased flexibility, competition and greater levels of entrepreneurship that ‘new Labour’ believes ‘employment opportunities for all, the modern definition of employment’ (Chancellor of the Exchequer, 1999, para. 4.1) can be delivered. ‘New Labour’ aim to provide the opportunity to work to all those who wish to. Little is said of the nature of those opportunities and the discourse aims to individualise economic inactivity, for if the opportunity to work exists, those not working can only be so because they choose not to take up those opportunities. ‘New Labour’ have essentially accepted the neoliberal approach to accumulation: highly flexible, competitive free markets are seen by ‘new Labour’ as the route to greater wealth and employment levels (see Blair, 1995, 1996, 1997a,b; Brown, 1995, 1999a,b,c,d,e,f). However, in accepting neo-liberal capital accumulation, ‘new Labour’ have also had to accept arguments that suggest certain phenomena and institutions can act to undermine markets. We saw in the previous chapter that inflation is seen as being the predominant phenomenon that undermines free-market capitalism. The discursive construction of economic policy since the 1970s has been that if economic growth and increasing prosperity are desired, inflation must be kept firmly under control. Such a discourse shapes ‘new Labour’s’ economic policy. The control of inflation provides parameters for ‘new Labour’s’ strategy for economic growth. Hence, ‘Labour’s economic objective is to deliver the highest possible level of growth consistent with low and stable inflation’ (Labour Party, 1995, p. 14). Economic growth is only acceptable and to be encouraged if it is consistent with low inflation. If the level

‘New Labour’ – Extending Market Labour 47

of growth is likely to increase inflation, it must be slowed. That will impact upon the level and nature of existing employment.1 Through the maintenance of a low and stable rate of inflation ‘new Labour’ argues it can deliver a stability of economic growth that has not been seen in Britain in the post-World War Two period (Blair, 1998, p. 8).2 In fact, while ‘new Labour’ acknowledges it ‘cannot abolish the business cycle’, it does believe ‘it can reduce its amplitude’ (Blair, 1998, pp. 8–9). In regulation theory terms ‘new Labour’ believes it can reduce conjunctural crises of capitalism. Policies aimed at doing this included granting independence in setting interest rates to the Bank of England; the setting of ‘rules’ to guide public expenditure;3 the three-year Comprehensive Spending Review (as opposed to annual spending round); and the re-casting of public accounts ‘to bring out the importance of investment to economic growth’ (ibid., p. 8). ‘New Labour’ are clearly aware (for example, HM Treasury, 1997; Brown, 1999e) that their aim of low and stable inflation creates dilemmas when viewed alongside the other priorities that they have, especially the creation of employment opportunities for all. In the economic orthodoxies that provide the framework in which ‘new Labour’ is developing its social policies, increased employment can create inflationary pressures. The aim becomes one of increasing employment while maintaining low inflation. To do that ‘new Labour’ argues that structural unemployment has to be reduced, requiring ‘the labour market to work more effectively’ (HM Treasury, 1997, para. 2.04), or as Gordon Brown has said (1999e, p. 11), ‘new Labour’s’ ‘reforms are designed for the modern dynamic labour market’. The rest of this chapter demonstrates how ‘new Labour’s’ welfare reform programme is aimed at increasing employment within an essentially neo-liberal framework. First, we need to understand the intellectual and philosophical roots of ‘new Labour’ and their relationship to the political economy of welfare.

The ‘Third Way’ and the individualising of social exclusion So far discussion has focused on ‘new Labour’s’ acceptance of neoliberal capital accumulation as the means by which economic growth and prosperity can be delivered. However, ‘new Labour’ are also willing to talk of concepts – in particular social justice – more associated with ‘old Labour’. However, it soon becomes apparent that social justice for ‘new Labour’ is not concerned with equality of outcome, but with

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equality of opportunity (Lister, 1998). What that boils down to is the opportunity to partake in paid work in the formal economy,4 summed up in the mantra ‘work for those who can and security for those who cannot’ (Alistair Darling, in Hansard 1998a, col. 339). Our focus is upon work, and ‘new Labour’s’ aim to tackle poverty and social exclusion through work. For ‘new Labour’ social exclusion represents: a shorthand term for what can happen when people or areas suffer from a combination of linked problems such as unemployment, poor skills, low incomes, poor housing, high crime environments, bad health, poverty and family breakdown. [http://www.cabinet–office.gov.uk/seu/index/faqs.html#what is] Social exclusion has become the favoured expression of policy-makers when considering poverty and deprivation, but the concept does have a wider and more subtle theoretical application. It has been employed to identify the results of global capitalists’ ability to detach their economic decisions from the locality which has to bear the cost of their implementation (Bauman, 1998). Burchardt et al. (1999, p. 228), note how the concept ‘probably originated in France where it was used to refer primarily to those who slipped through the social insurance system; the socially excluded were those who were administratively excluded by the state’. That Durkheimian use of the concept viewed the socially excluded as living outside the norms of society. Nor were the individuals affected totally culpable. Social institutions could be assessed on the degree to which they were able to integrate people, or alternatively systematically excluded certain groups. However, in an anti-Durkheimian critique of social exclusion, Levitas (1996) seeks to demonstrate that the late twentieth-century use of the concept was fixated around exclusion from the labour market. Seemingly reflecting upon the ‘rediscovery’ of poverty, she notes how the ‘original use of the term … signalled the extent to which those without money were unable to use leisure facilities, join evening classes, participate in political activity’ (ibid., p. 18). But, in contrast, ‘new Labour’ are not concerned with detachment or social integration in that wider sense, but only with integration into the labour market because of an acceptance of neo-liberal economics. The aim is to involve as many people as possible in the formal labour market while all other forms of production and reproduction are ignored, as are the deeply entrenched social divisions of the labour market (similarly Lister, 1998). The social exclusion

‘New Labour’ – Extending Market Labour 49

agenda has come to define labour markets as the solution to, rather than a major cause of, poverty and social exclusion (cf. Peck, 1996). The current writings of the Blairite director of the London School of Economics, sociologist Anthony Giddens are highly supportive of the ‘work is the answer to everything’ thesis (Giddens, 1998a,b). Giddens argues that we need to move beyond considering equality to be primarily material in nature, and to define it as ‘inclusion’ and inequality as ‘exclusion’: Inclusion refers in its broadest sense to citizenship, to the civil and political rights and obligations that every member of society should have, not just formally, but as a reality of their lives. It also refers to opportunities and to involvement in public space. In a society where work remains central to self-esteem and standard of living, access to work is one main context of opportunity. Education is another, and would be so even if it were not so important for the employment possibilities to which it is relevant. (Giddens, 1998a, pp. 102–3) While Giddens refers to a broad notion of exclusion and argues elsewhere that inclusion ‘must stretch well beyond work [sic – meaning paid work]’ (ibid., p. 110), his ideas concerning exclusion ‘at the bottom’, almost entirely focus upon employment and the alleged benefits reaped from employment by having had a good education. Employment in the formal economy dominates ‘new Labour’s’ aim of tackling the social exclusion of working aged people; if they can – carers, the sick and disabled people – must work in the formal economy. If the socially excluded are truculent over whether they will join the free labour market, assessing ability to work is delegated to old-fashioned social administration, with our needs determined by ‘them’: experts. There is debate as to whether the core of ‘new Labour’s’ welfare reform programme is morally or economically driven. Deacon (1998) suggests the former. In many ways we are suggesting the latter. We do not, however, want to develop what may be a false dichotomy between morals and economics. It is quite possible, for example, to envisage a situation in which moral arguments about responsibilities to do paid work can have (and are deliberately employed to have) economic effects. Undoubtedly though, there is a moral discourse concerning paid work that can be traced to the intellectual influences on ‘new Labour’, though which were the important ones is not easy to determine. Lister (1997), for example, explains how, on the path to the 1997 general election, Labour

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embraced and discarded several ‘big ideas’: including stakeholding, communitarianism, and the ‘decent society’ as the basis for governance in Britain. Others argue that some of those ideas are still pertinent to ‘new Labour’. Driver and Martell (1997), for example, analyse ‘new Labour’s’ version of communitarianism, while Heron and Dwyer (1999) also show how ‘new Labour’ continue to be influenced by stakeholding, as well as communitarianism. It has also been argued (Deacon and Mann, 1997; Deacon, 1998) that ‘new Labour’ have been influenced by the ethical (or Christian) socialism of A. H. Halsey and Norman Dennis (see, for example, Blair, 1996). Indeed, Deacon (1998, p. 10) argues that ‘new Labour’s’ welfare reform strategy is ‘rooted in what may be fairly termed “Anglicanised Communitarianism”’. What unifies communitarianism and ethical socialism (Anglicanised Communitarianism) is a focus upon individual responsibility. Central to ethical socialism: is the doctrine of personal responsibility under virtually all social circumstances. People act under favourable and unfavourable conditions but remain responsible moral agents. (Halsey, 1993, p. x) In communitarianism, as the name implies, there is a focus upon community. However, in order for communities to thrive, the role of the individual is crucial, especially the responsibilities individuals are deemed to have, both towards themselves and others. As Heron and Dwyer (1999, p. 95) observe, in ‘new Labour’s’ version of communitarianism ‘responsibility towards others as well as towards oneself is paramount’. Deacon (1998, p. 9) locates the renewed interest of ‘new Labour’ in such issues as being a ‘response to the challenge of Murray, Mead, and others to take seriously the issue of personal responsibility’. The work of those commentators, associated with the American right, had to be addressed because the issues of personal responsibility and social obligation had, Deacon argues (ibid., p. 6), been squeezed out by the ‘Titmuss paradigm’: a ‘commitment to unconditional, nonjudgemental welfare’ (ibid.). In their moral framework ‘new Labour’ offers a view of society which it sees as being superior to that of neo-liberalism: ‘a good society is more than one in which everyone runs around relentlessly pursuing their own self-interest’ (Driver and Martell, 1997, p. 34). Tony Blair (1996) is very straightforward about it: I start from a simple belief that people are not separate economic actors competing in the marketplace of life. They are citizens of a

‘New Labour’ – Extending Market Labour 51

community. We are social beings, nurtured in families and communities and human only because we develop the moral power of personal responsibility for ourselves and each other. (quoted in Driver and Martell, 1997, pp. 34–5) Ironically, however, the emphasis upon the individual to work in the formal economy in order to fulfil their obligations, itself undermines ‘new Labour’s’ notion of ‘community’. It is made quite clear that the aim of ‘welfare-to-work-welfare’ is to increase the ability of economically inactive people to compete more effectively for employment. Work-welfare is about making individuals compete with each other, while stigmatising those who for one reason or another are unable or unwilling to compete. While ‘new Labour’ claim to be different from their neo-liberal predecessors, the focus upon individual responsibility and moral agency, whatever the circumstances, leaves a distinct feeling of continuity in the discursive construction of economic inactivity and the economically inactive.

‘New Labour’ and unemployment: a (lack of ) motivation discourse In the first ‘new Labour’ Cabinet, Frank Field was appointed Minister for Welfare Reform. It was widely reported that Field should ‘think the unthinkable’ when formulating his reform proposals. After several delays, Field’s ideas were finally published as a Green Paper in March 1998 (Minister for Welfare Reform, 1998). The Green Paper identifies four ages of social security. It is in the third age that ‘new Labour’s’ welfare proposals shall come to pass, leading seamlessly to the fourth age of ‘promoting opportunity and developing potential’ (ibid., p. 21). However, rather than proposing anything particularly new, most of the Green Paper was a list of what the government were doing. Field painted the rather thin gloss of ‘work makes you free’ on policy developments that had either been announced (by other ministers) or were being widely discussed (by other ministers) on Today, BBC Radio 45 at that time – for example, Gordon Brown the Chancellor on the WFTC and Harriet Harman the then Secretary of State for Social Security on the New Deals for unemployed people and lone parents. The importance of the Green Paper lay in the status it gave to working in the formal economy as the foundation upon which the ‘new Labour’ government intended ‘to rebuild welfare’ (ibid., p. 23). While

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acknowledging that the nature of work has changed over the past fifty years, the Green Paper argues that the ‘Government aims to promote work’ (ibid., p. 23). The Green Paper implies that work and the desire to work for money have become so marginal in the lives of economically inactive people that they need to be (re)introduced to its value. Those who should labour for monetary reward must re-learn the work ethic6 (see Bauman, 1998). At the heart of ‘new Labour’s’ thinking is the idea that economically inactive people are not working because the availability of means-tested out-of-work benefits leads to just one rational choice: Welfare is … pitted against self-interest in a way in which the public can only be the loser. Hard work is penalised by the loss of entitlement. Incentives reinforce welfare dependency. Honesty is punished by a loss of income. It is in this sense that means-tested welfare is the enemy within. Its rules actively undermine the whole fabric of our character. In so doing it is a cancer within the public domain helping to erode the wider moral order of society. (Field, 1996, p. 20, original italics) Field’s arguments are essentially about the choices of rational economic actors faced by the dominance of means-tested benefits, a situation explained in an earlier epoch by the Poor Law Commissioners of 1832 in just the same way: A system which aims its allurements at all the weakest parts of our nature – which offers marriage to the young, security to the anxious, ease to the lazy, and impunity to the profligate. (Checkland and Checkland, 1974, p. 135) We discuss the lineage of work-welfare at length in Chapter 6. Deacon (1998) points to a tension in ‘new Labour’ thought between, on the one hand, attempts to ‘make work pay’ through developing further means-tested benefits and, on the other hand, the influence of the ‘assumption that poverty amongst those capable of work cannot be alleviated through cash assistance without this generating unsustainable disincentives to work’ (ibid., p. 13). Field’s departure in July 1998 can be explained as the political resolution of such conflicts. Field’s strongly anti-means-testing approach clashed with that of the Prime Minister and the Chancellor of the Exchequer who saw increased means-testing as the necessary regulatory device to make the economically inactive accept their personal responsibility, and work.

‘New Labour’ – Extending Market Labour 53

Figure 3.1 Frank Field’s ‘unthinkable’ option was to reform social insurance. Instead it’s work for all, whether they can or there is any.

Other senior members of ‘new Labour’ seem to believe that economically inactive people, particularly young people, are just lazy. So, for example, David Blunkett the then Secretary of State for Education and Employment has suggested that the New Deal for young people (discussed below) removes the option of staying at home in bed (BBC Radio 4, Today, 7 May 1997). Similar arguments were made by

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Alan Howarth when ‘welfare to work minister’. He ‘assured business leaders that “life in bed on benefit” would not be an option’ in ‘new Labour’s’ ‘welfare to work-welfare’ programme (quoted in The Guardian, 20 May 1997). The discourse is clear. Economic inactivity is individualised as the result of people being unwilling to work rather than it being due to spatially located job deficits. Such a behaviourist approach implies that if unemployed people learned the attractions of the ‘benefit culture’ from lying around on welfare, they could equally well learn a harder and more valuable lesson about the benefits of paid work in the formal economy. Such a line of thinking is not simply the imposition of political dogma; it is seen as a regulatory response made urgently necessary by the long-term restructuring of capital in global and fragmented markets. Hence, the aim of welfare reform – the ‘welfare to work-welfare’ strategy – becomes one of maintaining the flexibility of the labour market. The increasingly close relationship between labour market ‘efficiency’ and social security was highlighted in the previous chapter. ‘New Labour’ clearly believes that the social security system, or what they call ‘welfare’, has more benefits to offer in its search for greater competition and flexibility in labour markets: The welfare-to-work programme makes the labour market flexible … It creates greater flexibility by breaking down the barriers that trap people in long-term unemployment. It increases the supply of labour in the economy, its quality and its employability. (Peter Mandelson, Secretary of State for Trade and Industry, in Hansard, 1998b, col. 169)

The New Deals: developing a pro-active welfare system? If everyone should work, if workless youth are ‘lazy’, it should not be surprising that the criteria for claiming out-of-work benefits are becoming increasingly tough. ‘New Labour’s’ main initiatives – the New Deals for lone parents and young people (aged 18–24) – extend the ‘stricter benefit regime’ that we outlined in the previous chapter. These developments have been constructed through a discourse suggesting that claiming benefits has become too lax, part of a ‘something-for-nothing welfare state’ (Blair writing in the Daily Mail, 10 February 1999). In contrast, ‘new Labour’s’ welfare reforms, in particular the New Deals and Working Families Tax Credit (WFTC), represent ‘a something-for-something deal for those out of work that will

‘New Labour’ – Extending Market Labour 55

change the culture of the welfare state’ (Alistair Darling, Secretary of State for Social Security, in Hansard, 1998a, col. 339). Social security payments are to become a ‘hand up not a hand out’ (Labour Party, 1996, p. 2) for those people who are ‘willing’ to work in the formal economy. The New Deals are the main mechanism to transfer out-ofwork benefit claimants into formal employment. This policy development is clearly influenced by the prescriptive and conditional communitarianism of ‘new Labour’ (Driver and Martell, 1997). The New Deal for lone parents (NDLP) In her analysis of the differential impact of welfare measures upon men and women, Bryson (1992, pp. 196–9) argues that in the USA and Australia, social security policy for lone mothers has involved a shift from ‘legitimate dependency to proletarianisation’. What she means is that in the past, policy in the USA and Australia allowed lone mothers to ‘legitimately’ remain on social security benefits to fulfil their role as mothers, whilst now, policy increasingly demands that lone mothers go to work in the formal economy. In the 1990s the experience of lone mothers in Britain was similar. The trend, as we have seen, under the Conservatives was towards ‘encouraging’ lone mothers into employment through, on the one hand, the use of stigmatising discourses of ‘underclass’ and ‘welfare dependency’ constructing lone motherhood into a social problem and, on the other hand, the policy developments of Family Credit and Childcare Disregard and Parent Plus. Those trends are continuing under ‘new Labour’. Despite being described as an ‘historic new deal’ (DSS press release 97/125), the approach of the ‘new Labour’ government to lone mothers is an extension of that developed by the previous Conservative administrations. While it may be argued that ‘new Labour’ are not as overtly critical of lone mothers as the Conservatives, there can be little doubt that ‘new Labour’ see lone motherhood as being a threat to social stability and not something that should be ‘encouraged’ through tax/benefit mechanisms (see Chapter 4). Developments in ‘benefit’ policy are in a similar (albeit more generous) direction. The in-work benefits FC and CD were replaced in October 1999 by WFTC and Childcare Tax Credit (CTC) as important work incentive measures; that is, wage market-sensitive (for example see DSS press releases 97/099; 97/214; Minister for Women Press release 97/215; Harman, 1997a, p. 4). On the out-of-work benefit side, through the NDLP, all lone mothers with school-aged children are invited ‘into the Job Centre for help and advice on jobs, training and childcare’; that is,

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behaviour modification (DSS press release 97/099; also DSS press release 97/105). Initially, this part of the NDLP was ‘voluntary’ in the sense that lone mothers are not compelled under the threat of benefit sanctions to attend the interviews to which they are invited. However, in the 1998 Queen’s Speech it was announced that the government would be introducing ‘a single gateway to the benefit system for those of working age’ (Hansard, 1998c, col. 5). The Single Work Focused Gateway (SWFG), or ‘One’ as it has become rather portentously known, means that all7 working age claimants when first claiming benefits will have to attend an interview ‘where everyone gets the advice they need and where the option of taking benefit and going home is no longer there’ (Alistair Darling, then Secretary of State for Social Security in the Independent, 10 February 1999). The aim of the Gateway interview is ‘to keep [people] in touch with the job market’ (Tony Blair writing in the Daily Mail, 10 February 1999). If claimants do not attend their SWFG interview they face benefit penalties:8 ‘It’s tough, but the right thing to do’ (ibid.). The development of the SWFG was closely related to the early failure of the NDLP to recruit lone mothers into the labour market. Ministers believed that the voluntary nature of the NDLP was the main reason for the poor participation rate by lone mothers. By end of March 1998 25 000 lone parents had been invited to a New Deal interview in pilot areas. Of those only 5000 (20 per cent) had attended the interview (Education and Employment Committee, 1998a, para. 34). On announcing the SWFG Tony Blair made clear the need for compulsion lay with the failure of existing mechanisms to increase the closeness of the relationship between lone mothers and labour markets: We have introduced a new deal for lone parents that encourages them to look for work and spells out the opportunities available. More than 80 per cent of those who come for an interview join up for the help on offer, but far too many don’t know the options there are. That’s why we’re going to ask them to come for interview to see how they can be helped back into work. In future lone parents will have to come for an interview or risk losing their benefits. (in the Daily Mail, 10 February 1999) The introduction of the SWFG is indicative of the observed influence on British social policy-making of the USA9 (see Stepney et al., 1999). The SWFG has resonance of the work of Laurence Mead (1997). Whilst Mead acknowledges the evidence suggesting that poor people want to

‘New Labour’ – Extending Market Labour 57

work, he goes on to suggest that more ‘important than any economic factor as a cause of poverty … is what used to be called the culture of poverty’ (ibid., p. 12). Economically inactive people in Mead’s analysis are unable or unwilling because of a lack of discipline to take and hold down a job. Because of that inability to take responsibility for oneself, voluntary schemes aimed at getting people into work are likely to prove ineffective. What economically inactive people require to make them work is compulsion: they ‘appear to need a “push” from the public authority to realise their own desires to work’ (ibid., p. 32). It has been observed that Mead sees ‘the long-term workless poor [as] “dutiful but defeated”. They want to work but lack the competence to do so on a regular basis’ (Deacon, 1997a, p. xiv). Through a combination of ‘ “help and hassle”, reinforced by sanctions for those who do not co-operate’ (ibid.) the competence to work on a regular basis can be instilled into jobless people. Mead highlights Wisconsin as being an important example of the potential of work-compulsion to reduce welfare rolls. Between 1987 and 1997 the caseload of Wisconsin fell by a half, due to its ‘favourable economy, which generated many jobs, and its demanding work programmes’ (Mead, 1997, p. 29). British social policy-makers and commentators have studied Wisconsin in detail – a place where welfare benefits are time-limited. However, it has also been realised in Wisconsin that for claimants to gain and keep employment they need support. Hence, the costs ‘of supporting people in work including subsidies for child care, transport and health care have risen’ (Social Security Committee, 1998b, para. 8). What is clear from the Wisconsin example is that people (mainly lone mothers) who have not been active in the formal economy, often for long periods of time, first require a high level of support to enter and keep employment and, second, that support is often costly (see Social Security Committee, 1998b). In Britain ‘new Labour’ have accepted those observations. The NDLP has been allocated Wind Fall10 funding of £190 million over the lifetime of the first parliament (Chancellor of the Exchequer, 1999, Table 4.1), while the government is also committed to developing a national childcare strategy (NCS) as an important way of making work increasingly accessible to lone mothers (Secretary of State for Education and Employment et al., 1998). The aim of the NCS is to increase the availability of quality, affordable childcare,11 for in ‘the past, the problem of cost and access to good-quality child care has denied many parents the opportunity to rejoin the work force’ (Dawn Primarolo, then Paymaster General, in Hansard, 1999, col. 153). The lack of a childcare

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infrastructure in Britain has restricted the supply of labour from which capital can draw, and ‘denied Britain a major pool of talent and potential’ (ibid.). Hence, to increase the supply of labour ‘childcare will no longer be seen as an afterthought or a fringe element of social policies. From now on it will be seen, as it should be, as an integral part of our economic policy’ (Gordon Brown, Hansard, 1997b, col. 309). The aim of the NDLP and the NCS is to increase the closeness of the relationship between approximately one million lone mothers who are receiving out-of-work benefits and the formal economy. There are several reasons for doing this. First, it would increase competition for employment: the closeness of the relationship between the reserve army and labour markets is held to be important, as we saw in the previous chapter, in managing inflation. Second, there is a desire to increase the number of lone mothers in work because of the social benefits for children thought to be associated with employment (see Chapter 4). The aim of the NDLP therefore is to get as many lone parents into employment as possible, no matter how lowly paid and/or heavily subsidised they are through in-work cash transfers. The aim is not to increase the skills of lone mothers, but to make them work in the formal economy (cf. Land, 1999, p. 138). Young unemployed people Tonge (1999) argues that the New Deal for unemployed people represents continuity with both the old 1970s labour market schemes and the Conservatives’ Project Work programme that was being piloted when they lost the 1997 election. That continuity can be judged from the aims of New Deal for Young People (NDYP) which offers ‘a first step onto the employment ladder’ (Chancellor of the Exchequer, Hansard, 1997b, col. 308) – that it will place unemployed people upon the meritocratic path to an industrious life. Under the New Deal 18–24-year-old claimants who have been unemployed for six months or more are given four options: to take a job with an employer who will receive a subsidy of £60 a week per person taken on;12 work with an environmental task force or voluntary agency, both of which attract a placement fee for the organisation; or an education option. A refusal to take up the offer of a placement under the ‘welfare to work-welfare’ scheme results in benefit suspensions.13 NDYP conscripts receive different payments, depending upon which of the four schemes of the programme they are on. In the first option the young person receives a ‘market wage’, whilst in the environmental

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task force and voluntary work options conscripts receive benefits plus £15 (Finn, 1997, p. 12). In the education option, conscripts receive only their benefit entitlements. Of the four options available under the NDYP, the government would prefer conscripts to use the work option, reflecting the ‘sheer scale and determination’ put into getting the ‘private sector fully involved’ (Andrew Smith MP, then Minister for Employment, Education and Employment Committee, 1997, question 82). Indeed, the government has made it clear that it has no intention of becoming the employer-of-last-resort, having to create jobs for unemployed people. As Smith told the Employment Sub-Committee (ibid., question 109): ‘We did not want, and do not want, the programme to be seen as some sort of public sector, “make work” scheme.’ Like its Conservative predecessor, ‘new Labour’ believes that only the free market is the begetter of ‘real jobs’. However, also like the Conservatives, ‘new Labour’ believes that the market is unable to create those jobs of itself by what pass for ‘natural market forces’. In contrast, ‘new Labour’ have budgeted for a £15 billion14 subsidy over the lifetime of its first parliament to help the market create those job opportunities. Indeed, there is a belief that the effect of paying wage subsidies to employers, as the NDYP does, increases the number of jobs available. So, for example, Professor Dennis Snower has argued of wage subsidies that now typify the New Deal: ‘It is clear that employment would rise because labour costs fall and when labour costs fall, employment will rise’ (Employment Committee, 1994, question 186). Professor Richard Layard15 and Professor Patrick Minford – an avid supporter of liberalised markets – have more recently debated before the Employment Sub-Committee the effects of employer subsidies. Their conclusions were similar to those of Snower: that the net effect of wage subsidies paid to employers is to increase employment levels. The reasoning behind their conclusions differ. Minford argued that the increase in jobs came directly from the downward pressure placed upon wage levels by employment subsidies (thereby allowing the employment of more people) (Education and Employment Committee, 1997, question 263). Layard took the view that the ‘displacement effect’ caused by the payment of employer subsidies increases the supply of a type of labour which is more attractive to employers. These attractive labour groups are: first, longer-term jobless people because they bring with them the wage-subsidy; and second, the more recently unemployed, displaced by New Deal participants, who are more employable anyway (ibid.). This, he goes on to argue, means there will be

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less inflationary pressures because more labour is available to employers. The result is that interest rates will not have to be increased, resulting in more demand within the economy (ibid.). In the final analysis though, Layard’s arguments are similar to Minford’s, because less inflationary pressure actually means stagnant or falling wages costs.

Managing economic growth: the New Deals and employment ‘New Labour’ has made much of its desire to guide Britain away from the ‘boom and bust’ economy of the post-World War Two period towards stable economic growth (for example, Gordon Brown interviewed in The Guardian, 7 August 1998; Blair, 1998, p. 8). For ‘new Labour’, the most important means of ensuring stable growth is through the control of inflation: a low and stable rate of inflation is the basis upon which economic growth will occur. However, ‘new Labour’ have to increase the number of jobs available if their ‘welfare to work-welfare’ plans are to be successful. Those dual aims leave ‘new Labour’ with the same dilemma that beset the Conservatives (outlined in the previous chapter). The economic orthodoxies16 in which ‘new Labour’ believe, dictate that increasing employment levels and expanding economic growth are antagonistic: low unemployment and low inflation do not go ‘hand-in-hand’ – a situation brought about because of the lower competition for employment as the number of unemployed people falls. The effect is to drive up wage levels to attract the fewer ‘right’ people there will be in the market for jobs: people with the skills and competencies required for the available employment. One important way of overcoming such inflationary pressures is to widen the pool of available labour. This would increase the number of people who are looking for employment, thereby maintaining a downward pressure upon wages and inflation. It is our belief that ‘new Labour’s’ ‘welfare to work-welfare’ strategies have been designed to play just such a crucial role in widening the pool of available labour. ‘Employability’17 is the important buzz concept here: if people are not employable they are not going to exert this disflationary force which is the thing which leads to the possibility of expansion. But, if we can increase the number of people who are employable to start with, we will have more people out there facing employers looking for work who are employable and that will lead to a disflationary force. Employers will not feel compelled to bid up

‘New Labour’ – Extending Market Labour 61

Figure 3.2 You know the reserve army of labour is employment-ready when they can get a job.

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wages in order to deal with shortages and that will enable the authorities to let demand expand safely. (Richard Layard, Education and Employment Committee, 1997, question 266) Here Layard is actually saying that the New Deal will maintain a downward pressure upon wage levels because employers will face a greater number of people who are employable. In other words, ‘employability’ is concerned with increasing the effectiveness by which economically inactive people are thought to be able to compete for employment (Chancellor of the Exchequer, 1999, para 4.15). The element in the New Deal that makes longer-term unemployed people more employable (i.e. increases the closeness of their relationship to labour markets) is the subsidy payable to employers. In earlier representations to the Employment Committee, for example, Layard argued that subsidies paid for hiring unemployed people means employers are: faced with long term unemployed people who are more attractive to them and this means that there is a greater supply of labour, there is disflationary pressure in the economy … (Employment Committee, 1994, question 170) Such comments are made primarily in relation to the New Deal for unemployed people (Andrew Smith, Education and Employment Committee, 1997, question 76). However, we have also seen that there is belief that the NDLP will also increase the ‘pool of talent and potential’ for capital. The NDLP too will place downward pressure upon wages as the reserve army swells in number. That aim of ‘new Labour’ has been made clear: The more our welfare to work reforms allow the long-term unemployed to re-enter the active labour market, the more it will be possible to reduce unemployment without increasing inflationary pressures. (Brown, 1999e, p. 12) However, increased pressure through the penalties of the New Deals is just one element in ‘new Labour’s’ welfare reform package. Like the Conservatives, ‘new Labour’ also believe that low wages are a problem and economically inactive people need to be ‘encouraged’ into employment through financial incentives (HM Treasury, 1997). It is to that element of ‘new Labour’s’ version of market workfare that we now turn.

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Tax credits and the working poor: maintaining low wages? When in opposition Labour were critical of social security benefits paid to people in low paid employment. FC, for example, was criticised as being a subsidy for ‘bad’ employers (Neil Kinnock, then leader of the Labour Party, Hansard, 1985a, col. 203; Donald Dewar, Hansard, 1994, col. 1210) and a subsidy supporting a poorly performing economy (Michael Meacher, Hansard, 1991, col. 893; Denis McShane, Hansard, 1995a, col. 888). However, by the time Labour published its analyses of the state of Britain’s economy (Labour Party, 1995) and its ideas for ‘getting welfare on track’ (Labour Party, 1996), there had been a substantial change in its ideas. A New Economic Future for Britain notes how Labour ‘propose to place the responsibility for the initial identification of potential Family Credit recipient on the Inland Revenue’ (Labour Party, 1995, p. 40). In-work benefits therefore had been accepted as crucial to any future social security plans. Indeed, in-work cash transfers – the WFTC and CTC – are the main benefit development in ‘new Labour’s’ aim of ‘modernisation and streamlining’ the social security system. The WFTC and CTC are essentially extensions of Family Credit and Childcare Disregard introduced by the Conservatives. They are premised upon the assertion that has found wider currency in the social policy community that out-of-work social security benefits contain inherent disincentives to work, helping to create a ‘benefit dependency’ by encouraging economic inactivity (Grover, forthcoming, 2002). ‘New Labour’ clearly had plans to introduce a tax credit for the working poor from the very early days of their government.18 However, they also put in place a fundamental review of the tax and benefit system soon after being elected. ‘New Labour’ installed as gubernator of its review of taxation and benefits a particularly successful capitalist – Martin Taylor then of Barclays Bank (see Grover and Stewart, 1997). In announcing the review, the Chancellor argued that its remit was to investigate: the Government’s pledge to streamline and modernise the [tax/benefit] system to fulfil the objectives of promoting work incentives, reducing poverty and welfare dependency, and strengthening community and family life. (Gordon Brown, quoted in The Times, 20 May 1997) Given the absence of ‘poverty’ from the lexicon of Conservative social security policy for nigh on twenty years, its re-emergence in

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‘new Labour’ vocabulary was welcome. However, as the review developed, the notion of addressing the issue of poverty was subsumed by a concern with work incentives. As Nicholas Macpherson – Head of Work Incentive Policy at the Treasury (and a member of the Taylor review team) – told the Social Security Committee (1998a, question 5): The Taylor Group has been charged with looking at modernising and streamlining the tax and benefit system with a particular focus on work incentives. This reflects the Government’s firm agenda in this area. Inevitably the work has focused on specific areas designed to encourage people to get into work. Similarly Martin Taylor told the Committee (Social Security Committee,1998a, question 287): what we have focused on is work incentives which I agreed with the Chancellor was a crucial part of the Welfare-to-Work process. Work incentives – that is, incentives not just for individuals to take work but for employers to give work, to make work available – those are things we have been focusing on. In neither of these quotations is any mention made of tackling poverty, though the excerpts reasonably reflect their view that the nature and level of social security payments can determine the behaviour of individuals. Indeed, it has been observed that the WFTC is based upon the Chancellor of the Exchequer’s belief ‘that welfare [can] shape character’ (The Observer, 22 March 1998). Similar ideas were expressed by Martin Taylor: what we have to do here is to change people’s behaviour … We need to change people’s attitude to living on welfare. Associating the benefit they receive with the work they do seems to me to be an altogether helpful thing. (Social Security Committee, 1998a, question 303; also Taylor, 1998) Reflecting such sentiments the WFTC is to be paid through the pay packet ‘in order to reinforce the link between receipt of the credit and rewards of work’ (HM Treasury, 1998, para. 2.15). The desire to maintain labour discipline means that an important principle of the postwar settlement on social policy will be breached. It can be argued, as we do in Chapter 7, that there is a conceptual link between in-work benefits and family allowances. Eleanor Rathbone and her campaign for family

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allowances influenced Beveridge’s thinking about how a benefit intended to reduce child poverty should be paid: to the principal child carer. In other countries the equivalent benefit has been paid via the wage packet, demonstrating the clear link between low wages and child poverty, as we discuss. The in-work benefits are not said to be primarily about reducing child poverty (as we are arguing here), but they should have that effect. There may therefore be a case for paying directly to the child carer, as the household only receives in-work benefit when there are children present. But in the administrative implementation of the WFTC the government has rejected the mode of payment to the principal child carer.19 Whilst WFTC is partly justified in terms of helping poor children in low income families, it is not to be paid through the ‘purse’ to the primary carers of children. In contrast, it is to be paid through the ‘pay-packet’ to the main wage earner in any family. Evidence (see Goode et al., 1998, for example) suggests that there is often an inequitable distribution of resources between adults in the same households, with many women stating that their husbands or partners keep the money for themselves. Indeed, it has been estimated that the WFTC means up to 300 000 ‘women will have to negotiate with their partners to get back the £900 million20 that they currently receive’ (Steven Webb MP, in Hansard, 1999, col. 169). This enforcement of labour discipline therefore involves the strengthening of patriarchal dependence.21 So far in this section we have argued that the WFTC is concerned with maintaining labour discipline, but in managing economic dilemmas the WFTC is more than just a disciplinary device. One of the debates concerning WFTC in the months before its implementation was the likely effects on wage levels. When in opposition we have seen that Labour were keen to argue that FC was a subsidy to poor employers, paying low wages. Such arguments have now been turned upon ‘new Labour’ by the Conservative opposition.22 Moreover, Martin Taylor (1998, para. 3.28) has acknowledged that because employers will be an important part of the WFTC system, ‘they would be in a position to use the information to depress wages’. The National Minimum Wage (NMW) is seen as the guardian against such practices (cf. Martin Taylor, Social Security Committee, 1998a, question 321), because the statutorily defined minimum is enforced through a penalty of £7.20 per day per employee who is under-paid (Department of Trade and Industry, 1999, p. 109). Our argument is that while the NMW may be important as a floor below which wages should not fall, the aim of the WFTC is still to place a general downward pressure upon wage levels as employers

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come to recognise that they are under little pressure to increase wages above the minimum for certain entry level jobs. Such arguments will take on a greater significance when ‘new Labour’ fulfil their ambition to introduce an Employment Tax Credit (Brown, 1999d; The Times, 7 September 1999). Like FC, the WFTC and CTC will theoretically also have the effect of widening the pool of labour, for it too reduces the ‘reservation’ wage at which individuals should be willing to work because they will understand that their net income will be higher than that which they could expect from a simple unsubsidised wage. In that sense the WFTC is another element in the project to manage the dilemmas occurring when the government attempt to reconcile stable economic growth with increasing employment participation.

The national minimum wage: increasing low wages? ‘New Labour’s’ achievement of introducing a NMW has been described as being an ‘historic victory for the low paid’ (Rodney Bickerstaffe leader of the trade union UNISON, quoted in The Guardian, 29 March 1999). The historical significance of the NMW cannot be denied. In the previous chapter we saw that the Conservatives rejected the idea of a NMW as being inconsistent with job creation in a free market.23 For ‘new Labour’ there are several justifications for a NMW. First, it is seen as ‘fair’: part of a decent society. As Tony Blair explained: ‘A minimum wage is essential as a matter of common decency’ (quoted in The Guardian, 29 January 1998). Second, there is an economic argument for a NMW, particularly in the regeneration of local ‘communities’. Before the 1997 election Ian McCartney (then ‘new Labour’s’ chief spokesperson on employment), outlined the argument to us: There is an overwhelming economic argument … for minimum wages … A minimum wage [is] … part and parcel of regeneration policies. The overwhelming majority of low paid workers spend their disposable income … in the local economy. They do not spend it in the wider regional economy. And it is that spending power in the local economy which helps the regeneration because it is mainly with small and medium sized businesses. Now, if small and medium sized businesses are to be established and prosper in local communities, then they can only do so if there is … income, and if you have got structural unemployment alongside low pay then the economic base of a community is such that it cannot regenerate itself.24

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McCartney is clearly suggesting that a NMW, far from destroying jobs, should help at least to maintain employment levels, if not increase them. Such was ‘new Labour’s’ ‘official line’: a NMW would not harm employment opportunities. However, while those two justifications – common decency and economic growth – were used by ‘new Labour’, we shall see that similar arguments to those used by the Conservatives eventually triumphed in determining the level of the NMW. To examine at what level, and how, the NMW should be introduced, ‘new Labour’ set up a Low Pay Commission (LPC) under the guidance of Professor George Bain of the London Business School. The LPC consisted of the usual suspects: representatives of capital (CBI) and labour (TUC) and a number of ‘independent specialists’. It recommended a NMW of £3.60 per hour for all employees, except for 18–20 year olds for whom it recommended a figure of £3.20 an hour. £3.60 per hour was apparently arrived at through splitting the difference between the demands of capital and labour. On the one hand, the CBI had demanded that the minimum wage should not exceed £3.20 per hour, a figure they arrived at by uprating the level of wages that the Wages Councils enforced just prior to their abolition in 1993. On the other hand, the TUC were demanding in excess of £4.00 per hour. The negotiated figure of £3.60 lay about half way between these two poles (The Observer, 31 May 1998). The government courted controversy. Whilst accepting the commission’s recommendations for workers over 20, it reduced the hourly rate for younger workers to £3.00 per hour and extended its coverage to 21-year-olds. Indeed, given that in opposition ‘new Labour’ had argued for a minimum wage of two-thirds the male average (which would have given a figure of £293 per week in 1997 [Employment Department, 1998, from table E11]), the NMW of only £3.60 per hour (£144 for a 40-hour week) and the reduction for younger workers needs some explaining. As we have noted ‘new Labour’s’ ‘official line’ was that a NMW would actually increase employment opportunities, but senior members of the party were clearly not convinced by such arguments. In a widely reported ‘gaffe’ just before the general election of 1997, John Prescott MP (the deputy Labour Party leader) was reported to have said that a minimum wage would cause unemployment in the short term (The Guardian, 14 April 1997). Once in government ‘new Labour’ became concerned about the possible detrimental effects that NMW could have on employment. As Margaret Beckett wrote in The Guardian (18 June 1998): ‘Set sensibly, it [the NMW] will not damage employment prospects but help create a better-rewarded and more committed workforce’ (emphasis added). However, the most important indication that

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the government believed NMW might undermine economic growth and increase unemployment was its reduction in the level of minimum wage for young workers and the extension of its coverage to 21-yearolds. Those changes were demanded by the Chancellor of the Exchequer (with the support of the Prime Minister) who was ‘fearful that £3.20 would jeopardise jobs and his welfare-to-work New Deal’ (The Guardian, 18 June 1998). Certainly in the case of young workers, the argument posed by the previous Conservative government – that a NMW would destroy jobs – was of primary concern in setting its level. Such concerns also shaped the decision by the government not to increase the NMW on a yearly basis. Hence, in the run-up to the first anniversary of the introduction of the NMW it was reported that: Ministers are to risk the wrath of trade unions and Labour by freezing the national minimum wage at £3.60 an hour for another year. The government is to ignore pleas for an uprating in April, the anniversary for the minimum wage’s introduction, in an attempt to avoid upsetting the business community. Ministers will argue that it is too early to assess its impact on the economy and jobs. (The Times, 6 January 2000) The Times was a little premature in its conclusions, for about a month later there was a rise in the NMW of 10 pence per hour for ‘adults’ and 20 pence per hour for younger workers. However, that decision was only taken after the Chancellor had been reassured ‘that there would be no adverse effects on employment or inflation from a small rise’ (The Guardian, 15 February 2000). The important point is that it is economic concerns that are determining the level of the NMW and not concerns regarding ‘need’, or as many would argue ‘fairness’. Indeed, the low level of the NMW was criticised by trade unions arguing that it would not achieve its aim of ensuring ‘fairness’ and were promptly told to stop ‘whinging’ by Ian McCartney MP, the Minister of State, Department of Trade and Industry (The Times, 18 June 1998). It has also been observed that the NMW is limited in its coverage. It is estimated that it will affect 600 000 fewer people than the Wages Councils did when they were abolished, and that only 9 per cent of the workforce will be affected by the NMW compared, for example, with the 23 per cent of the workforce covered in the Irish Republic by its NMW (Sachdev and Wilkinson, 1998a). The government’s reaction to such criticisms was that the NMW should not be judged on its own, but viewed as part of a wider package

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aimed at tackling the low income of the working poor. Such concerns were made clear when the Low Pay Commission informed the government of its findings. ‘Whitehall sources’ stressed ‘that the minimum wage had to be seen as part of an overall package … the [1998] Budget would make a big difference to the final take-home pay of the least well-off’ (The Guardian, 29 May 1998). However, the view that in-work subsidies are part of a ‘low pay package’ is riddled with inconsistencies. In January 1998 the NMW was presented as a means of reducing ‘benefit dependency’25 and as a way of ‘cutting the £3.4 billion a year Britain spent subsidising the wages of low-paid workers via income support’ (The Guardian, 29 January 1998). Given the important role assigned to NMW to reduce the cost of social security and ‘dependency’, it is somewhat contradictory to find that just four months later it was being presented as part of a package that would extend the numbers of people in subsidised employment. It is a nice issue as to whether workers on WFTC and CTC are or are not ‘benefit dependent’, but as we have detailed, reliable government sources trumpet that the increase in the cost of paying for such subsidies had risen from some £2.5 billion for FC to an estimated £4.5 billion for WFTC. However, if the WFTC and CTC as in-work transfers and the NMW are understood as part of a social mode of economic regulation those inconsistencies can be explained. We have seen that the NMW is important as a mechanism to protect wages falling too low. Along the same lines of argument the WFTC and CTC can be understood as mechanisms by which there is little pressure for the government to increase the NMW. Increasing the NMW will make little difference to individual working poor families as any wage increases are merely consumed by reductions in WTFC and CTC. It is only when the latter in-work transfers are increased (likely to be every year) that working poor people will benefit. The interaction of the new in-work cashtransfers and the NMW means that ‘new Labour’ can progress towards their ‘Third Way’ of meeting concerns for social justice (increasing the incomes of poor working families through WFTC and CTC) while not being too burdensome upon capital (the low NMW).

Conclusion: ‘new Labour’s’ modernisation of welfare – extending market workfare This chapter has argued that the welfare reform programme of ‘new Labour’ marks an extension of market workfare. Market workfare, as it emerged in Britain during the Thatcher and Major years, was essentially

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an attempt to increase the number of people employed in the formal economy without supplanting, or overly distorting, market mechanisms. In other words, market workfare marks an attempt to work with the market in an attempt to increase its effectiveness in employment creation. The welfare reform programme of ‘new Labour’ marks an extension of market workfare because the trends in social security policy under the Conservatives have essentially just been strengthened. The Stricter Benefit Regime through the New Deals and ‘One’ mark even more authoritarian versions of the JSA and PP, while the In-work Benefit Regime through the development of the WFTC and CTC are more generous cash transfers that build upon and extend FC and CD in order to strengthen work incentives. The aim of those policy developments continues to be the management of capital accumulation. ‘New Labour’ have accepted the free market as the means through which economic growth and employment creation can be expected. However, like their predecessors, ‘new Labour’ also recognise the fact that the unfettered market will not create the desired levels of employment nor deliver incomes high enough to ensure the financial incentives to work, because the lowest wages which an unfettered market would ideally like to pay are at or below an adequate minimum income, especially for families with children. There are discontinuities between the Conservatives and ‘new Labour’ – the National Minimum Wage and the NCS26 are just two. However, those exceptions do not detract from ‘new Labour’s’ overall position. This is that inflation must be kept in check to ensure economic stability and a major way to do that is to maintain the competitiveness of the reserve army of labour (New Deals and SWFG) and maintain downward pressure on wage levels in the context of the NMW (New Deals for unemployed people and WFTC). The process of extending market workfare has not involved a questioning of the ways in which the social security (and increasingly the tax) system might be used to overcome some of the worst aspects of capital accumulation – unemployment, ‘flexible’ employment and low wages – but has involved a process of questioning how in the context of these phenomena the commitment of economically inactive people to such labour markets can be maintained. It is instructive that while ‘new Labour’ have been willing to talk of poverty and social exclusion, there has been no attempt by government to define poverty. We live with the manufactured construct of ‘below half average income’ as some sort of definition of low income

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without knowing whether that level secures a minimum standard of living, or grossly exceeds it! Indeed, no British government has attempted to relate the social assistance paid to out-of-work people to what can be determined by social science as a minimum income on which people could live at a level which allowed them to secure what we currently consider to be the necessities of life, in a way which allows them ‘to get by’ (see Veit-Wilson, 1998). Because we do not have such a ‘minimum income standard’, which would use an objectively determined minimum standard of living as the basis for an actual administrative instrument of payment, we end up with politically determined rates of benefit and horse-trading to reach deals on other minima (such as the NMW). Following this thread, it is noticeable that one thing missing from ‘new Labour’s’ social security programme is any strategy for the income maintenance of those people who are economically inactive. All the programmes discussed in this chapter – the New Deals, WFTC and CTC and NMW – are aimed at people in paid work or are aimed at getting people into paid work. Those people who remain out of paid work continue to face life on stigmatised, means-tested social security benefits that are not adequate to meet family needs. In the next two chapters which are concerned with young unemployed males and lone mothers we analyse the reasons why attention is focused upon getting people into work – even if they technically remain ‘dependent’ upon social security benefits.

4 Role Models and Traditional Moralities: the Development of In-work Relief for Lone Mothers

We have argued that the leading in-work benefit Family Credit and its successor, Working Family Tax Credit were developed from a Conservative elite understanding of US workfare, which we defined as ‘market workfare’. In Chapters 2 and 3 we argued that market workfare is a mechanism aimed at managing some of the economic dilemmas pertinent to neo-liberal capital accumulation: high levels of economic inactivity; fears of inflationary pressures; and the maintenance of a competitive edge in globalised markets. Market workfare therefore, we suggested, was an aid to the accumulation process. The current and following chapter have a somewhat different focus. Although we maintain the argument that market workfare is an important mechanism in the regulation of capitalism, in these chapters we focus upon the ways in which FC and WFTC (this chapter) and ETU and the NDYP (Chapter 5) were, and remain, a form of social engineering intended to reproduce ‘male’ role models in lone mother-headed families and reproduce the work ethic among unemployed young men. In those senses we are suggesting that market workfare can be seen as social mode of economic regulation helping to reproduce institutions – ‘the family’ and employment – that were also seen as being crucial to the accumulation process.

Reproducing labour: household production and ‘the family’ There has been much comment and theoretical debate concerning the nature, roles and power structures of ‘the family’. The work of Parsonian functionalists in the 1950s, for example, told us that ‘the family’ had crucial functions in the socialisation of children and the stabilisation of 72

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adult personalities (Parsons, 1956). As Walby (1990, p. 62) notes, such approaches ‘are usually considered totally discredited in modern society.’ Be that as it may, functionalist arguments have recently emerged in socio-political discourses concerning ‘the family’, the socialisation of children, and the role models to which some people believe children should be exposed. In particular, we shall in this and the following chapter consider how the ‘underclass’ discourse which was influential in framing the direction of social security and labour market policy over the past decade or so, set the Conservative (and ‘new Labour’) agenda on this modern exposition of ‘the social question’. However, to understand how that capture of the debate and issues came about, one needs to discuss the contribution of feminist theory. Walby (1990, p. 62) argues that Althusser’s essentially Marxist account of ‘the family’ ‘has strong affinities with Parsonian accounts’. Althusser argued that ‘the family’ is an ideological institution that socialises children into the ways and means of the capitalist system (Walby, 1990, p. 71). He was criticised for suggesting that the work of women in the domestic sphere of ‘the family’ was an ideological rather than an economic activity (ibid., p. 64). The domestic labour debate was a reaction to that assumption (ibid., p. 71). That debate focused upon the relationships between household and capital production. The most important consequence for our purposes of the domestic labour debate was the emergence of Marxist feminist ideas that attempted to link the role of women in ‘the family’ with the reproduction of capitalism. While there is a great deal of debate concerning the theoretical legitimacy of using Marxian concepts in relation to ‘the family’ and household production, Marxist feminists have provided a framework of analysis locating the social relations of ‘the family’ within a wider programme of the reproduction of patriarchal capitalism. The focus in such analyses is upon the ways in which the work of women within ‘the family’ is said to be crucial to the biological and social reproduction of contemporary and future cohorts of labour (cf. Williams, 1989, p. 61). Those approaches are useful as they make it possible to examine the relationship between the so-called private sphere of ‘the family’ and the public sphere of economy and wider social relations. However, those approaches are also limited because they seem unable to cope with the fragmentation of ‘the family’ and changing family forms. In Marxist feminist approaches ‘the family’ is the crucial reproducer of labour. In brief, how can such an approach be developed to take account of the fact that only a quarter of households conform to ‘the family’ configuration? Second, such approaches tend to only focus upon physical

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reproduction of contemporary and future labour. That focus is arguably a reflection of the domestic labour debate that was concerned with the material reproduction of labour, thereby ignoring the wider role of families in reproducing the social relations of patriarchal capitalist relations, or as Althusser had labelled it, the ideological reproduction of social relations. In this chapter we explore the use by neo-liberal theorists of Hayek’s concept of ‘traditional morality’ and the role of ‘the family’ in transmitting norms from one generation to the next. Such theorists used Hayek to engage in a discourse about the ‘underclass’ in order to both explain and justify the control of lone mother-headed families and role models in the 1990s. It is argued that lone mothers, reliant upon out-ofwork benefits, were not demonstrating the correct roles to their children, particularly their male children. In this context, we argue that market workfare can be understood as a regulatory mechanism aimed at (re)introducing what is perceived as a male role model into lone motherheaded families. Market workfare therefore can be understood as a mechanism to help reproduce future cohorts of labour, while also maintaining and supporting the disadvantaged labour market position of women.

Hayek: free markets, ‘traditional moralities’ and ‘the family’ There is an argument in some of the literature pointing to the contradiction between support for the individualism within free markets and the nuclear family. Conservatives and more recently ‘new Labour’ are said to be guilty of this contradiction. Abbott and Wallace (1992, p. 82) identified the contradiction when they asked, in the context of free market individualism, ‘why should a self-interested individual support a lot of dependants?’ However, the view that there is an inherent contradiction between support for free-market individualism and ‘the family’ is based upon a misrepresentation of neo-liberal economics. The concern within neoliberal think-tanks, particularly the IEA, about state projects seen to be undermining ‘the family’, points to the importance of ‘the family’ in neo-liberal thought (see for example, Conway et al., 1998; Dennis, 1993; Dennis and Erdos, 1993; Morgan, 1995; Murray, 1990, 1994; Quest, 1992). If we are to understand why neo-liberals attach such importance to ‘the family’ we need to revisit the work of Freidrich Von Hayek – the intellectual inspiration of the neo-liberal counterrevolution of the 1970s. In his voluminous work, Hayek makes much comment on the cultural practices and institutions required for free

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markets to operate. The application of Hayek’s theories to concerns regarding lone motherhood (this chapter) and young unemployed men (Chapter 5) will illuminate how market workfare operates as a social mode of economic regulation. Hayek regards ‘the family’ as ‘a morally and legally based institution whose purpose is to uphold functional norms and values’ (O’Brien and Penna, 1998, p. 100). His view of ‘the family’ is closely related to his ideas on the dispersion of knowledge in the ‘spontaneous order’ (liberal society). Hayek argues that knowledge is fragmented and dispersed throughout society. Individuals have knowledge relating to their own circumstances. As groups, our knowledge is still incomplete and partial. There can be no overall general plan for everyone and all circumstances because knowledge cannot be complete and impartial. Such an analysis does raise the question of how, if knowledge is so widely dispersed, societies, economies and markets can operate, but Hayek conceptualises tacit knowledge – the ‘most important form of knowledge possessed by human beings’ (ibid., p. 83) – so that such questions are overcome. For Hayek tacit knowledge is not consciously observed. However, it is ‘concretely manifested in social and moral rules, customs and norms’ (ibid.). At that juncture the importance of ‘the family’ to market economies emerges. Hayek argues that ‘the family’ is a crucial site in the transmission of those ‘rules’ essential to the operation of markets. The rules of markets include those relating to honesty, contract, exchange, trade competition and privacy (Hayek, 1988). Those rules are learnt through tradition: through teaching and imitation (Hayek, 1983, p. 39). For Hayek (1979) tradition is crucial as it provides the basis for progress. More specifically, Hayek sees ‘progress’ as being learnt through what he calls ‘traditional moralities’. ‘The family’ is an important site of the embodiment of ‘traditional moralities’ and is crucial to their transmission. ‘Traditional moralities’ are important because they teach future generations the rules of engagement in market economies. If children are not fully socialised into understanding those rules and roles, people will revert to ‘primitive’ instincts. Primitive instincts, Hayek (1983, p. 38) suggests, are innate to humans, being a legacy from when societies were organised through small hunter-gather communities. Because primitive instincts are concerned with serving common ends through common effort (ibid.), they have been labelled by Butler (1983, p. 8) as ‘simple socialism’. If market economies are to survive, primitive instincts must be suppressed. ‘The family’ in its transmission of ‘traditional moralities’ therefore becomes understandable as a crucial

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institution to the survival of free market economies. Following on, any changes in ‘the family’ threaten a return to simple socialism, thereby undermining free-market progress. In that analysis the so-called contradiction between the individualism of free markets and ‘the family’ is resolved. ‘The family’ is a crucial institution in the defence of free market economies against innate intuitions towards socialism. ‘The family’ teaches individuals the rules of markets and their roles within them. That relationship in neo-liberal thought between ‘the family’ and capitalism provides the wider context for our analyses in this and the following chapter in which it is argued that market workfare also represented an attempt to regulate different aspects of ‘the family’. This chapter concentrates upon the ways in which market workfare was designed as a regulatory mechanism to provide children within the current cohort of lone mother-headed families with a role model attached to formal labour markets. Employment in the formal economy, it is suggested, is an essential ‘morality’ to be passed on to the next generation. The following chapter takes a longer-term perspective by explaining how market workfare was developed as a mechanism through which it was hoped young under-valued men would become more financially attractive as potential husbands to young women otherwise seduced into never-married lone motherhood. The more immediate context of these chapters is provided by ‘underclass’ discourse that framed the policy agenda from the early 1990s through a limited but highly influential number of publications from the IEA.

The ‘underclass’ arrives: what to do about lone mothers? It is important to remember that the poor have always been marginalised and stigmatised. It is also true that the range of images, fears and pre-occupations generated about the poor – by politicians, government officials or the media – has moved over the past 100 years and more within a narrow range of circles that depict the poor as work-shy and promiscuous, as lacking in independence and verging on criminality. (Novak, 1997, p. 220) Novak goes on to argue that the degree of assault on poor people is temporally located, dependent upon a number of issues including the state of the economy and the numbers of people defined as being in poverty (ibid.). The 1990s represented a period when there was a

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particularly vicious assault on poor people to ensure their compliance with the new economic order (Chapters 2 and 3). That assault was framed by ‘underclass’ discourse. It was Charles Murray, a researcher at the neo-liberal American Enterprise Institute who popularised ‘underclass’ discourse in 1990s Britain. Following his work on ‘underclass’ in the USA, Murray, at the invitation of the Sunday Times (1989), declared Britain was witnessing the emergence of an ‘underclass’ in which: a growing population of working-aged, healthy people who live in a different world from other Britons … are raising their children to live in it, and whose values are now contaminating the life of entire neighbourhoods. (Murray, 1990, pp. 3 and 4) On returning to Britain in 1993 Murray argued that the underclass ‘crisis’ was deepening (Murray, 1994; Lister, 1996, pp. 99–135). Murray’s concern was with two groups of people: lone mothers and young unemployed men. Murray’s analysis was essentially utilitarian. The postwar ‘welfare state’ was held by Murray (and other ‘underclass’ advocates) to be seducing rational economic women into lone motherhood, and rational economic men into unemployment. The ‘welfare state’ was undermining the institutions of ‘the family’ and employment. From a rather unclear social causality Murray is led to view lone mothers and unemployed men as culturally different from the rest of the ‘normal’ population, who it is assumed are committed to ‘the family’ and employment. Murray’s portrait of the lives of poor people living in inner city areas was supported by other IEA published accounts which also individualised the causes of poverty and other aspects of life – in particular crime and lone motherhood (for example, Dennis, 1993; Dennis and Erdos, 1993; Morgan, 1995). Academic debate raged over whether the notion of ‘underclass’ was in any way useful to the study of social policy. Some argued that the concept should be avoided because it was imprecise and value-laden (Lister, 1990), tainted ‘by its use as a tool of political rhetoric’ (Morris, 1993, p. 411). Others suggested that while the concept was seriously flawed, it did highlight important social divisions that needed to be acknowledged and addressed by policy commentators and makers (Dean, 1991; Dean and Taylor-Gooby, 1992), though it was disputed by, for example, Silburn (1992) arguing that the concept of the ‘underclass’ would prove useless to policy-makers, rather in the manner he

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had dismissed in-work benefits the year they were introduced (Coates and Silburn, 1970, p. 230). Our belief, however, is that the notion of ‘underclass’ has proved to be extremely influential in terms of social security and employment policy-making. While policy-makers have rejected many of the rather extreme policy prescriptions of ‘underclass’ advocates, the notion of ‘underclass’ has had rather more success in framing the questions policy-makers have increasingly asked of the ‘messages’ contained within the administration of social security benefits when available to certain groups of claimants. In other words, ‘underclass’ forced policymakers to consider in a neo-liberal sense what forms of socio-economic behaviour were being rewarded and punished through the monetary relief of certain forms of need1 (cf. Willetts, 1992, p. 146; 1994, pp. 42–3; Lilley, 1995, pp. 19–20; Labour Party, 1996; Harman, 1997a; Minister for Welfare Reform, 1998). Given that the notion of ‘underclass’ is inherently conservative, its influence has had important implications for the direction of social policy – a backlash against changes in family life and wider social change since the 1960s (cf. Abbott and Wallace, 1989; Weeks, 1991). For Conservatives those concerns crystallised over the increasing numbers of lone mother-headed families (which is basically what family break-down means to Conservatives). Millar (1994a, p. 1), for example, quotes a Cabinet Briefing Paper leaked to The Guardian in 1993 that stated: We have assumed that the primary objective of any measures taken will be to reduce the burden on public expenditure caused by loneparent families, and that measures should be therefore directed towards discouraging lone parenthood and other ways of reducing expenditure which do not harm interests of the children of lone parents. (emphasis added) Clearly lone mothers were being problematised as a burden upon public expenditure. Given the fact that around this time high-profile members of the Conservatives were linking lone motherhood to criminalised social issues such as juvenile delinquency, it can be assumed that the financial ‘burden’ of lone mothers went beyond just the cost of benefits paid to them. While the expenditure-saving argument for FC (discussed below) is actually not that powerful, it needs to be understood that even if the aim were to reduce expenditure there were limited ways of doing so if

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the ‘interests of children of lone parents’ were not to be greatly harmed. One strategy, of course, would be to prevent women from becoming lone mothers in the first place. That would require mechanisms to prevent unmarried women from having (or keeping) children, and preventing couples with children from separating and divorcing. The former scenario is discussed in the next chapter. Even if such mechanisms were designed and implemented, what could be done to reduce the cost of the present cohort of divorced, separated and nevermarried lone mothers? To a large extent reducing the cost of the current cohort would depend on the way in which, and by whom, the ‘interests’ of children are defined. Any child has a diverse set of socio-economic interests, but the power of the body defining them is crucial. So, for instance, the interests defined by children themselves may well differ to those defined by their parents or educators. However, given the somewhat contradictory way in which childhood is constructed as both a period of passiveness and acquiescence, and a potential threat to the established order, the predominant view is that adults (in particular agents of the state) know what is best for children. These adults have the best idea of the images and role models to which they should be exposed. The paternal cocoon becomes a potential site of struggle over the control of the academic and socio-economic ‘education’ of children. But how are such arguments linked to social security benefits payable to lone mothers? The answer to such a question is related to a range of issues concerning the relative importance of the economic and social interests of children as defined by the state. In the 1980s there was concern with the financial interests of the children of lone parents. The Lone Parent Premium of Income Support and One Parent Benefit introduced as a result of the Social Security Act 1986 were some recognition of the extra costs of lone motherhood.2 The most straightforward way of reducing expenditure on lone mothers – the withdrawal or severe reduction of benefit – was not really an option unless, as the CSA attempted (somewhat unsuccessfully) to do, the withdrawn benefits were replaced by maintenance payments from absent fathers. More importantly, however, the withdrawal of benefits payable to lone mothers could not guarantee that their children would grow into responsible citizens, employed in the formal economy. As Offe (1984) explains, there are many possible strategies – for example begging and crime – for survival in modern society that do not involve employment in the formal economy. The active proletarianisation of labour through social

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policies involves ensuring that people have little option but to work and, following on, their children also learn that work is the means of subsistence. The search was on for a mechanism that could manage the range of issues concerning the cost of benefits paid to lone mothers and the role models to which their children should be exposed. Such a mechanism was likely to be riddled with tensions and inconsistencies. On the one hand, it could potentially have had the effect of eroding the interests of children (given the concern with ‘latch-key kids’ there are child-care and protection issues here too) by taking their mother away from caring for them, for example, before and after school. On the other hand, such a measure could increase the income of lone mother-headed families and benefit (particularly male) children by demonstrating to them that employment is an important part of adult life. FC was designed to manage those tensions.

Lone mothers and formal employment: role models and the re-regulation of public patriarchy The feminist debate we introduced above needs further exposition to expose the links between ‘underclass’ and the overhaul of social security which delivered in-work benefits as the vehicle for the conservative moral regeneration of ‘the family’. Mann and Roseneil (1994, pp. 327–8) claim ‘underclass’ discourse was part of a ‘backlash’ against feminism. They highlight (Roseneil and Mann, 1996, pp. 205–7) four factors in that backlash: ‘a (re-) promotion of the heterosexual nuclear family’; a focus upon lone mothers as being the ‘problem’ in contrast to focusing upon the poverty that they and their children live in; a ‘one-gender fixation’ upon the alleged effects of lone motherhood on young males only; and an underpinning of essentialist notions of masculinity and femininity. Following Smart (1989), Mann and Roseneil suggest the backlash against feminism was an important part of a wider project of patriarchal restructuring. However, while Smart writes of ‘patriarchal restructuring’, she is in fact referring to the reconstruction of what Walby (1990) refers to as ‘private patriarchy’. Walby (ibid., p. 24), however, suggests that in the twentieth century there has been a shift from ‘private patriarchy’, where the main site of women’s oppression is family production, to ‘public patriarchy’ where the main sites of women’s oppression include employment and the state. The distinction that Walby makes between public and private patriarchy helps to make sense of the reasons for the introduction of market

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workfare by the Conservatives and its development by ‘new Labour’. Indeed, such distinctions allow us to distinguish the differing ways it was hoped market workfare would impact upon familial relations and forms, and the relationship of those forms to patriarchal capitalist society. In brief, it is argued in the following chapter that the aim of the ETU was a reconstruction of the ‘private patriarchy’ of the nuclear family, for, as Smart (1989, p. 17) notes, the aim of the Conservative government was ‘to restore the paterfamilias to his rightful place in the nuclear family’. Meanwhile, this chapter focuses upon the shorter-term policy aim of enforcing upon the current cohort of lone mothers a renegotiated ‘public patriarchy’ with an increased emphasis on participation in the labour market. The ‘underclass’ debate provided the dubious philosophical justification for this restructuring. In the early 1990s a number of Tory ministers launched underclassinspired attacks on lone mothers (for example, Lilley, 1992; Redwood, 1993). At the 1993 Conservative Party Conference Michael Howard linked the rise in lone motherhood to rising crime rates (Lister, 1994, p. 5). John Major’s much-vaunted ‘back to basics’ campaign in 1993 was also widely seen as an attack on lone motherhood. The focus upon lone mothers had been influenced by the discourse of ‘underclass’ theorists. Charles Murray had several high-level meetings with Conservative officials, ministers and civil servants. Those central to modern Conservative thought were also informed by the work of ‘underclass’ proponents. David Willetts MP (1992, p. 149; 1993, p. 10), for example, refers to the work of Murray, while Peter Lilley MP when Secretary of State for Social Security, quoted the work of Dennis and Erdos on several occasions (for example, Hansard, 1993, col. 1050; Lilley, 1995, pp. 26–7). Obviously this begs the question of what it is advocates of ‘underclass’ actually say about lone motherhood. Essentially they argue that it is just not possible for lone mothers to provide boys and young men with the role models they require to find their own place and role in society: Little boys don’t naturally grow up to be responsible fathers and husbands. They don’t naturally grow up knowing to get up every morning at the same time and go to work. They don’t naturally grow up thinking that work is not just a way to make money, but a way to hold one’s head high in the world. And most emphatically of all, little boys do not reach adolescence naturally wanting to refrain from sex, just as little girls don’t become adolescents naturally wanting to refrain from having babies. In all these ways and many more,

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boys and girls grow into responsible parents and neighbours and workers because they are imitating the adults around them. (Murray, 1990, pp. 10–11) According to Murray lone mother-headed families are problematic for young males because they cannot furnish them with the ‘masculine’ role models of employment required for success in adult life. Murray’s arguments may well have resonances of discredited Parsonian functionalism, but they also have strong roots in criminological social control theory which is far from dead as an acceptable explanation of the role of ‘the family’ in society. In functionalist terms lone mothers are just inadequate at socialising their male children to meet the challenges they are likely to face as adults. Lone mothers cannot show their boys that they must work in the formal economy. The important point is, of course, while sociologists may reject functionalism on theoretical grounds, policy-makers need justifications which ‘underclass’ advocates can provide. Murray, however, is not alone in his reasoning. To show how the easy certainties of ‘underclass’ are no respecter of political commitment, the ethical socialist A. H. Halsey has expressed similar sentiments: The very, very important ingredient of a role model of a working man, a person who goes to work and comes back and does all sorts of DIY and is a responsible adult person is missing [in lone motherheaded households]. (quoted in Mann and Roseneil, 1994, p. 323) Halsey has taken the argument wider. Not only are boys unable to learn the ‘masculine’ activities of employment and putting up shelves in lone-mother families, they are starved of any ‘responsible adult person’. Halsey seems to be suggesting that lone mothers de facto cannot be responsible because they are on their own. It was also claimed that lone mothers were breeding a generation of males who would reject marriage and reject responsibility for their own children when they had them. So, for example, by 1994 Murray, whose emphasis had shifted to focus almost entirely on lone motherhood, was arguing: The real problem with the ‘alternative’ of unmarried parenthood is that it offers no ethical alternative for socialising little boys. For males, the ethical code of the two-parent family is the only game in

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town … try to imagine the code of ethics that the unmarried mother can teach to her male children that excludes marriage. She can try to teach him to be honest, not to assault other people, to be selfreliant. But what shall she teach him about his responsibility toward his own children? What can she teach him about his responsibility to the mother of his children? (Murray, 1994, p. 26) Murray is clear in his belief that lone mothers cannot pass on ‘traditional’ role models – those of labour market attachment and responsibility in marriage – to their male children. Murray saw lone mothers as responsible for reproducing a generation of males who would reject marriage and employment in the formal economy, leading to them being frozen in an adolescent state characterised as barbarism, not properly socialised in the ways of market economies (discussed by us in Chapter 5). Hence, such families are seen as threatening the social and economic order. Hayekian ‘traditional moralities’, that for neo-liberals are central to the operation of market economies, are not being and cannot be taught to or imitated by relatively large sections of the adolescent population. Such arguments had profound implications for social policy development. Within its neo-liberal constraints, the Conservative government believed they had to develop mechanisms in which lone mothers could be ‘encouraged’ to demonstrate what were seen as the masculine role of employment in the formal economy. ‘New Labour’ have also pursued these goals with even more gusto.

Re-regulating public patriarchy (I): lone mothers, role models and the Conservatives The centrality of ‘the family’ to socio-political discourses since 1979 has led to the suggestion that one of the aims of the Conservatives was to re-establish private patriarchy (cf. Smart, 1987, 1989; Abbott and Wallace, 1989, 1992; Somerville, 1992; Lister, 1994; Mann and Roseneil, 1994; Roseneil and Mann, 1996). And although that was the case, as we show (Chapter 5), to focus upon attempts to re-establish private patriarchy alone would be to miss the subtleties of the Conservatives’ project through the 1980s and 1990s – and ‘new Labour’s’ since 1997. Those policy instruments of market workfare relating mainly to lone mothers – FC, CD, PP, WFTC, CTC and NDLP – were aimed at reconstructing or re-regulating public patriarchy.

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The Conservative government correctly identified the fact that they could not make people in problematic marriages remain together. Peter Lilley when Secretary of State for Social Security argued, for instance: The growth of family disruption is deeply disturbing to any government. But it is a profound mistake to suppose that government has the power to restore all families to harmony. The role of the state is far less significant than most commentators assume either as cause or cure of the family’s woes. Families were not invented by governments nor created by the state. They are God-given – the consequence of human nature; the natural desire of men and women to find a mate to love; the instinctive love of parents for their children; the helpless dependence of children on their parents. And the fate of any family depends on the behaviour of those who comprise it. The idea that government could impose family values by edict or exhortation is impractical and authoritarian. (Lilley, 1995, p. 24) With little control over separation and divorce, but a concern with the role models that (particularly male) children are exposed to in lone mother-headed families, the Conservatives searched for a mechanism that could manage those issues. They found it in market workfare. In contrast to the receipt of out-of-work benefits, the aim of market workfare was to entice lone mothers away from reliance upon out-of-work benefits to increasing involvement within the formal labour market. Public patriarchy was to be re-asserted through increased dependency upon market mechanisms. Whether lone mothers who receive social security benefits should be required to work has been a question that has perplexed policy-makers for many years (Brown, 1988). From the Finer Report of 1974 onwards, it has been claimed that the approach has been one of neutrality, such that lone parents should have the choice either to receive means-tested benefits or to work (ibid., p. 114). Interestingly, that notion of ‘choice’, as we have seen, still remains a strong element in the presentation of workwelfare policies aimed at lone mothers. ‘Choice’ is, however, increasingly filtered through an administration which compels and a discourse which seeks to stigmatise lone mothers. Indeed, social security policy now emphasises employment for lone mothers rather than ‘dependency’ on out-of-work benefits. Civil servant A, for example, told us how: when you come to divorced women, there is a slightly more ambivalent attitude … I certainly think people do not think that

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young women of 25 should be kept for the rest of their lives; that she ought to go out to work, particularly when her children are a bit older … it is expected now that she should do some work … that will be … the next bit they [the government] will be tackling once JSA is … working for the unemployed. Why this change in attitude should occur is an important issue to solve. On the one hand, there is a suggestion that the change has been purely financially driven which is clearly implicit in Secretary of State for Social Security Peter Lilley’s (1995, p. 46) argument that the ‘key to reducing the £8 billion we spend on lone parents is not to penalise mothers. Rather it is to help them back into work.’ More recently, ‘new Labour’ have made it clear that their whole welfare reform programme is aimed at reducing expenditure on what they see as the costs of economic inefficiency (economic inactivity) in order to fund more generously the deserving causes of education and health. As they developed, in-work benefits have provided ever more generous benefits, disregards and tapers. There is now some doubt as to whether transferring lone mothers from out-of-work to work-welfare benefits will save expenditure over the long term. In the context of those officially defined as ‘unemployed’ civil servant E made the point: there are savings from in-work benefits as opposed to out-of-work benefits, the problem with that is that your out-of-work benefits only last for the duration of your unemployment period … the average length of unemployment is quite low actually. So, week in week, I mean, if you assumed someone was going to stay out of work until they were 65 then, yes, you are saving money by giving people inwork benefit. The problem is, by putting someone in in-work benefit they are there forever, or they are there for as long as they choose to stay low waged. So, you cannot just do a week in, week out thing. You have got to look at the overall benefit spend, and the overall spend on something like Family Credit is greater than the benefit spend would have been if they had been on Income Support and out of work forever which is unlikely, which would go against the stats. Critics of in-work benefits make similar arguments to those levelled against lone mothers in general. Morgan (1995, p. 10; also in Social Security Committee, 1995, pp. 145–60) argues that in-work benefits are ‘now largely understood, and developed as [being] services for a lone parent clientele’; and hence on her account, discriminating against

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two-parent families (Social Security Committee, 1995, question 84). According to Morgan (1995) in-work benefits targeted at getting lone mothers into work through a whole child-care package, encourage lone motherhood itself and in turn create a ‘marriage trap’. If marriage results in benefit loss, rational female actors will not choose it, with the further entailment that mothers already in long-term stable relationships will choose to leave for the bounty of life on in-work benefits. Morgan’s ‘marriage trap’ acts to encourage further ‘family breakdown’ and never-married lone motherhood. As the parent of custody is the one who will get the benefits, there must, presumably, be the further pressure to seize the children for economic benefit advantage. The logical extension of this argument is that in-work benefits are unlikely to save money because in the long term they will merely encourage more lone-mother families to be dependent upon the state for at least part of their income. Confusion over the work-welfare benefits as an expenditure-saving mechanism becomes much clearer if we take an alternative interpretation. Rather than a money-saving device, we believe that work-welfare benefits have been developed as a mechanism to introduce a role model of adult working in the formal economy. The development of market workfare highlights elements in ‘family policy’ that Rodger (1995, p. 6) notes as containing ‘correctional as well as an emancipatory stress’, for while work-welfare developments of market workfare were presented as being concerned with raising the incomes of the working poor, it is our contention they were actually an attempt to address a perceived ‘crisis of role models’ in lone-mother families. The aim of market workfare so far as lone-mother families are concerned is to (re)introduce a role model attached to the labour market into their households. The importance of that role model cannot be stressed enough. We have seen in neo-liberal economic analyses how ‘the family’ is a crucial institutional site for the introduction of tradition and culture in order that free markets can operate. Important politicians in the Conservative Party were quite obviously influenced by such thinking. Peter Lilley MP, for example, argued how: The family is of crucial social significance because it is the fundamental building block of society. It is the main channel through which culture, language, religion and values are transmitted from one generation to the next. It equips each new generation for living in society. (Lilley, 1995, p. 23)

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And David Willetts, then Conservative MP for Havant argued: The fundamental reason why the family matters is that it is the vehicle for the transmission of values and civilities which make it possible for us to get along together in society. (Willetts, 1993, p. 17) The value ‘the family’ is to transmit to young men is that of a commitment to employment in the formal economy. The importance of employment would be lost in families without role models that encourage such attachment to labour markets and the ‘underclass’ would be reproduced in the next generation. In a lone-mother family, of course, only the mother can work and she also has responsibility for all child-care and domestic work. Lone mothers can only work if there is flexibility within the social security system, and the working environment, allowing their hours to fit in with their domestic and caring roles. To achieve this, there was a reduction in 1991 of the qualifying working hours for FC from 24 to 16. In parliament Tony Newton (then Secretary of State for Social Security) suggested that change in qualifying hours for FC represented a widening of: the scope of family credit for all parents, but in a way likely to be of particular importance to lone parents. We shall make it possible to claim this benefit when working only for 16 hours weekly, instead of the present 24. That should make it much easier for parents to combine work with their responsibilities for their children. (Hansard, 1990, col. 731) Clearly the aim of the hours reduction in FC was to encourage as many lone mothers as possible into what would normally be considered parttime employment of at least 16 hours a week. That, it was claimed, would be beneficial for the children of lone-mother families by (re)introducing a role model attached to the formal labour market. So, for example, the CSA White Paper (Lord Chancellor et al., 1990, para. 6.1) that proposed the drop in qualifying hours of FC, suggested: if the period of dependence on Income Support is reduced, then the children themselves are likely to gain a more positive attitude to work and independence. The theme of the inter-generational transmission of the value of labour market activity was also noted by civil servant E who told us that for

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lone mothers: the disincentive to get out of work is greater, but arguably the need for people in those families to be working and active in the labour market is greater as well, because you have a role model. Similarly, civil servant A indicated that FC for lone mothers was important because: you are doing some work for your benefit, which is doing you good and your family good, and an example to children and all that sort of thing. From those quotations by civil servants in the social security policymaking system, we can see that the development of the work-welfare benefits of market workfare reflected the neo-liberal economic concern with the transmission of the value of work to children, particularly male children in lone mother-headed families. The more immediate manifestation of those concerns was located in ‘underclass’ discourse suggesting, as we have noted, that lone mothers were raising children outside of normative cultural values. Given the acceptance of neoliberal economic analyses (Chapter 3) it should perhaps be of little surprise that ‘new Labour’s’ approach to role models and lone mother-headed families has been similar.

Re-regulating public patriarchy (II): ‘new Labour’, lone mothers and role models We saw in the previous chapter that ‘new Labour’s’ welfare reforms have been posited around employment: that ‘work is the best form of welfare’. Following trends that emerged under the Conservatives, ‘new Labour’ applied such arguments as much to lone mothers as any other ‘unemployed’ person. The New Deal for Lone Parents and Single Work Focused Gateway on the one hand, and the WFTC and CTC on the other hand, have been justified as being essential to ‘making work pay’ and obliging economically inactive people to seize upon the ‘opportunities’ that they provide. For lone mothers those developments were justified in a similar discourse – concerning lone mothers and role models – as was the case under the Conservatives. Harriet Harman, when Secretary of State for Social Security, was unceasing in her efforts to get this message across.

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Nor had there been any U-turn on this. As shadow Social Security Secretary she had argued in one of the last debates on social security before ‘new Labour’s’ election victory: The problem is not just financial, with children being brought up on the breadline and the taxpayer facing a growing benefits bill. There is a deeper problem of children being brought up without seeing the world of work, and growing up with the expectation that life is about receiving benefit rather than going out to work. (Hansard, 1997a, col. 941) And after being elected in the debate concerning the abolition of One Parent Benefit and the Income Support Lone Parent Premium3 she argued: Lone mothers say that work is about more than money, although that is important. Work for them means that they do not have to depend on benefits. They can show their children that income is about work rather than benefits … They want to work so that they can set an example to their children, and can bring them up to understand that life is about work and not just claiming benefits. (Hansard, 1997d, col. 1086; see also comments in Hansard, 1997c, col. 519 and Harman, 1997a, p. 7) The message from Harman was clear and it was the same as Lilley’s. Teaching such lessons to children is one of the most important roles assigned to families by ‘new Labour’. While ‘new Labour’ politicians would quite clearly prefer to see children living in ‘the family’ (Blair, 1996; Secretary of State for the Home Department, 1998) – because family ‘breakdown’ is believed to be part of wider social malaise – there are clearly certain messages that all family types can give their young. The value of employment is one such message and reflects the ‘moral preparation that no … institution [other than families] can bring’ (Blair, 1998, p. 13). In Chapter 3 we saw how ‘new Labour’ had adopted the discourse of ‘dependency’ in which receiving social security benefits is used to claim that the recipients are divorced from ‘mainstream’ society. ‘New Labour’ are concerned about the inter-generational transmission of what they see as a something-for-nothing culture. The development of measures for lone mothers – particularly the New Deal – were aimed at breaking that process of transmission. In giving evidence to the

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Figure 4.1 The punch-bag for an epoch. ‘Tell them life is about work and not just having children, Harriet. Harriet, where’ve you gone?’

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Education and Employment Committee (1998b, question 198, emphasis added), for example, Harman argued: We know it is a good investment anyway, because if we are helping people have opportunities and we are making sure that children are not brought up in workless households, it is part of our programme for tackling social exclusion. So it is not just a financial equation here and there are all sorts of good evidence around. The evidence is that a young girl who is brought up by a lone mother is less likely herself to become a young lone mother than a young girl who is brought up by a lone mother who is not working. You can understand why, of course, because it seems to be that life appears to be like getting yourself up and getting yourself off to work and that is the role model and example they set. So I think there is a short-term issue about returns, but then there are also the long-term issues about tackling a cycle of dependency and parents being able to be role models. Harman’s comments are interesting, because as the former ‘minister for women’ and now on the backbenches as a champion for women’s rights and achievement, her thinking on ‘social exclusion’ is a part of a Conservative configuration of historical concerns with the inter-generational reproduction of socio-economic inefficiency (see for example, Macnicol, 1987; Dean and Taylor-Gooby, 1992). So, for example, in the 1970s Sir Keith Joseph – architect of Conservative neo-liberalism – was sold on the idea of the ‘cycle of deprivation’ as the explanation for the disadvantage and deprivations of the 1960s and 1970s. In addition, John Moore (when Secretary of State for Social Services) argued in 1987 that ‘dependency’ on state benefits and services was sapping the vitality and initiative of individuals. Indeed, both the Conservatives’ and ‘new Labour’s’ approach are based upon the premise that economic inactivity is located within the rational choices that individuals make. People remain socially excluded not because of a lack of employment, but because they have not been responsible enough to seize the new opportunities presented by ‘new Labour’s’ reforms. Their economic inactivity becomes individualised as unwillingness to work: they are part of a ‘culture’ that rejects the activities of ‘normal’ society – the ‘something-for-nothing’ culture.

Role models, the double burden and public patriarchy In Chapters 2 and 3 we argued that market workfare – the development of increasingly authoritarian out-of-work benefits alongside

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increasingly generous in-work benefits – was aimed at managing some dilemmas pertinent to neo-liberal economic growth. This chapter has shown that the development of market workfare can also be understood as crucial to Conservative and ‘new Labour’ attempts to overcome an alleged inter-generational transmission of an ‘underclass’ by providing the children of lone mothers with role models working in the formal economy. In neo-liberal terms those interventions in markets were justified on the grounds that they would help ensure the transmission of traditional moralities, crucial to the survival of market economies. However, while concern about role models was an important force behind the development of market workfare, the fact that lone mothers only have to work sixteen hours a week as the main qualifying criterion for work-welfare benefits was explicitly linked to their domestic responsibilities. Lone mothers could meet their dual burden – providing the working adult role model and fulfilling the duties of a caring mum. For lone mothers work-welfare benefits can be seen as institutionalising the ‘double burden’ that many women face through having primary responsibility for the household while also working in the formal economy. Given the significance assigned to market workfare by the Conservatives and ‘new Labour’, it is an important example of what Pascall (1986, p. 26) describes as the ‘contradictory effects’ of social policies for women. Pascall argues that social policies ‘cannot be understood in a one-dimensional fashion, as instruments of oppression or liberation’ (ibid.). On the one hand, market workfare could enable lone-mother families to live independently (albeit at a low level of income) from a man. On the other hand, market workfare institutionalises both the productive role of women as low-paid employees, thereby supporting capital’s exploitation of them, and their reproductive role in the care and nurture of future generations. Whilst in-work benefits could act as a springboard to full independence for lone mothers, they are, in fact, a conservative mechanism that preserves the advantages of the ‘double burden’, reproducing rather than alleviating the disadvantaged position of women in the labour market and the household. The argument of burden is held by Conservatives to be ample proof in support of the naturalness of the division of labour which the two parent household happily achieves – he goes out to work and she looks after home and babies. There is no mention of equity in that account. In terms of women’s aspirations to achievement in the labour market, that conservative account is entirely supportive of domestic patriarchy.4

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We started from a position that questioned the relevance of Marxist feminism to debates regarding the relationships between ‘the family’ and the reproduction of labour. Through a regulation approach analysis this chapter has shown that the arguments of Marxist feminists are still very relevant: developments in social security and labour market policy over the past decade or so have attempted to manage changing forms within patriarchal capitalism in a manner that does not undermine economic growth and development. This chapter has shown how market workfare helps buttress patriarchal capitalism in at least three different ways. First, it supports and helps reproduce the low-paid employment in which women are concentrated and upon which British capitalism is premised. Second, it institutionalises the ‘double burden’ that women employed in the formal economy have to endure. In other words, market workfare reinforces the unpaid work women do in the social reproduction of future generations of labour. Third, it has been shown how the reproduction of labour goes beyond the merely physical. In neo-liberal thought ‘the family’ is crucial for the transmission of the rules and roles which individuals will need as adults in the free market: in particular children should learn their role as labour. In lone mother-headed families only the woman can teach their children that role. Ironically, lone mothers are being fashioned as the Amazon fighters for the ideological reproduction of patriarchal capitalism.

5 Taming ‘Barbarians’: Young Men, the Patriarchal Family and In-Work Relief

In the previous chapter we saw how certain aspects of market workfare were developed in the context of the importance of neo-liberal analyses of ‘the family’ to free-market economies. It was shown how in such analyses ‘the family’ is seen as a crucial institutional transmitter of traditional moralities that are held to ensure the continued prosperity of ‘the market’. That chapter focused upon the ways in which in the short term governments have attempted to ensure that children in lone motherheaded households are exposed to the specific traditional morality of a role model in paid work in the formal economy. Using Walby’s distinction we argued that a particular form of market workfare – Family Credit (replaced by the ‘new Labour’ version, WFTC) and Parent Plus (replaced by the NDLP and SWFG by ‘new Labour’) – aimed to renegotiate public patriarchy with a greater emphasis upon ‘the market’. This chapter takes a longer-term view by focusing upon the ways in which a further manifestation of market workfare, concerned primarily with young men, was aimed at re-establishing private patriarchy to stem the increase of never-married lone motherhood.

Fratriarchy: a threat to patriarchy? Recently there have been examinations of the relationship between manifestations of masculinity and social policy. Hearn (1998) and Williams (1998), for example, discuss the ways in which ‘troubled masculinities’ are often discursively constructed with reference to particular social policies areas. Hearn’s focus is upon specific policy areas, while Williams’ is more generally upon fatherhood. Such analyses are of use to us because they highlight the ways in which traditional notions of masculinity are challenged by the massive social, economic 94

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and cultural changes Britain has recently witnessed. As Williams (1998, p. 63) notes: The social, economic and cultural conditions which sustained traditional meanings of fatherhood – particularly those attached to male breadwinning, moral authority and undisputed paternity – have been subject to challenge and change, especially over the last decade. Hearn (1998, pp. 39–40) argues that masculinities of young men are ‘troubled’ in at least five different ways. Four of those ‘troubles’ relate to the ways in which individual men may experience masculinity as being troublesome: forces beyond the control of individual men, for example, technological change and rapid economic change; the internal inconsistencies and contradictions of masculinity; the fact that masculinities are not simple or coherent; and the way in which men experience their own and other’s masculinity as being ‘troubling’. The final way in which masculinity may be ‘troubling’ is related more specifically to the policy-making process: ‘the existence of these various forms of troubled masculinities [listed above] may itself be seen as “troubling”, for policy makers, political commentators and academic analysts alike’ (ibid., p. 40). It is that final aspect of ‘troubled’ masculinities which is of interest to us. It is of particular interest when related to other issues raised by Hearn, especially the reasons why he suggests young men are seen as being problematic. Hearn argues that young men are defined as troublesome because of their potential rejection of patriarchy, which he compares to fratriarchy as a better explanation of the mode of domination of young men. Fratriarchy, Remy (1990, pp. 44–5) argues: is a mode of male domination which is concerned with a quite different set of values from those of patriarchy. Although the fratrist can be expected to share all the common assumptions about matters such as the origin of life in the father, together with the whole ideology which springs from this, he is preoccupied with matters other than paternity and parenting, raising children, providing for a wife and family, and acting as guardian of a moral code. Unlike patriarchy, fratriarchy is based simply on the self-interest of the association of men itself. It reflects the demand of a group of lads to have the ‘freedom’ to do as they please, to have a good time. Its character is summed up in the phrase ‘causing a bit of bovver’.

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In their rejection or potential rejection of patriarchy, young men ‘are seen to embody one version of male power – that which is uncontrollable and unpredictable, even unknown’ (Hearn, 1998, p. 57). The argument in this chapter is that mediated through ‘underclass’ discourse, the idea gained precedence among policy-makers in the 1990s that a generation of young working-class men was emerging that had no patriarchal role – despite the siring of children – in ‘the family’ and as such were a threat to social stability. The causation of that ‘rejection’ of patriarchy in ‘underclass’ discourses is, of course, different to that of Hearn and Remy. It is not so much a wilful rejection by young men of patriarchy, but a rejection on the part of young working-class women to accept the young ‘fathers’ of their children as adequate partners (patriarchs). However, while the causation differs, the effect is held to be similar: the existence of fratrists intent on ‘causing a bit of bovver’. In that context it is argued that a particular manifestation of market workfare has developed which aimed at reasserting private patriarchy among young working-class families in order to ‘tame’ young men. The aim of this particular version of market workfare was to make young working-class men more attractive as prospective partners by encouraging them into work and ensuring they had above-subsistence incomes. Market workfare in this analysis becomes a mechanism to change the outlook of young working-class males to employment and, perhaps more importantly, to change the outlook of young workingclass women towards those young men as potential partners. In turn, by reincorporating young men into ‘the family’ their fratriarchal masculinity could be made a more predictable and controllable patriarchal masculinity. That would help stabilise ‘the family’ and help in the production and transmission of traditional moralities. Before embarking upon our explanation of the introduction of the configuration of market workfare essentially concerned with young people (men) we need to place developments in social security policy affecting young people in the 1990s within its context: a context that suggests a crucial element in the development of social policies for young people has been a view of them as a potential source of social instability.

Unemployment and social disorder: respectable fears and the regulation of neo-liberal accumulation In his book, Hooligan: a History of Respectable Fears, Pearson (1983) demonstrates how the perceptions of the ‘respectable classes’ have had a powerful impact upon the views of, and actions towards, young

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people in England. He demonstrates that in successive generations there are concerns with an alleged increasing lawlessness and moral degeneracy among young people and that in each generation such ‘trends’ among young people are seen as being something new. However, through an analysis of the socio-political discourses of the ‘respectable’ in consecutive generations, Pearson shows that such concerns are seemingly timeless. In other words, while each generation believes that its young people pose a threat to social stability and that this is a new phenomenon, the evidence shows that every generation has similar concerns about its young people. In this sense, it has been observed that young people have come to serve as a metaphor for social change: ‘a vehicle for the articulation of a broader set of fears about the quality of “society” and troubling issues’ (Mungham, 1982, p. 30). Such observations have important implications for the formation of social policies affecting young people. Pearson (1983), however, does not address the issue of how the perceptions of young people have been managed by the state through policy initiatives. Others (for example, Gillis, 1981; Mungham, 1982; Davies, 1986), however, have attempted to explore the complex relationship between the perceptions and actions of young people and the development of social policy. Essentially the argument of such commentators is that the view of young people as a threat to the social order has resulted in evergreater levels of control through extending the activities of the state. Such arguments have had great influence upon analyses of social security and labour market policy in the 1980s (for example, Mungham, 1982; Finn, 1987; Brown, 1990). In describing the early 1980s1 Mungham (1982), for example, argues that ‘modern panics over the young workless have thrown up a package of make-work schemes sustained by massive government investment’ (p. 35). He makes clear how he sees the relationship of such schemes to social disorder by quoting the work of Huston: ‘make-work schemes “are much more of a response to social instability than to an economic crisis as such”’ (ibid.). In this interpretation policy changes are more concerned with managing social instability than they are with managing economic crisis. Such arguments, however, do not acknowledge the complexities of social policy changes for young people, particularly in the 1980s, and assumes that the state is concerned with appeasing young people through the extension of social rights, be it only a right to attend a ‘make work’ scheme. The civil servants we interviewed taught us a different lesson. The state is not concerned with such ‘soft’ policy options. In brief, the state needs to get a return for its investment of

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public funds into schemes or benefits which, in this case, would extend beyond the acquiescence of young people. In other words, by focusing upon social disorder as the cause of social security and labour market policy change in the 1980s the impression given is that those changes were just reactionary: a response to the violent protests of marginalised young (mainly male) people. However, with the benefit of hindsight those changes that occurred in the 1980s did have a degree of coherence about them; a coherence that was very much concerned with economic crisis, especially the management of the economic crisis of the late 1970s/early 1980s. In that sense the policy response to disorder (discussed below) should not be viewed merely as an ad hoc reaction to that disorder. In fact, the social policy response of the Conservatives was in concordance with its economic policy initiatives towards neo-capital accumulation. However, the policy developments often seemed contradictory to the framework of analysis used to explain the origins of the disorder. The genesis of this argument can be found in the relationship between unemployment, social disorder and social security developments in the early 1980s. Between 1979 and 1984, the unemployment rate of females and males aged 18 and 19 increased by 176 and 219 per cent respectively (Davies, 1986, p. 124). The employment prospects for young people were dismal. In February 1981 the Central Policy Review Staff (CPRS) estimated that by the end of 1983, 50–70 per cent of the labour force under 18 might never have had a ‘proper job’ (quoted in Finn, 1987, p. 139). Far from triggering alarm, that prediction merely gave the Conservatives ammunition to individualise the causes of unemployment by arguing that young people lacked the correct skills and attitudes towards paid work and they had priced themselves out of labour markets (cf. Davis, 1986, pp. 55–9; Finn, 1987, pp. 139–41). What did cause concern among the Conservatives, however, was the social consequences of economic inactivity among young people, especially the violent disorder that erupted in mainly inner-city areas in mid-1981 and later in 1985. In February 1981 the CPRS forewarned2 that the effect of unemployment: in terms of future training, skills, attitudes to work and opportunities for crime and other forms of social disruption is undoubtedly a matter for justifiable concern. (quoted in Finn, 1987, p. 139)

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Then, initial responses to the disorder of July 1981 by senior members of the Conservative government acknowledged unemployment as a cause of the disorder. Even the Prime Minister, Margaret Thatcher, seemed to be connecting unemployment with disorder when she answered a question put to her on 7 July in parliament by Labour MP Robert Kilroy-Silk: All of them [the local authorities of Liverpool] are anxious to put the terrible events of the last few days behind them and to try to give some hope and improved morale to the area. As the hon. Gentleman knows there are very big problems. Unemployment is most certainly one of them … factories have been closing for quite a long time … We are anxious to take a very constructive approach to the problem and to help all that we can. (Hansard, 1981a, col. 260) However, the implications of such comments were quickly recognised, for in a Conservative Party broadcast the following day (8 July), Thatcher ‘carefully avoided’ reference to unemployment in relation to the preceding week’s events (The Times, 9 July 1981). However, other senior members of the Cabinet continued to make the connection between unemployment and disorder. Jim Prior MP3 (then Secretary of State for Employment), for example, when opening a YTS in Cheshire on 10 July said: We are extremely worried at what may be some of the underlying reasons for the problems last week. Undoubtedly the present high level of unemployment is a fruitful breeding ground for the sort of things we are seeing. We must recognise that to have such numbers out of work leads to disaffected people. (quoted in The Guardian, 11 July 1981) Furthermore, as Finn (1987, pp. 141–2) suggests, it is no coincidence that Margaret Thatcher announced a £500 million package aimed mostly at young unemployed people, during an opposition motion that stated: this House has no confidence in Her Majesty’s Government whose economic and social policies are spreading mass unemployment, undermining British industry and demoralising the country. (Hansard, 1981b, col. 820)

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Responding to unrest: pacifying young people through work We saw in Chapter 3 that ‘new Labour’s’ reforms were constructed through a discourse of ‘work is the best form of welfare’. Such ideas are not new. Central to any major social security change for able-bodied people has been the idea that they should work. The history of social security policy has been one of the proletarianisation of ‘passive labour’. Policy developments affecting young people in the 1980s were firmly located within such parameters: the expected outcome of policy change was increased labour market participation – on terms dictated by the market – of young people. The idea was that paid work would integrate young people into ‘mainstream’ society and in the process pacify their violent tendencies. The £500 million package that Thatcher announced in July 1981 was the first of several policy initiatives in the 1980s aimed at making young people work. However, as we have seen, the 1980s were highlighted by stagnantly high unemployment. Young people were acutely affected by unemployment. Of all unemployed people in 1979 about a third (35.9 per cent) were aged under 25. That proportion increased slightly so that by 1985 about 4 out of every 10 (38.5 per cent) unemployed persons were aged under 25. More importantly, however, the proportion of long-term unemployed who were aged under 25 increased from 16.1 per cent in 1979 to 27.7 per cent in 1985 (figures extrapolated from Department of Employment, 1981, Table 2.5; Department of Employment, 1985, Table 2.5). After that date the rates fall somewhat. It is unclear whether the falling rate of unemployment represents a real increase in employment for young people as it was a period of rapid change to the rules governing the claimant count and eligibility for out-of-work benefit, while the YTS and other schemes were also introduced. In Chapter 2 we showed how the unemployment of the 1990s created tensions for the Conservatives. The 1980s were also riddled with such tensions: while the Conservatives believed in the free market as the begetter of rising employment, there was a clear employment deficit. The consequence of that tension was a concerted effort to make young people more attractive to employers in two ways. The first involved ensuring young people were flexible and adaptable enough to fill existing and future vacancies. A 1980 CPRS report for example was critical of traditional definitions of skill and of apprenticeship training, arguing that employers should be able to define what skills (competencies) were

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relevant to the job, rather than having to negotiate with trade unions over such definitions (Finn, 1987, p. 138). After the introduction of YTS in 1983, the idea developed that rather ‘than being prepared for the specific task of a particular industry, young people [should be] given a range of transferable skills which would ensure their versatility and flexibility’ (Davies, 1986, p. 60). The second strand involved a concerted effort to reduce the wage levels and expectations of young people. Most Conservatives believed unemployment was high among young people because they had priced themselves out of labour markets and were therefore too expensive to employ. Hence there was a barrage of measures, aimed at reducing the wages and wage expectations of young people, beginning with the Young Workers Scheme (YWS) announced in July 1981 by Thatcher. The YWS was essentially a subsidy4 for employers if they employed a young person and paid them a low wage. The subsidisation of employers who paid low wages to young people was justified on the grounds that: Because the wages of young people are often too high in relation to those of experienced adults, employers cannot afford to take them on – even though it is clear many employers want to help. (Margaret Thatcher, in Hansard, 1981b, col. 835) Hence, the YWS was said to reflect the fact that the ‘Government have decided to provide some encouragement to employers to take on more young people at realistic wage levels’ (ibid.). The neo-liberal argument is clear: by reducing the cost of employing young people employers would be able to hire more of them. And the more young people in employment, so the thinking went, the less disorder there would be on the streets of Britain. The YWS had its origins in the CPRS report written in 1981 (and leaked in 1983). That report had a section entitled, ‘Action to widen wage differentials between young people and adults’ which, as well as outlining the proposals for a mechanism upon which YWS was based, also proposed reductions in benefit levels for young people and removing them from the remit of the Wages Councils (quoted in Finn, 1987, p. 140). Those measures were carried to their conclusion later in the 1980s. In the meantime, it was made clear that the YTS – introduced in 1983 as an alternative to the discredited Youth Opportunities Programme (YOP) – was seen as a mechanism that would ‘bring about a change in the attitudes of young people to the value of training and acceptance of relatively lower wages for trainees’ (Secretary of State for Employment et al., 1981, p. 13). Furthermore, in

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describing the forthcoming YTS, David Young, chair of the Manpower Services Commission (MSC), placed it in the wider context of its possible value in the accumulation strategies of individual companies: You now have the opportunity to take on young men and women, train them and let them work for you almost entirely at our expense, and then decide whether or not to employ them. (quoted in Davies, 1986, p. 59; Finn, 1987, p. 162) In other words, employers were getting the green light to use young people as a flexible (read expendable) form of labour, to be used and discarded in the interests of capital accumulation in changing economic situations. Indeed, it has been observed that the then Secretary of State for Employment, Norman Tebbitt MP, suggested that: ‘YTS trainees could be used to directly compete with Taiwanese and Korean factories producing components for UK companies’ (Finn, 1987, p. 156). In that sense the YTS can be seen as an important mechanism in the regulation of Britain’s neo-liberal response to global competition. To have the desired downward effect upon the wages and wage expectations of young people the government had to ensure that youth had little choice but to accept the allowances of the new training schemes. Hence, after guaranteeing YTS5 places for all who needed them in 1986, the right to claim out-of-work benefits (to be renamed Income Support) was promptly withdrawn from 16- and 17-year-olds under the Social Security Act 1986. That measure took effect from 1988, the year in which employees under the age of 21 were removed from the jurisdiction of the Wages Councils. The project – started in 1981 – to remove mechanisms that were thought to price young people out labour markets was complete: younger people no longer had recourse to the safety nets of out-of-work benefits or minimum wage legislation. Concern with out-of-work benefits did not just extend to the youngest of workers. There was also concern with ‘benefit dependency’ among those people in their late teens and early twenties. In particular, it was felt by the Conservatives that the benefit system – through higher payments to ‘board and lodgers’ in bed and breakfast accommodation than householders – was reducing commitment to the labour market. Fuelled by a media frenzy, in part orchestrated by the government (cf. Stewart, Lee and Stewart, 1986, p. 376), which depicted young unemployed people living it up on the ‘Costa del Dole’, the government introduced in 1985 time and financial limits for young people

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living in board and lodge accommodation: the notorious ‘Board and Lodging Regulations’. One of the main reasons behind this change was the government’s view that the board and lodging payments presented young people with a disincentive to work as they could not command a wage equal to or above their benefit entitlements whilst living in such places, and without new regulations, social security officers could not stop them living there (Tony Newton, Minister for Social Security, Hansard, 1985b, col. 780). The aim of social security policy developments for young people aged 16–25 were essentially to aid the efficient working flexible labour markets that, as we saw in Chapter 2, were deemed necessary for neo-liberal capital accumulation. Changes in social security policy were aimed at ensuring that young people had little means of subsistence except for employment in the formal economy, and that when in employment they would be paid the lowest wage possible: a level to be determined by the market. Furthermore, schemes such as the YTS, it was hoped, would not so much give young people the skills and knowledge to enable them to do a specific job, but would ensure that they were versatile and flexible enough to meet the demands of capital. Given such skills and reduced wage levels, the expectation was that young workers would be absorbed by increasingly flexible labour markets. In that sense, and contrary to the arguments of Mungham (1982), social policy changes affecting young people in the 1980s were very much concerned with managing economic crisis. The social security and labour market policy changes discussed here were concerned with managing what were seen as the rigidities of Keynesian economic growth (see Chapter 2) and were crucial to the long-term aim of stable economic growth based upon neo-liberalism. Hence, whilst the changes seem contradictory – that is both an acknowledgement and an exacerbation of the marginalisation of young people – it needs to be understood that the changes were consistent with the shift to neo-liberal capital accumulation. At its crudest, young men could be controlled through ensuring social security led to some attachment to the labour market, rather than away from it. Active proletarianisation through ever-stricter measures of labour discipline could tame even the most riotous of young men: the free market was an institution of integration and pacification. However, the Conservatives’ project was proving problematic, for while it was determined to reduce the wages paid to young people relative to adults,6 it was thought by policy-makers7 that wages on offer to young people were not high enough to attract them into employment

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and that a mechanism was required to manage that tension. An in-work benefit for single people and childless couples was needed to encourage such people into the labour market because of stagnating wages at the so-called ‘lower end’ of the earnings spectrum. The Tories’ regulatory instruments of the 1980s required further adjustment as dilemmas emerged in the 1990s. Meanwhile, a new wave of social unrest, mostly on socially rented housing estates, hit Britain, to be explained by discourses imported from the USA and related to lone motherhood.

The 1990s: ‘barbarians’, lone mothers and the ‘underclass’ The early 1990s were marked by violent disorder on social rented housing estates.8 The actions of mainly young men living on those estates affected, particularly on the Meadowell Farm estate in North Shields, prompted much commentary. Conway (1992), for example, points to the complex causes of the disorder, while Wharton and Fenwick (1992) attempt to analyse the local press’s construction of the events in Tyneside leading up to and during the disorder. What those commentaries do not do, though, is acknowledge or attempt to explain why it was mainly young men involved in the disorder. In order to understand the gendered nature of the disorder, the divergent commentators Dennis and Erdos (1993) from their ethical socialist view (although published through the right-wing IEA) and the socialist-feminist Campbell (1993) proved invaluable. The analysis offered by Dennis and Erdos clearly located the disorder on social rented housing estates in the increasing number of (nevermarried) lone mother-headed families on such estates: never-married lone mother-headed families were held by Dennis and Erdos to starve young working-class men of the experience of marriage and fatherhood. In contrast, Campbell celebrated the role of (lone) mothers on socially rented housing estates and was critical of the absence of work for young males. She was also critical of a wider cultural environment in which the violence and coercion of ‘real war, real killing’ (Campbell, 1993, p. 323) are central.9 While those two approaches to explaining the social disorder of the early 1990s seem at odds, particularly through their differing view of lone motherhood, it soon becomes apparent that both analyses locate the ‘problem’ of riotous young men in their masculinity. For Dennis and Erdos, as we shall see in more depth below, young undervalued men are no longer needed as fathers because of the increase in never-married

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lone-mother families. In their analysis marriage and fatherhood are the most powerful determinants of a stable ‘breadwinner masculinity’ and are experiences to which young men used to aspire through observing their forebears. In brief, the rise of lone motherhood was held to be starving young men of the ‘correct’ role models (see Chapter 4). In contrast, Campbell (1993, p. 323) argues that the construction of masculinity through the images of war meant that the ‘lads’ [on socially rented estates] problem was not that they were starved of role models, it was that they were saturated with them’. While the approaches of Dennis and Erdos and Campbell do not acknowledge the complexities and multiplicity of masculine constructions (Williams, 1998), their work does add an important dimension often left unexplored in the analysis of disorder (cf. Hearn, 1998). Despite their similar concerns with the masculinity of young men, it was the work of Dennis and Erdos – through its discursive similarities to a number of publications emanating from the IEA – that informed the policy-making process, and in particular the introduction of the ETU. As Hearn (1998, p. 54) notes: an important part of this policy debate has been the attempt to link lone mothers and young men’s criminality. To put this simply, which seems an appropriate way to put a simple argument – lone mother families are accused of producing sons and young male criminals rather than husbands or (future) fathers. And as the cycle is assumed to go on as such would-be fathers fail to respond in the next generation … the notion remains powerful in government and in political party circles. It is the family dimensions of the threat of the mob. The introduction of market workfare, insofar as it was for young people, was driven by a concern over the increasing numbers of nevermarried lone-mother families.10 If allowed to rise unchecked, it was believed such lone motherhood would lead to further disorder from undervalued young men unable and unwilling to take their ‘natural’ place as fathers in these families. A discourse emerged from the writings of certain right-wing think tanks in the 1990s portraying the emergence of a generation of violent, anti-social males. This discourse powerfully constructed the idea that young unemployed working-class men were growing up without employment and as a result without any hope of experiencing marriage and fatherhood. That was important because marriage and fatherhood were constructed as a civilising

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process which young men must pass into or (forever?) remain barbarians outwith the social controls which bind people to civil society. Murray (1990, pp. 22–3) summarises the arguments: work is more important than merely making a living, getting married and raising a family are more than a way to pass the time. Supporting a family is a central means for a man to prove to himself that he is a ‘mensch’. Men who do not support families find other ways to prove that they are men, which tend to take various destructive forms. As many have commented through the centuries, young men are essentially barbarians for whom marriage – meaning not just the wedding vows, but the act of taking responsibility for wife and children – is an indispensable civilising force. Young men who don’t go to work, don’t make good marriage material. Often they don’t get married at all; when they do, they haven’t the ability to fill their traditional role. In either case, too many of them remain barbarians. According to Murray young men are driven by ‘essential impulses’ of barbarism which can only be tamed through the responsibilities that marriage brings (see Mann and Roseneil, 1994, p. 322; Roseneil and Mann, 1996, pp. 206–7). Once again, Murray’s arguments have resonances of the functionalist school of thought which suggests that one of the main functions of the nuclear family is to stabilise the personalities of adults (Parsons, 1956). While Dennis and Erdos (1993) are less happy at using the term ‘underclass’, their ideas are similar to those of Murray. Dennis and Erdos argue that the rise in the number of ‘fatherless families’, encouraged by left-wing academics and feminists, has effectively made young men redundant. That has resulted in ‘incivility’ particularly among young working-class men. No longer, they suggest, do those men strive for the same goals as their forebears, for their role as breadwinner has been undermined: ‘Unemployment’ was indeed the key to the Tyneside riots of 1991. But not unemployment in the sense of the absence of opportunities to work as a paid employee in a drudging job (much less remunerative and exciting than crime). It was unemployment in the sense of the weakening or complete disappearance of the expectation that a young man should prepare

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himself for the larger employment to which a job is merely instrumental. This is his employment for a lifetime in a partnership of mutual support of a mature man and mature woman. It is employment in a years’ long commitment to nurturing and socializing until his child is in turn able to earn its own living and raise its own family. (Dennis and Erdos, 1993, p. 106; also Dennis, 1997, ch. 15) Finally, Morgan (1995) suggests that young men are no longer needed in their ‘traditional’ role as ‘breadwinner’ because of deregulation in the labour market conjoined with increasing labour market participation among married women, and an alleged favouring of lone mother-headed families over two-parent families in the tax/benefit system.11 The result of that privileging of lone motherhood, alongside the saturation of the labour market by married female labour, Morgan contends, is a situation whereby men, particularly young unemployed men, no longer have any pre-defined role in society. In turn, that has led to criminal behaviour or, as she puts it, the creation of a ‘warrior class’. We have a discourse suggesting young men in the 1990s were prone to social disorder because of the increase in never-married lone motherhood. Because of the growth of lone motherhood it was held that young men were not experiencing the civilising experience of marriage and its attendant responsibilities. Our interest, however, is in the ways in which that discourse constructing young men as violent barbarians helped framed the response of policy-makers. In his most sophisticated thinking, Peter Lilley MP, as Secretary of State for Social Security, clearly linked the increase in never-married lone motherhood to the changing economic fortunes of undervalued labour. As we have seen, the real wages of the poorest paid have stagnated over the past two decades and that has been encouraged by successive Conservative administrations. It is that economic change – accompanied by increasing real wages among the higher paid – that Lilley saw as being crucial in explaining the rise of never-married lone mothers: This widening of earning differentials between skilled and unskilled does not just affect unemployment. It lies behind, or is intertwined with, many of our social problems. It may play a major part in the break-up of families, the growth of lone parenthood, and a growing

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welfare dependency. It may even play a part in explaining delinquency and crime. (Lilley, 1994, p. 6; also Lilley, 1995, pp. 26 and 32) Lilley clearly links the widening gulf between the highest and lowest paid as being a major source of social concern (in a manner reminiscent of communitarianism), but associating it with increasing lone motherhood and the ‘breakdown’ of ‘the family’. For Lilley, changes in family forms were being driven by a narrow set of economic considerations rather than being related to wider and more complex social factors, including changing expectations and attitudes towards sexual mores (cf. Giddens, 1991). Moreover, Lilley’s analysis raises more questions than it answers and arguably trapped the Conservatives in something of a dilemma. Lilley’s answer to this disapproved form of parenting seems to be: reduce growing wage inequalities. ‘Command’ economists might think of trying to cap the ever-increasing wages of the better-off, or trying to increase the wages of the lowest paid, or both. Except, direct intervention in wage markets was ruled out because of the ascendancy of neoliberal economic thought within the Conservative hierarchy (Chapter 2). The policy initiative turned out to be increasing the net income of the poorest paid without intervention that acted to the detriment of labour and wage markets. That initiative was a combination of ETU and JSA.

Market workfare and the Conservatives: civilising the ‘barbarians’ One the main reasons why the Conservatives believed that never-married lone motherhood was increasing was that there were few suitable young men available to be husbands and fathers.12 David Willetts MP (1993, p. 10) expressed such arguments as follows: The most convincing explanation of the dramatic increase in the number of young never-married single parents … is that the ‘marriageable pool’ [of males] is seriously depleted. Men who are good bets as husbands … must be holding down a steady job with a good wage. But in the inner-cities of … Great Britain such men are increasingly hard to find. So even if as a woman you want children, there is no one it is worth getting married to, to help you bring them up.

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The stagnation of wages for under-valued labour had serious implications for young men, for they were deemed no longer to be attractive as prospective husbands. Willetts’ comments have resonances of the work of Murray (1990) who also suggests that unemployment has a deleterious effect upon the marriage prospects of young working-class males. The problem with unmarried young men was the threat of violence they might present to society. In neo-liberal critiques of welfare policy it was only marriage and the responsibilities it brings that could civilise young men from the barbarism of adolescence and young adulthood. That argument, however, cannot be viewed in isolation, for it is inextricably linked to arguments concerning the level of social security benefits available to never-married lone mothers. Lilley was careful not to suggest a simplistic link – the view that social security benefits for lone mothers encouraged young women to have children13 – between benefit levels and increasing numbers of never-married lone-mother families. In contrast, his focus was upon the relationship between benefit levels and the stagnation of wage levels of under-valued labour. He argued that ‘for many unskilled low earning or unemployed people it is not easy to compete with the state for the role of breadwinner’ (Lilley, 1995, p. 26). In that analysis undervalued young men are unable to compete with the state as the provider for families. Hence, young women were in danger of becoming, in the words of David Willetts MP (1993, p. 10), ‘married to the state’. The image is created of young men grappling in competition with the state for the affections of young women, and young women rationally choosing the best financial package on offer. That is an extension of neo-liberal economic analyses into familial and gender relations. The consumer (the young woman) is in the powerful position of having a choice between supplier (the young man or state) offering the best ‘deal’. Her economic rationality will shine through and she will choose the state over unemployed young men. Quite obviously, attempts to explain the rise in never-married lone motherhood merely in terms of markettype decisions are inadequate. The important point though, is that such logic was driving the policy developments of the Conservatives. If your aim is to encourage young women to choose the alternative package of a young working-class man as a husband, there are two possible ways of doing it. First, you could reduce the attractiveness (value) of the package available form the state (i.e. reduce the level of, or abolish altogether, the benefits available to lone mothers). On the whole, that approach was rejected, as we have seen, because of the possible harm to the children of lone mothers that might occur if benefits were

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reduced. Second, you could attempt to increase the financial potential of young working-class men. With specific reference to those men, that, it is our belief, was the role of market workfare; not only was it hoped by policy-makers that market workfare would lead to greater levels of employment for such men (Chapters 2 and 5), it would provide them with an above-subsistence level wage. It is to that aspect of market workfare that we now turn. In drawing the attention of parliament to the rules governing the piloting of the ETU, Alistair Burt MP (then Minister for Social Security and Disabled People) noted how: When we look at the characteristics of unemployed people we find that 60 per cent of them – 1.35 million out of 2.32 million – are without dependent children. Experience shows that many of these will move back into work quickly, but it is apparent that some people still face disincentives to move into work. With their skills at their disposal, the income that they can command in work is not enough to provide an incentive to work. (Hansard, 1995b, col. 876) Clearly the emphasis is upon reducing unemployment among undervalued labour, who were seen as not having the ‘correct’ (or any) skills. More explicitly Burt argued: demand for unskilled labour has decreased. More and more, employers are looking for people with higher skills levels. That renders vulnerable the workers who do not have such skills and risks trapping them in unemployment. That is wrong for us all. Earnings top-up is part of the answer to that problem. (ibid., col. 880) The question that Burt does not address is why unemployment among under-valued labour was such a big concern. In neo-liberal economic analyses unemployment is seen as an inevitable feature of the free market (Hayek, 1944, pp. 79–80; Hayek, 1980, p. 17). Hence, concern with economic inactivity among under-valued labour lay not so much in economics, where it is seen as being a part of the parcel of economic development. We must look to the social costs of unemployment – particularly to the threat of social disorder – for explanations of why economic inactivity became such an important issue in the 1990s and hence why market workfare was introduced for young people. The

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‘underclass’ discourse of an uncivil, dangerous group of individuals was the main concern driving the introduction of market workfare during the Conservative regimes. While all the civil servants to whom we spoke used discourse similar to that of ‘underclass’, it was civil servant A who used it most explicitly: The real main headache I can see is this quite large and growing group of young men between the ages of about 16 and 30 now, who never have worked and whose prospects of working are very poor … they used to get married and settle down. They used to marry the young girls who are the … single non-married women. The single non-married women for reasons which are not too difficult to know are not very keen to marry them, because they are better off on their own. Not just in cash terms, but because these people are pretty unmarriageable prospects. I mean, they have got criminal records. They get drunk. They beat you up. They do not produce money. So who would marry them? … We are trying hard, the JSA among other things, to stop that cohort from perpetuating, but it is very difficult. It starts with the families, the broken homes … The interview went on: CG: Is this who [young undervalued labour] the ETU is aimed at? Civil servant A: It is. The difficulty is getting them into work. I mean, in the same way as they are not marriageable prospects, they are not employment prospects. If you are an employer, these are the last people you would take on. They are unreliable. They are unskilled. They are often illiterate. So, what sort of job can you find them to do which you can trust them in? I think it is not a surprise they are alienated and violent and that, because they do not see society doing much for them, so they do not do much for society. I think it is a real problem. It is much more of a problem, I think, than single women … In his account, civil servant A links the issues of the economic inactivity of young under-valued man and never-married lone motherhood, the latter being a result of the former. In an analysis similar to that of

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Lilley never-married lone motherhood is seen as the result of economic changes that have left young under-valued men redundant. If only such men could be made more dependable – employed and earning an above-subsistence income – then the problems of never-married motherhood and civil disorder could be overcome: potential never-married lone mothers would no longer have reason to reject unreliable and disobedient young men, who, in turn, would benefit from the civilising force of marriage. For young people, that was the role assigned to market workfare. In our conversation civil servant A was confirming market workfare was crucial to the project of making young under-valued labour more financially attractive and, following on, a more marriageable prospect. How were ‘new Labour’ to manage similar issues?

‘New Labour’ and the lads’ New Deal The first point to note is that ‘new Labour’s’ approach to family life is somewhat contradictory. On the one hand, it argues that families outside of the nuclear form are often able to ‘raise their children every bit as successfully as married parents’ (Secretary of State for the Home Department, 1998, para. 8). On the other hand, it still believes that: marriage is still the surest foundation for raising children and remains the choice of the majority of people in Britain. We want to strengthen the institution of marriage to help more marriages to succeed. (ibid.) Clearly ‘new Labour’ feel that children should be brought up within ‘the family’. The aim of ‘new Labour’ is to strengthen ‘the family’ as an important social, economic and cultural institution. ‘New Labour’ is concerned about the anti-social behaviour which follows in the wake of familial breakdown. We are told by the Ministerial Group on the Family, for example, ‘[r]ising crime and drug abuse are indirect symptoms of problems in the family’ (ibid., para. 2), while the Home Secretary reiterates ‘new Labour’s’ manifesto pledge to: uphold family life as the most secure means of bringing up our children. Families are the core of our society. They should teach right from wrong. They should be the first defence against anti-social

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behaviour. The breakdown of family life damages the fabric of our society. (Straw, 1998, p. 1) Hence, like the Conservatives, ‘new Labour’ see ‘the family’ as being ‘society’s most important unit’ as it gives ‘moral preparation that no other institution can bring’ (Blair, 1998, p. 13). However, we are also told that governments cannot bludgeon people into living in a particular family form (Secretary of State for the Home Department, 1998, para. 4; Straw, 1998, p. 3) and that governments ‘cannot turn the clock back’ when it comes to economic change that has impacted upon ‘the family’, especially the increase in the numbers of mothers in paid employment in the formal economy (Straw, 1998, p. 2). So, we have a set of dilemmas that look very similar to those that faced the Conservatives: a desire for people to live in ‘the family’ because of its importance for socio-economic stability, but also a belief that individuals should not (and cannot) be forced into such relationships by the state. By implication, all the state can do is create the circumstances in which individuals may themselves desire to get married. As we have seen in this chapter that line of thinking has important implications for gender relations, for one of the main concerns continues to be the suitability of young working-class men as marriageable prospects. More precisely, there continues to be a concern that because of their antisocial (criminal) behaviour and poor employment records many working-class men remain unmarriageable (cf. Coote, 1994; Field, 1995). At a general level ‘new Labour’ have engaged with what has become labelled as ‘laddism’ or ‘new laddism’, in which Hearn (1998, p. 58) argues fratriarchy has seen a resurgence. ‘Young Men Challenged to Shed Laddish Image’ the Home Office tells us on announcing that young men need to ‘shed their “beer, sex and football” image and show they can play a positive role in society’ (press release 404/98). That particular press release is structured through a tension between focusing upon young men as the problem (their ‘laddish’ behaviour) and socio-economic changes that young men are facing. So, for example, it notes how inter alia changes in employment, education and housing are ‘causing an insecurity and uncertainty among young men’ (ibid.). However, we have seen (Chapter 3) that the ‘new Labour’ government also locates ‘unemployment’ within the actions and attitudes of young men who are unemployed. At a more specific level and as part of its role in devising ‘a new approach to family policy’ (Straw, 1998, p. 2) the Ministerial Group on

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Figure 5.1 Another delivery of idle, thieving bastards that work’s going to turn into marriageable DIY fanatics.

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the Family has convened a seminar looking at issues facing young men. That seminar discussed various issues, although the point was rightly made that the issues facing young men were not the fault of young women, or indeed could be addressed by ‘rolling back the reforms which have allowed girls and women to begin using their own potential in the world’ (Phillips, 1998, para. 35). Phillips (ibid., para. 25), drawing upon her research with young men and women, noted how industrial changes were affecting young men: There was a concept of ‘women’s jobs’. Often these were the jobs which men were not prepared to do: badly paid, repetitive and boring. While 16–19 year old boys were earning marginally more than their female counterparts, they were also considerably more likely to be earning nothing at all. Those observations were seemingly built upon by Williamson’s (1998, paras. 39–43) contribution that examined relationships between the attitudes and behaviour of young men in public spaces and their inability or unwillingness to engage in the formal economy. The view that seemed to be emerging from the seminar is not unfamiliar to the left: a view of young working-class men’s criminal activity being a reflection of their relative deprivation (cf. Hearn, 1998, pp. 47–8). In such a view crime becomes a replacement for employment in the transition from childhood to adulthood and a surrogate for the way in which boys learn to men.14 Coote (1994, pp. 2–3) neatly summarises the argument: while women have added the role of wage-earner to their traditional role of home-maker and carer, men have so far simply lost their traditional breadwinning role. Young men grow up fearing there will be no jobs for them, and lacking (in Albert Cohen’s words) the means of realising their aspirations to become men. In communities where there are no jobs for men or women, the girls still have their rites of passage: they can claim adult status by becoming mothers … Most young mothers make a good job of parenting, considering the odds stacked against them. When they fail to marry the fathers of their children, they may be making a realistic assessment of the available options. The boys who get them pregnant may appear to them to have very little else to offer. The young men must find other ways of growing up. In her work for the left-leaning Institute for Public Policy Research there are resonances of the arguments of underclass theorists noted

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above. The difference between the two is the way in which lone mothers are seen as being the ‘problem’ by the latter and the differences in the causation of unemployment (structural in the case of the former, individualised in the case of the latter). Such arguments are reflected in the work of the one-time Minister for Welfare Reform, Frank Field (1995). Despite his disdain for rightwing ‘underclass’ theorists, Field’s arguments and level of empiricism brings his position remarkably close to those authors he so despises. Unlike the ‘underclass’ right, Field sees unemployment as being the result of Conservative policy encouraging the demise of British industry, in particular manufacturing. However, once unemployed, Field argues, unemployed people, particularly the young unemployed, get trapped in a world of disincentives created by means-tested benefits. That is problematic because: Being without work permeates everything. It changes how women regard men, for example. It not only leads to crime but also affects how the probation service then deals with the criminal. What kind of hope can you build into a person’s life if there is no chance of work and of therefore beginning to plan what type of life they might lead with their partner? (ibid., p. 9) For Field unemployment (in the sense of not having a paid job in the formal economy) helps to structure wider social relations. However, he goes on to reject what he calls the ‘latest American wheeze … that working-class girls are faced with a hideous dilemma: all of sudden there are apparently fewer decent men to marry’ (ibid., p. 10). Field’s assertion, although it is not made clear, is that the rise in never-married lone mothers is due to the unemployment of young working-class women rather than a rejection of young working-class men.15 No matter what the cause of the rise in never-married lone motherhood, the result for young working-class men is held to be same as outlined by the ‘underclass’ right. Such men face a life of ‘apparently never-ending adolescence’, the result of which is a ‘level of aggression and violence [that] is steadily on the increase’ (ibid., p. 13). Field labels that trend in violence among young working class as the ‘new barbarism’ (ibid., chapter 1). There is probably greater similarity between the position of the Conservatives and ‘new Labour’ than there are differences. So, for example, both the Conservatives and ‘new Labour’ clearly believe that changes

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in family life, in particular the increasing incidence of never-married lone motherhood, are economically driven. As we have seen, Peter Lilley MP argued for the Conservatives that lone motherhood was increasing because of the widening gulf between the highest and lowest paid which, in turn, was caused by the stagnation of the wages of the latter. In Coote’s analysis increasing lone motherhood is also being driven by economic change, although her focus is upon unemployment alone rather than widening wage differentials. What unites those approaches is that policies need to be developed that help young men into employment. We have seen that market workfare – a combination of the ETU and the JSA – was the Conservatives’ response. A variant of market workfare – the NDYP – is ‘new Labour’s’ response.16 At that juncture the NDYP becomes closely associated to issues concerning the relationship between (un)employment, gender relations and criminal activity. In particular, it becomes associated with a project initiated by the Conservatives concerning the ways in which ‘the family’ can be reasserted through ‘breadwinner masculinity’. The work of Land (1999) points in such a direction. Land notes (ibid., p. 139) how: Overall a commitment to raising the skills of lone mothers and investing in their human capital is not evident either in the New Deal for lone parents or in the national childcare strategy. It is considerably less than in the New Deal for young people. Is this because the latter includes a majority of actual or potential male breadwinners? Unemployment rates among young men are significantly higher than among young women. For Land the NDYP – indeed much of ‘new Labour’s’ welfare reform programme – represents a means of further encouraging what she calls the ‘male breadwinner model’. We too see such a role for the NDYP. However, our focus is not so much upon the way in which the NDYP plans to increase the human capital of conscripts (because we are not convinced that is its purpose), but the way in which it intends to discipline young men into the ways of ‘the market’ in the hope that they will become more employable and therefore have more stability in their employment patterns. The aim, however, is the same: to make young men better prospects as potential breadwinners because of their newly found ‘employment’. In other words, the market workfare developments of ‘new Labour’ aim to continue the re-establishment of private patriarchy that was begun, framed by underclass discourse, by the Conservatives.

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Conclusion This chapter has analysed the ways in which the masculinity of young working-class men has been problematised and attempts to manage it have been put in place by recent Conservative and ‘new Labour’ governments. It has not critically evaluated whether the view of such young men as ‘barbarians’ was justified. In many ways such considerations were immaterial to our focus which was upon the way in which policy-makers perceived those men as having, in the words of Hearn, ‘troubled masculinities’. In an extension of historical concerns with what Remy describes as fratriarchy we have shown how policy-makers saw such masculinity in the 1990s as being a threat to the patriarchal family as the social and cultural basis of the free market. The issue to be managed was not so much a perceived rejection of patriarchy by young men, as Remy’s use of fratriarchy implies, but a rejection of young working-class men by young working-class women. The aim of market workfare in that sense was to re-establish the marriage prospects of working-class men. The barbarianism of fratriarchy could only be tamed through a reassertion of patriarchy. The aim was to reconstruct what, following Lewis, Williams (1998, p. 65) calls a ‘male breadwinner [welfare] regime’ by returning a male to the role of ‘breadwinner’ in families of future generations. That left governments facing a number of dilemmas, the most important of which was managing the economic behaviour of young men within philosophical approaches that reject intervention in market mechanisms. In other words, how could the free market be managed, given the importance attached to economic phenomena in causing anti-social actions, to increase the participation of young working-class men in paid employment? Market workfare aimed to do just that: to work with, rather than against, market mechanisms in an attempt to increase the employment participation of and net incomes of young working-class men. The policy developments we have discussed, however, were more than just concerned with managing the anti-social actions of young working-class men. They were also concerned with managing the shift to, and consolidation of, neo-liberal capital accumulation (Chapters 2 and 3). Social security and labour market policy developments for young people in the 1980s were, for example, aimed at making them more flexible in their approach to employment and cheaper to employ. Flexibility and low wages were central pillars of the shift to

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neo-liberalism (Chapter 2). In the 1990s the development of market workfare was concerned with consolidating that shift through maintaining downward pressure on wage levels and widening the supply of labour, while also helping to maintain the patriarchal family as the social and cultural basis of the free market. That approach we maintain has been followed by both Conservative and ‘new Labour’ governments.

6 Speenhamland: In-Work Relief at the Dawn of Modernity

Classical economics informs us that people in work, the ‘economically active’, have to be paid more and separately from those on income maintenance because of the otherwise adverse affects on the free market. The usual way of achieving separation has been to set benefit at such a low rate and on such demeaning terms that paid work always seemed preferable. The argument’s economic force rests on motivating our rational self-interest, but it has a moral dimension too. Those people who really do have to claim income maintenance on these terms can be portrayed as a residuum, worthy by turns of our sympathy or disgust, whilst those working and claiming are criminalised. However, in the late twentieth century the upper rates of income support collided with low wages making it difficult to establish whether working at entry level wages really was more profitable than claiming benefit (as we have explained in Chapters 1 and 2). If that alone was an insufficient pressure to prompt policy changes by the government, mass unemployment had also so penetrated each social division in a spatially patterned manner that the social control function of income support was undermined. When the social as well as the economic and financial circumstances of the lowest paid workers seem no different from those of the claimants, the question moves from the obvious ‘why work?’ to moral and political ones about responsibilities and duties in civil society rather than just the purpose of social security. It might be ironic that this should happen at a time of neo-liberal economic conservatism, but it is not that surprising given the historical context of the 1970s economic crisis, in response to which the radical thrust of Conservative measures re-formed the whole economic landscape of the country. Yet the social mode of economic regulation seems to hark back to another age. Why should they travel the road of 120

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in-work benefits and utter the shibboleth of Speenhamland when the 1834 reformers had already visited the place, razed it, and gone on to prove the effectiveness of deterrent workhouses and means-testing? In 1795 at the dawning of modernity, Berkshire magistrates devised a ‘system’ of poor relief which has become a social policy by-word for inefficiency and profligacy in administration. At the end of the second millennium, two centuries after that fateful meeting in the Pelican Inn Speenhamland, now a suburb of Newbury in Berkshire, students of the subject are warned of its horrors – ‘employers tended to lower wages whilst large families and marriage were encouraged. The system became corrupt’ (Denny, 1998, p. 6). And yet as we cruised through the disorganised capitalism of late modernity, the last century’s most radical neoliberal administration reformed the Heath government’s cautious Family Income Supplement into Family Credit – an allowance-in-aid of wages by any other name. Next, Britain’s most popular Labour government reformed it directly into Working Family Tax Credit. Social security benefits paid whilst claimants are in regular employment have become the norm and indeed the backbone of income maintenance. Classical liberal economists would be only slightly more apoplectic than Beveridge. Both would be uncomprehending. What has happened to make that bête-noir of the liberal economists, state intervention in the free market of wage labour, the nostrum of their heirs? One may venture curiosity at the complacency with which the new order in liberal economics has been received. Whilst claiming a link with the 1834 radical new poor law principle of less eligibility, Ellison and Pierson (1998, p. 6) do not perceive any contradiction or inconsistency in the government offering the ‘carrot … [of ] some form of income supplement for families with a low-waged breadwinner’ whilst it pursues flexibility in free market policies. The point of less eligibility was that the independent labourer should be better-off than the pauper, without recourse to income maintenance of any kind – never mind a weekly benefit whilst in work. Hewitt (1998, p. 63) correctly identifies the political right as being consistently supportive of a residual conception of need which translates directly into means-testing those people ‘unable to participate in the labour market [who] require their minimum needs to be met’. As the market is the best means for atomised individuals to seek their own self-interest, income maintenance should be ‘pitched at an absolute minimum level to avoid giving out the false signals or “perverse incentives” that discourage individuals from making their livelihood through gainful employment’ (ibid., p. 64). Blakemore too regards the ‘rising laissez-faire orthodoxy in

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economics’ from the late eighteenth century onwards as paramount in bringing about an end to the subsidisation of wages in 1834 because ‘supply and demand should determine the price of labour, as it does any other commodity’ (Blakemore, 1998, p. 43). The Speenhamland system had kept the price of labour ‘artificially’ low by a subsidy, effectively, from poor law ratepayers. Of course the first liberal economists wanted to promote and justify low wages, but not on terms which contaminated the connection between labour and payment, working and not working.

Loaves and working men The Berkshire magistrates may not have been the first to authorise poor law payments in aid of wages, but it has been well enough documented for them to take the historical credit, and even enter a glossary, viz.: Speenhamland system An informal system, widespread in Britain before the introduction of the ‘new’ Poor Law in 1834, to supplement the income of poorer agricultural and rural workers. Public money, gathered in the form of local rates or taxation, was used to subsidize poorer workers’ pay on a ‘sliding scale’ (the lower the wage, the higher the subsidy). (Blakemore, 1998, p. 212) In the 1790s the rural poor faced immense economic pressures. Although the war with revolutionary France had increased employment opportunities, the shortages it caused because of disrupted trade, plus a number of poor harvests (particularly 1795/6, 1799/1801) and an increasing population meant it was likely that real wages were declining (Deane, 1965, p. 265). In 1796, Samuel Whitbread – a non-conformist brewer – attempted to introduce a wage-regulation bill because he wished to relieve the widespread poverty amongst labourers. As Hansard reported: It was his wish to rescue the labouring poor from a state of slavish dependence: to enable the husbandman, who dedicated his days to incessant toil, to feed, to clothe, and to lodge his family with some degree of comfort; to exempt the youth of this country from the necessity of entering into the army or navy, and from flocking to great towns for subsistence: and to put it in the power of him who ploughed and sowed and threshed the corn, to taste of the fruits of

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his industry, by giving him a right to a part of the produce of his labour. (Hansard, 1796, col. 703) Whitbread’s bill, if not his sentiments of help for the poorest, was opposed at its second reading by the Prime Minister, William Pitt. Pitt had principled objections to a statutory minimum wage which were derived from the new political economy, though he also pointed out that a minimum wage would not solve poverty in large families unless the rate were set so high ‘it might operate as an encouragement to idleness’, whereas if the statutory minimum wage were low it would not actually relieve poverty in work. Pitt identified clearly the ‘social question’ of working poverty and child-rearing – and he made a suggestion as to how it could be solved which began the modern debate on child allowances. Pitt proposed that relief for the poorest working families should depend on the number of children in them, as: ‘after having enriched their country with a large number of children [such families] have a claim on its assistance for their support’ (Hansard, 1796, cols. 709–10; quoted in George, 1968, p. 187 and Macnicol, 1980, p. 4). Nothing came of either Pitt’s suggestion at a national level, or Whitbread’s bill, but the Speenhamland story was already unfolding parish by parish. Macnicol shows how the issue of public financial support for children was characterised until the late 1930s by a dichotomy between either a minimum wage or an allowance for children (op. cit., chap. 1), both of which were profoundly tainted by the debates and experiences discussed in this chapter. The year before the Whitbread bill the aim of the magistrates at Speenhamland had also been to impose a minimum wage. The meeting had been announced in the Reading Mercury (20 April 1795) as being about how to ‘proceed to limit, direct, and appoint the wages of day labourers’.1 However, at the meeting the introduction of a minimum wage was rejected. The minutes of the meeting leave no clues as to why that was the case. Neuman (1982, p. 82), however, speculates that the magistrate, Reverend Edward Wilson, probably ‘deflected the other justices from their original intention of fixing wages’. Wilson was a disciple of Adam Smith, noting in his Observation on the Present State of the Poor and Measures Proposed for its Improvement published in 1795 that ‘the law can never properly regulate wages’ (ibid., p. 81). However, the Speenhamland magistrates were not willing to let their rural poor flounder with no form of assistance. Hence, they introduced a sliding scale of relief such that when a gallon loaf of bread cost

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one shilling: every Poor and Industrious Man should have for his own Support 3s weekly, either produced by his or his [sic] Family’s Labour, or an Allowance from the Poor rates, and for the support of wife and every other of his Family, 1s 6d … When the Gallon loaf shall cost 1s 4d then every Poor and Industrious Man shall have 4s Weekly for his own, and 1s and 10d for the Support of every other his Family. And so on in proportion as the price of bread rises or falls. (Berkshire Record Office, 1795, pp. 435–6) Thus was formalised the first in-work payment for the ‘industrious’. It was the fact that relief was based upon a sliding scale according to how much the labourer earned and the size of his family that became the focus of critical attention over the next three decades. Through certain interpretations of Adam Smith’s The Wealth of Nations, contemporaries claimed that allowances-in-aid of wages reduced large sections of the labouring poor to the state of pauperism that in turn undermined the possibilities for economic growth and development. A situation in which allowances-in-aid of wages were a familiar part of poor relief, and that the Speenhamland magistrates decision ‘merely systematised’ that widespread practice (Fay, 1928, p. 339), made the matter both ‘worse’ and demonstrated to the classical economists the need for urgent reform. It was the strong likelihood of the labouring host approaching the parish for such relief at some point in their lives (see Knott, 1986) which signalled to the classical economists not a high degree of ‘need’, but a wilful demoralisation of the labouring population encouraged by the allowance system itself (the seminal account is in Malthus, 1798; for discussion see Himmelfarb, 1984, ch. 4). At the end of the eighteenth century British society was undergoing the trauma of changing from a subsistence-based agrarian ‘moral economy’ in which the organising principles were custom and tradition into an industrial economy where the organising principle was that of the cash-nexus (Thompson, 1971). In the moral economy the right to relief was an important part of social tradition and feudal social relations (Novak, 1988). By the end of the eighteenth century this moral economy was being challenged by a new wave of entrepreneurs, manufacturers and financiers. They believed in an industrial-capitalist political economy which, in contrast to emphasising paternalism and obligations of communities to their poor people, condemned existing poor relief

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provision as ‘promoting idleness, improvidence and degradation’ (Neuman, 1972, p. 31). The academic classical political economist Adam Smith articulated their views. The relief of the working poor by farmers and landowners was seen as inhibiting wealth creation, for it was held to be the responsibility of each labourer to guarantee their family’s subsistence through work (Smith, 1869). His The Wealth of Nations, first published in 1776, was used by other political economists such as Jeremy Bentham and Thomas Malthus to criticise contemporary poor relief as being a barrier to the formation of a market economy. Moving beyond Smith, they argued persuasively that allowances-in-aid of wages – Speenhamland – eroded the need to work by removing the threat of starvation and distress.

Speenhamland, political economy and the capture of the ‘natural’ Himmelfarb (1984) observes that those classical political economists interpreting the work of Adam Smith managed to reinvent it as a natural science: a ‘natural economics’. She is apparently commenting on the ways in which political economists, particularly Thomas Malthus and Jeremy Bentham, argued that allowances-in-aid of wages undermined the natural state or law: Malthus’ main argument was that Speenhamland-style relief distorted the ‘natural “laws”’ of population growth (Malthus, 1798). Bentham’s belief was that poverty was ‘natural’. The relief of poverty, therefore, was seen as being an ‘unnatural’ subversion of a spontaneously developing market. Following the general ideas of Adam Smith (1869), it was thought in the early nineteenth century that an ‘organically’ developing labour market, free from parish interventions, would provide subsistence-level employment for all those who required or desired it. Discussions of poor relief were dominated by the view that independent wage labour was the key to wealth creation and that such labour was therefore ‘natural’ and inevitable. However, there ‘is nothing “natural” or inevitable about wage labour’ (Novak, 1988, p. 29). Wage labour is a social construction, principally of the industrial revolution. Indeed, so ‘natural’ were the newly emerging employment patterns and wage structures of the early nineteenth century that they had to be learnt by the workers and enforced by the employers in the teeth of an uncomprehending workforce who often fiercely resisted through riot and protest. Although wage labour was seen as being ‘natural’, like a newly discovered endangered

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species, it was an extremely fragile creature easily mutated through poor relief. The belief that wage labour was a ‘natural’ phenomenon had important implications for the way the classical political economists viewed and classified the labouring population. It was assumed by political economists that the labouring population could easily be segregated into those working (the independent), and those not working (the indigent). Speenhamland-style systems of relief, it was argued, had blurred those distinctions between the independent and the indigent, manifested in similar treatment of the two. Malthus (1798, p. 86), for example, argued that poor relief reduced large sections of the population to a state of pauperism by depressing real wage levels. Jeremy Bentham argued there needed to be an objective distinction between the pauper and the independent labourer (Poynter, 1969, p. 127). Allowances-in-aid of wages were held to divorce exertion and effort from financial reward. By guaranteeing a minimum income through allowances, it was assumed, an economically improper relationship between the work of the independent labourer and the pauper had emerged, with the barely veiled belief that this was also ‘immoral’. We know that just as now, poor labourers would go on and off whatever system of income support existed, depending on trade cycles and their circumstances. People classified by the overseers of the poor as ‘paupers’ were just the poorest independent labourers at another stage in their lives, rather than the different race of beings that the political economists were at pains to invent. Just like the naturalism of wage labour, those discrete beings were a construction of the political economists. For political economists labourers were ‘rational economic actors’ reacting to financial stimuli. In particular they would be discouraged from employment by poor relief and encouraged to have large families as allowances increased the more children there were in a family (Malthus, 1798, p. 67). What the political economists considered to be an economically damaging pro-natalism, others have viewed as one of the final remaining manifestations of the moral economy’s ability to assert paternalistic control.2 Allowances-in-aid of wages stood condemned of impeding the development of the free market for industrial capitalism. In particular, allowances-in-aid of wages were seen as preventing the creation of a ‘market’ in labour: they ‘prohibited the transformation of labour power into a pure commodity’ (Esping-Andersen, 1990, p. 36). The abolition of allowances-in-aid of wages would re-establish the threat of poverty and starvation leaving just the cash nexus between the man with only

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his labour to sell and the entrepreneurial capitalist. Without poor relief acting as one of the ‘strongest checks to idleness’ (Malthus, 1798, p. 89) individuals would have no choice but to work for a wage set in the labour market.3 Malthus’ (and Bentham’s) interpretations of Adam Smith dominated4 and they pervasively argued that the poor would only work if forced to do so through necessity, which helped justify the continuance of low wages. Himmelfarb (1984, p. 130) is of the opinion that the work of Malthus became more influential because it was more conducive to early capitalism as it had important lessons for labourers, employers and governments. It taught the poor that their poverty was due to naturally low wages and not the fault of their employer. It taught employers that they too had to act within the ‘natural laws’ of low wages and any attempts to interfere would have an adverse effect upon their employees. Finally, it had an important lesson for government: not to interfere with economic process as conditions of employment ‘and all other economic factors should be determined by the free market’ (ibid.). Nowhere is it more clear that the political economists were arguing for the lowest wages and the least government intervention than in Bentham’s arguments for ‘less eligibility’ which infested the thinking of the Poor Law Commissioners in the 1830s and the whole of subsequent British social policy. In his obsessive utilitarianism, Bentham, acolyte of Smith, could see only one reason for seeking employment – the threat of poverty. He distinguished between poverty and indigence: Poverty is the state of everyone who, in order to obtain subsistence, is forced to have recourse to labour. Indigence is the state of him, who, being destitute of property is at the same time either unable to labour, or unable to, even for labour to procure the supply of which he happens thus to be in want. (original emphasis, Bentham, 1796, quoted in Poynter, 1969, p. 119) The relief of poverty, Bentham argued, destroyed the basis of wealth creation by abolishing the necessity to labour (Knott, 1986, p. 45). It was indigence – the inability to meet subsistence – that Bentham argued should be relieved in ‘industry houses’ at a level just above starvation (ibid.). In other words, Bentham believed that paupers should be relieved at a level below that of the poorest labourer who

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worked in the free market (Beales, 1962, p. 181). That is the principle of less eligibility: If the condition of persons maintained without property by the labour of others were rendered more eligible, than that of persons maintained by their own labour then, in proportion as the existence of this state of things were ascertained individuals destitute of property would be continually withdrawing themselves from the class of the persons maintained by their own labour, to the class of persons maintained by the labour of others: and the sort of idleness, which at present is more or less confined to persons of independent fortune, would thus extend itself sooner or later to every individual … till at last there would be nobody left to labour at all for anybody. (original emphasis, Bentham quoted in Poynter, 1969, pp. 125–6) Thus any allowances paid as parish relief threatened the principle of less eligibility by encouraging dependency upon them: what came to be called ‘pauperism’. Having dominated critical debate within political economy, Benthamites triumphed in Britain’s first throughgoing implementation of Utilitarian social policy.

1834: political economy and the Poor Law Commission Report The shortcomings of the Poor Law induced a strong abolitionist case which wished to replace the Poor Law entirely. This opinion reached its high point with the report of a Select Committee in 1817. From about 1820 the abolitionist case was gradually eroded in the search for a compromise solution which would rid the Poor Law of its defects but would stop short of abolition. The Poor Law Amendment Act was the product of this search. (Fraser, 1973, p. 38) Fraser’s opinion is that the Poor Law Amendment Act was a negotiated solution to the perceived problems of the ‘old’ styles of poor relief. While the work of some commentators like Malthus and lesser-known people such as the Reverend Joseph Townsend argued for the complete abolition of relief, their influence was not absolute, for the 1834 Poor Law Commission Report did not recommend the abolition of relief, but a reorientation along the principles of less eligibility. Arguably that was due to the influence of Benthamites in the Poor Law Commission.

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The Commission had nine members, but it was dominated by two. Edwin Chadwick, was a former secretary to Jeremy Bentham, while Nassau Senior, ‘one of the leading laissez-faire economists’ (Fraser, 1973, p. 41) was well-known for his hostility towards allowances-in-aid of wages (Wood, 1991, p. 60). Despite Jones’ (1994, p. 14) claim that the Commission’s investigation on poor relief ‘was, by any standard, a remarkable exercise’, economic historians now consider the Poor Law Report to be a seriously flawed document, reflecting contemporary political economy discourses on poor relief, rather than offering an objective analysis of empirical data (for a thorough discussion of the issues see Checkland and Checkland’s introduction to the 1974 reprint of the report). The Commissioners divided their criticism of allowances-in-aid of wages into their alleged destructive effects upon labourers and employers. Poor relief and service users A system which aims its allurements at all the weakest parts of our nature – which offers marriage to the young, security to the anxious, ease to the lazy, and impunity to the profligate. (Checkland and Checkland, 1974, p. 135) The Commissioners would like us to think the real problem of the old Poor Laws was that the allowance system had encouraged a moral degeneracy and lack of respect for authority which peaked in the Captain Swing riots of 1830–1. We are told how the allowance system had eroded individual moral responsibility, for it had ‘repealed that law of nature by which the effects of each man’s [sic] improvidence or misconduct are borne by himself and his family [such that] idleness, improvidence, or extravagance occasion no loss [whilst] diligence and economy can afford no gain’ (ibid., p. 156). Using the Enlightenment rationality of Utilitarianism’s individualistic crude pleasure–pain calculus, pauperism should rightly be ‘punishment’ for idleness. The allowance system was destroying this natural logic, and thus any possibility of distinguishing between the independent labourer and the pauper. The thrift and diligence of the independent labourer was becoming indistinguishable from the improvidence and idleness of the indolent indigent. The economy, the whole of society, was in danger because, unchecked, the idleness and improvidence of the pauper would spread to the independent labourer as, economically at least, such labourers had nothing to lose by becoming indolent (ibid., pp. 107–8). The Commissioners seem to suggest that there is a behavioural relationship between the service and its users. Allowances-in-aid of wages

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is a system which creates, causes or potentiates the effects they describe thus making poor labourers into paupers, but there is still an irredeemable residuum of people who are genuinely idle, born to it paupers.5 If one believes the latter it is of obvious moral importance to break the linkage with a system which can generate the former. Non-subsidised employment was the solution to the feared moral degeneracy of the labourer. Following the Utilitarian calculus, where ‘subsistence does not depend on [the labourer’s] exertions, he loses all that sweetens labour, its association with reward’ (Checkland and Checkland, 1974, p. 167). Independent employment was central to the moral wellbeing of the labourer and his family because it was the reward for those homely virtues of honesty, diligence and effort so dear to the hearts and minds of the political economists. Independent employment ensured the civility of the labouring classes. To ensure the reader gets the point, Commissioner on mission Edwin Chadwick claimed to observe, somewhat in contradiction to other sections of the Report, that ‘in every district he found the condition of the independent labourer strikingly distinguishable from that of the pauper, and superior to it, though the independent labourers were commonly maintained on less money’ (ibid., p. 169). Poor relief was problematic, not just because of its effects on the current cohort of recipients, but also because of the effects it would have in future years. Poor relief was seen as spiralling upwards in both cost and the number of people reliant upon it: it had, in the words of the Commission a ‘progressiveness of burden’ (ibid., pp. 128–31). Hence, it was believed that parish dependency would be transmitted to following generations: Those parents who are thoroughly degraded and demoralized by the effects of ‘allowance’, not only take no means to train up their children to habits of industry, but do their utmost to prevent their employment. (ibid., p. 130) The allowance system made pauperism the wilful and rational choice for today’s labourers and stood accused of encouraging future pauperism by not providing industrious role models to the next generation of the labouring population. ‘Worse’ was to be revealed: the allowance system encouraged a breakdown of family ties and dependence: in all ranks of society the great sources of happiness and virtue are the domestic affections, and this is particularly the case among

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those who have so few resources as the labouring classes. Now pauperism seems to be an engine for the purposes of disconnecting each members of a family from all the others; of reducing all to the state of domesticated animals, fed, lodged and provided for by the parish, without mutual dependence or mutual interest. (ibid., p. 177) Given such assumptions about familial bliss and the caring role it was hardly surprising that the Commissioners should fulminate against ‘bastardy’, though being political economists they managed to swaddle morality in illegitimate profit. Whatever is received from the man [the father] is paid over by the parish to the woman, and in almost every case the parish pays to the woman the sum, whatever it may be, that has been charged on the man, whether paid by him or not … In most cases the sum is as great, in many it is greater, than that for which a child can be put out to nurse, or that which will be allowed by the parish if it were legitimate and its father dead. To the woman, therefore, a single illegitimate child is seldom any expense, and two or three are a source of positive profit. (ibid., p. 261) Although those criticisms are not about the allowance-in-aid of wages system as such, but rather that part of the Poor Laws dealing with ‘bastardy’, the moral theme is similar. Without any apparent deterrence and still able to live in their own homes, otherwise destitute women – specifically in this case – were being encouraged to have children through the reward of out-door parish relief. As if a financial reward alone were not enough to encourage ‘bastardy’, granting relief to lone mothers imputed a respectability to bearing ‘bastard’ children. The Commissioners’ recommendations on this subject would render having ‘bastard’ children ‘both burthensome and disgraceful’, so that it became ‘as rare as it is among those classes in this country who are above parish relief’ (ibid., p. 482). Effects upon employers We have seen how the Utilitarian pain–pleasure calculus adopted by the Commissioners led them to argue that allowances-in-aid of wages encouraged pauperisation. The rationality labourers were said to have displayed was extended to employers. The Commissioners believed

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that the employers were deliberately reducing their wages in the knowledge that the parish would make up the difference: The employers of paupers are attached to a system which enables them to dismiss and resume their labourers according to their daily or even hourly want of them, to reduce wages to a minimum, or even below a minimum of what will support an unmarried man, and to throw upon others the payment of a part, frequently of the greater part, and sometimes almost the whole of the wages actually received by the labourers. (Checkland and Checkland, 1974, p. 135) It is curious that the nineteeth-century Commissioners denounced a flexibility in employment practices which our neo-liberals now applaud. They had what we might now see as a moral rather than an economic objection to the use of the public money for employers’ own commercial advantage which should have been relieving ‘genuine’ distress. The implication was that the allowance system was subverting the ‘natural’ state of employment which, on first reading, would seem to be full-time and permanent rather than responding to the commercial daily or hourly needs for labour. Another way of looking at this is that the Commissioners saw allowances-in-aid of wages as a way of actually exploiting the hourly and daily needs for labour which regular employment did not, thus giving an ‘unnatural’ advantage to the employer who could do that. The allowance system could be said to have introduced ‘distortions’ to employment patterns. That kind of flexibility was undesirable. Economic growth flowing from a free-market economy would ‘naturally’ produce patterns of full-time employment. The Commissioners were also clearly claiming that allowances were reducing wages below market levels. Their contemporary political economists argued that it was the market which should be left to set a wage capable of meeting the subsistence of the labouring population while also absorbing unemployment. Not only should that happen on what they believed were economic grounds, but at the same time the unfettered market would provide labourers with employment at a rate of pay high enough to meet their subsistence needs. The view of the Commissioners that allowances-in-aid of wages were reducing wage levels is now contested. Blaug, for example, argues that low wages were a cause, rather than a result, of allowance payments, but by narrowly focusing upon the symptom, the allowance system, as if it were the ‘cause’ of the increasing demand for poor relief, other

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determinants could be ignored (Blaug, 1964, p. 242). This had the beneficial effect of identifying the culprit as something both biddable and politically powerless. Who at that stage was going to suggest agrarian reform of the Corn Laws, for example? If only the Poor Laws were amended – allowances scrapped, deterrent workhouses introduced – then it would be seen how each individual labourer, previously pauperised, could be free to compete equally in the competitive market for work and wages: New life, new energy is infused into the constitution of the pauper; he is aroused like one from sleep, his relation with all his neighbours, high and low is changed; he surveys his former employers with new eyes. He begs a job – he will not take a denial – he discovers that every one wants something to be done. He desires to make up this man’s hedges, to clear out another man’s ditches, to grub stumps out of hedgerows for a third; nothing can escape his eye, and he is ready to turn his hand to anything. (Checkland and Checkland, 1974, p. 358)

Implementing what is natural As a way of regarding people, the philosophy of the poor law is deeply embedded in the structure of English society. (Titmuss, 1954) There are obvious similarities between the political economists of the early nineteenth century and analysts of the Thatcherite period in their pronouncements upon the state of the poor. Observations on the ideological continuities between epochs should be tempered by stressing how dissimilar in terms of civil and political rights, technology, economics and social norms we are from those times. To compare social policies across the centuries, across the millennium, seems as ridiculous as those journalists who gleefully pointed out how the Conservatives in the 1997 general election had never been so unpopular since the great reform election of 1832. Ironically ridiculous, when we reflect that Lord John Russell’s Whigs were swept into power at that election on a tide of belief in Utilitarian political economy which made the implementation of the Poor Law Commissioners’ Report a racing certainty for 1834. The Report and its implementation through the Poor Law Amendment Act was the first defining moment of capitalist social welfare. Not until Beveridge and the 1945 Labour administration

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do we find another. The 1832–4 Report and Act were a settlement worked out by organised capital, the political economy ‘Manchester Men’ and imposed by force. They were teaching people how to understand low wages, labour, thrift, ‘the family’ of the industrial age and how to regard those people who did not measure up. We inherit from those founding fathers a notion of income maintenance built around its possible impact on low wages which has disconnected economy from morality and attached it to ‘natural’. Whatever happens to us is ‘natural’ in the new political economy’s conception of capitalism. The people who are affected by it must take moral responsibility for what they do in the gale of socio-economic changes. The poorest people, be they independent labourers or paupers, are pitched at market – in competition with each other for either the lowest entry level wages or the deterrent workhouse test of less eligibility. For more than thirteen decades any attempt to suggest that the condition of poor workers and their children could be improved by a state wagesubsidy crumpled before the accusation of ‘Speenhamland’. Campaigns for children allowances faltered over it (see Chapter 7); it deformed debates on the problem of low pay. And yet it was in seeking an alternative to increasing family allowances that prompted Britain’s second attempt at in-work benefits.

A spectre haunts in-work benefits: Family Income Supplement Sir Keith Joseph was Margaret Thatcher’s economic mentor. He had a Damascene Road conversion to monetarist neo-liberal economics in the 1970s. It came only after he had already been responsible for one of the most radical policy departures from the principles of classical economics ever: subsidising free market wages. It was Sir Keith who brought into being Family Income Supplement (FIS) as a ‘temporary’ measure during the first months of Heath’s administration in 1970. In 1968 a means-tested in-work benefit had been prepared by senior civil servants and discussed in the Wilson Cabinet. It was to have been an alternative to increasing family allowances (of which the Treasury disapproved) and ‘clawing’ the benefit back through taxation from high earners. The point being that the new benefit would be targeted on the poorest working families with children, and be relatively inexpensive without disturbing the finances of ‘normal’ tax-payers (Vincent, 1991, pp. 164–6). Joseph had a ready-made solution to the poverty lobby’s clamour for increased family allowances with ‘claw-back’ which was

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seen by both Labour and Conservative Parties as electoral poison (it was expensive, yet would not reach poor families with one child). There was agreement that the poorest wage-earners with children had to be assisted, but Joseph was cast as a villain recreating the economic and social abomination of Speenhamland. So fearsome to traditional policists was the spectre of Speenhamland that he had to exorcise it from the government’s proposal for FIS in his speech during the second reading debate, 136 years after Speenhamland’s ‘official’ demise, by pointing out how the world had changed – there were trade unions now! In any case, FIS would not affect very many workers, whereas Joseph opined, ‘Speenhamland came to affect the majority of rural workers … The contrast with this Bill is startling. It will bring help to well under 1 per cent of working households … ’ (Hansard, 1970, col. 225; for discussion see Barker, 1971). FIS was indeed a small measure in terms of either expenditure (£8 million), eligible claimants (160 000 families) or its initial impact on the poverty of working families (take-up an appalling 48 per cent) (see Brown, 1983). FIS paid half the difference between a set amount and the worker’s wage, and then withdrew benefit at the rate of 50p for every £1 earned. The effect was to create a ‘poverty trap’ wherein ‘for millions of low paid workers very substantial pay increases have the absurd effect of increasing only marginally their family’s net income and in some cases actually make the family worse off’ (Field and Piachaud, 1971 quoted in Timmins, 1996, p. 284). Those revelations about low take-up and the poverty trap were for the future but Enoch Powell (Con.), parliament’s Cassandra of the time, had a more principled objection when he portentously claimed during the second reading debate on the FIS bill: The reformers in the 1830s were hard, harsh and, it seems to us, unimaginative men, who were called upon to end the system which had grown from its first beginnings in 1795. But at least they re-established a principle, a principle from which the bill decisively departs. It is the principle that it is an act of fateful consequence to pay relief – cash supplementation of income – to persons in full time employment; that it is something which is bound profoundly to distort the wage system and to frustrate the ambition – which seems to me to be almost indissoluble from the idea of a free society – that a man should receive as near as may be the full value of his work in cash. Sooner or later, and I fear it may be later, we shall have to return to that principle. (Hansard, 1970, cols 264–5)

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For Powell, FIS would so undermine the wage-relation of the free market, eventually the principle of ‘less eligibility’ would have to be reinstated. He went on to predict: ‘We shall no doubt give the Bill a Second Reading tonight, but many of those who vote for it or let it go through will live to regret what we have done’ (ibid., col. 265). His doom and gloom now seems more like the whinging of an Eeyore rather than tragedy on a Greek scale because although ‘great principles’ were being abandoned, they had proved unhelpful in the economic changes being faced. Other devices for alleviating family poverty, such as raising family allowances, were unacceptable to that Tory government – hence FIS, a small, temporary measure of assistance to the working poor. The government of the day were obviously aware of the Speenhamland spectre, but were clearly undeterred by either the cautionary tales from the social administration traditionalists or the rump of their own liberal economists ( Jordan, 1973, ch. 1). It is hard to say of FIS that it marked a watershed; it was such a small measure, ushered in against a tidal wave of criticism from poverty campaigners and academics, but it was the true antecedent of Family Credit (Timmins, 1996, pp. 282–5). Joseph’s in-work benefit became the economic regulatory instrument of choice against low wages for the working poor in the new fragmented, global market of late capitalism which enables government to repitch undervalued labour at entry level wages – employment ready or not. The Jordan argument is in fact worthy of discussion because he has attacked the subsidising of low wages in a Speenhamland style over three decades. Indeed we have to thank Jordan for pointing out that it was those social administration doyens and rediscoverers of British poverty, Abel-Smith and Townsend, who actually concluded that ‘part of the problem [of child poverty] could be dealt with at relatively low cost by allowing national assistance to be drawn despite the fact that the breadwinner is receiving full-time earnings’ adding by way of empirical justification that in-work benefits were being paid in many US states (from Abel-Smith and Townsend, 1965, p. 65, quoted in Jordan, 1973, p. 7). Jordan claims that the Heath administration merely took over and operationalised this US invention which already carried a certain academic seal of approval. Jordan might have been reading from the speeches of Enoch Powell when concluding ‘they introduced a measure [FIS] which in years to come may well be seen as one of the turning points in British political history’ (ibid.). His main objection to FIS is that rather than deal with the problem of low wages, the low wage-earner is seen as the problem: the latter group will be ‘state paupers’ ( Jordan, 1973, p. 8).

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Jordan believes that the government’s determination to join the European Economic Community underlay the reason for proposing the in-work benefit FIS. Business could make large profits from joining the EEC, but many of their workers would be worse off. Just as the late eighteenth-century landowners made money out of food scarcity, but could not actually allow the general starvation of the labouring class, nor could late-capitalists of the 1970s, for fear of disorder, allow wages to fall too far. As the Webbs and the Hammonds had explained, the ‘Speenhamland System’ saved labouring families from starvation at the cost of sapping their spirit and disarming their independence (Webb and Webb, 1963 ed., p. 423; Hammond and Hammond, 1948 ed., p. 166). In accepting that interpretation Jordan hints at the possibility of the ‘Speenhamland System’ as a social mode of economic regulation that will reproduce the pauper host of the early nineteenth century in the closing decades of the twentieth. Nearly thirty years of in-work benefits have not led in any discernibly direct sense to the riotous disorder and abject misery promised by Jordan, or indeed by Powell. However, as we catalogue and argue in the rest of this book, unemployment rose in a distinctly patterned manner, entry wages have fallen and the lowest paid workers are continuously churned between in-work benefits and out-of-work benefits. As the groups of people who are made unemployed and are pitched at entry wages remain the same, one might have thought organised opposition would occur. In any generalised sense the service users concerned do not seem to see the linkage. Both young adult workers and lone parent workers may see their circumstances as a phase – an episode they are going through – and hence although analysts treat them as demographic groups or even subsets of social divisions, there is no alliance of characteristics which could underpin a movement of such poor people. In Jordan’s terms the ‘divide and rule principle’ of British government is even more effective than he supposed. Jordan fails to explain convincingly how ordinary claimants are to overcome the divisions built into the social protection system. It is riven and purposely so, as Jordan himself is at pains to point out. Marx had predicted such a development as a necessary entailment of capitalist accumulation: ‘Pauperism forms a condition of capitalist production, and of the capitalist development of wealth. It forms part of the incidental expenses of capitalist production: but capital usually knows how to transfer these from its own shoulders to those of the working class and the petty bourgeoisie’ (Marx, 1976, p. 797). Britain’s emerging working class would not all be pauperised; rather a ‘lowest sediment’ of

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society would be continually placed in the space between destitution and the lowest wages. Political economy neatly employs social administration to develop welfare measures to provide an acceptable lowest level and then characterise it as ‘dependency’. The truly massive advance in neo-liberal economic thinking was to realise that such measures can penetrate the free market of wages without actually bringing the accumulation regime crashing down. Jordan concludes that the ‘wage subsidisation’ of FIS will produce a class of paupers for whom: ‘In work or out of it, in sickness or health, in youth or old age, he is simply a state pauper, unable to earn enough to feed his family, dependent on subsidisation for his bare existence’ and ‘Once work no longer confers the benefits of an independent status … then work becomes sheer slavery’ ( Jordan, 1973, pp. 17–18). We have shown that the social mode of economic regulation can fashion a sophisticated instrument which does not produce the crude pauperising effect actually experienced by tens of thousands of labourers under early capitalism and envisaged by some as the lot for hundreds of thousands of workers now. This does not, of course, mean that some of the characterisations of the effects of FIS made by Jordan have proved untrue, just over-drawn. For structural reasons several groups are corralled on to in-work benefit and are what Tories have taught us to call ‘dependent’, but the current divisive way in which living on such benefits is presented maintains a real distinction between this group and those claiming out-of-work benefits. As we demonstrate, that distinction is a worthwhile one for the government to promote because the purpose and regulatory force of in-work benefits is far more economically complex than the classical economists imagined. It has been Jordan’s consistent thesis that successive Conservative administrations have divided ‘the community’ into ‘one ruled by the incentives of vigorous competition and rich rewards for merit’ and another group ‘dependent, passive and subsidised’ ( Jordan, 1974, p. 48). By introducing FIS, Conservatives demonstrated their deep contempt for the poor because it was no more than ‘income maintenance for the socially inferior at an inferior level’ (ibid.). Jordan is convinced that the subsidisation of wages pauperises the labouring poor, and, obviously, to support that view he cites at length the Poor Law Commissioners of 1832 in their denunciation of Speenhamland ( Jordan, 1974, pp. 49–50). Pauperisation is essentially enforced dependency and hence it seems for Jordan an easy next step to characterise in-work benefits as ‘slavery’.6 Towards the end of the last century Jordan characterised Speenhamland as ‘compulsory work for benefits (“workfare”)’ ( Jordan,

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1996, p. 6) and ‘forced labour’ ( Jordan, 1998, p. 61). He points out its part in the non-democratic tradition of assistance which he claims led directly to modern manifestations of selectivity, including in-work benefits. For Jordan the basic problem of low wages today is analogous to the situation addressed by the magistrates in Berkshire two centuries previously: wages are insufficient to deliver the standard of living appropriate for ordinary life in certain social epochs. He uses data on social security to try to show that ‘neither skills nor property rights give assets that can provide basic autonomy for the majority of the population during their working age or in retirement’ ( Jordan, 1998, pp. 172–3). For Jordan, it is the subsidisation of low wages today which enables workers to enter the formal economy just as it was Speenhamland which kept pauperised labourers in ‘slavery’. Such a characterisation might suggest that each time there is a similar wages crisis, the state responds with in-work benefits, yet this is very hard to sustain historically. A further problem with Jordan’s position is the conclusion he draws about the attitude of the working poor – to each other, where: ‘Even families of households with two or more low incomes reckon that they do better under the present system (if not in income then in status and access to other welfare-enhancing resources), and resent the taxes they pay to support claimants, rather than supporting an egalitarian redistribution’ ( Jordan, 1998, p. 174). Jordan might be right in suggesting that poor workers have a ‘misguided’ perception of what social security is all about, but why should poorer workers be any more inclined to believe in egalitarianism than the rich? Further, Jordan fails to address the economic reasons why today’s economists in the classical tradition should favour wage subsidisation when their forefathers, as he repeats in all his texts touching on this subject, damned it to hell-fire. Does anyone else in academic social policy follow the Jordan approach? In considering the abolition of FIS and its replacement with Family Credit, Alcock does not mention the spectre of Speenhamland (Alcock, 1987, pp. 103–5). He considers both FIS and FC to be administrative devices to address the contradictory problems of the needs of poor working families, whilst increasing work incentives, and as a step on the road towards the introduction of an integrated tax and benefit system: ‘tax credits’ (and see Alcock, 1999, p. 62 for more on links between Labour and Conservative thinking on the first in-work benefit and the genesis of ‘tax credits’). Page and Silburn (1998, p. 208) seem to think the Conservatives were deliberately targeting the ‘new benefit support [FIS] at particular groups not adequately covered by past social

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security protection’. Sir Keith Joseph would agree. With ‘new Labour’s’ social security millennium triumph of Working Family Tax Credit those Treasury agenda items are within sight of achievement after about 30 years. McKay and Rowlingson (1999, pp. 64–5) state that FIS was introduced to ‘top-up’ the earnings of workers with children, although as there was no notion of a minimum income standard it is difficult to understand what ‘topping-up’ means in this context. However, they do allude to the introduction of Speenhamland in 1795, by claiming tamely that in 1971 ‘similar criticisms were made about how the benefit was merely supporting low-paying employers’. The wide-ranging critique by Benthamite Utilitarians blew away Speenhamland with one legislative breath in the 1830s: whereas its gradual introduction by one bench of magistrates after another had passed in relative obscurity until the economic slump following the Napoleonic wars. Family Income Supplement led directly to Family Credit. McKay and Rowlingson note that the growth of FC ‘is one of the most significant changes in social security policy over the late 1980s and 90s. It has changed the benefits landscape from one in which employment usually meant that few benefits were claimed, to one in which benefits play a key role in sustaining people in low-paid jobs’ (McKay and Rowlingson, 1999, p. 112). Presumably the same set of arguments surrounding FIS should apply to FC and yet in a style which distances the authors from the critique, they can only claim that it ‘has become a victim of its own success’ (ibid.): it costs a lot more money and more people claim it than FIS. This would be proof of the very dependency and abandonment of principle which so excites Jordan against in-work benefits. Alcock has characterised Speenhamland as an ‘indiscriminate and costly form of support for the poor … [which] … did not contain direct disciplinary measures of control or encouragement of self-support’ (Alcock, 1993, p. 11). Unlike Jordan’s interpretation, Alcock does not mention whether he views either FIS or FC to be in that line of descent, but only draws attention to the effect of the poverty trap caused by in-work benefits (Alcock, 1993, pp. 232–3). Jordan has recognised a similarity between Speenhamland and today’s in-work benefits which the other commentators just ignore, presumably because the principle has ceased to be important or because the more sophisticated bureaucracy, the more sympathetic treatment of claimants and accurate targeting compensate for the abandonment of principle. In a sharply perceptive and informative chapter on ‘The Aims of Social Security’, Sainsbury concludes that the combination of ‘New

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Right ideology’ and administrative knowledge about the negative effects of the benefit system brokered ‘a new role for social security– getting people into work, and helping them stay there’ (Sainsbury, 1999, p. 43). FC is seen as the model from which other incentive-to-work benefits were developed. The spectre of Speenhamland is exorcised completely from this account which correctly identifies such developments as ‘a marked shift in the aims of social security’ (ibid.). Once again changing the behaviour of the poor has a central place in the objectives of social security, as it had for the Benthamite Utilitarians, but now the former disease of allowances-in-aid of wages has become the cure. Jordan has allies who like him view the current development of social security as ‘the pauperisation of labour’ ( Jones and Novak, 1999, pp. 198–9). Jones and Novak quote from the 1834 Poor Law Report on how ‘the old and infirm are sold at the monthly meeting to the best bidder; at Yardley, Hastings, all the unemployed are put up to sale weekly’. Employers will only take on subsidised labour and wages in general are depressed. The labourers themselves ‘are becoming not merely idle and ignorant and dishonest, but positively hostile’ (ibid., quoting from Checkland and Checkland, 1974, pp. 103 and 145). These quotations from the 1830s are supposed to strike a chord for today. The reader is to infer that the new deals, the work-welfare benefits, are a dark, late-capitalist reconstruction of the evils of Speenhamland in which ‘the government has set itself on a collision course’ with pauperised labour (ibid.). Activists in the welfare rights movement have been keen to make such a case on behalf of claimants: By making low paid jobs more attractive to unemployed claimants, the WFTC may enable employers to recruit to jobs with low wages, thus creating new jobs, but at the cost of reducing average levels of pay in the occupations concerned. Indeed, by subsidising lowpaying employers in the present economic climate, we could see a ‘Speenhamland effect’ (named after the wage-subsidy system that developed in the Berkshire town in 1795). A government wagesubsidy clearly provides no incentive for employers to raise wages, and may even lead them to depress them to the level of the minimum wage (itself pitiful)! (Brighton Against Benefit Cuts, 2000) Social policists such as Jordan, Novak and Jones propound the social and moral case against in-work benefits, using the historicism of the Speenhamland system’s detractors. As we shall be arguing in the next

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section, Brighton Against Benefit Cuts are nearer to the use of ‘Speenhamland’ which has been adopted by some economists as a way of characterising the economic effect which subsidised wages could have on unsubsidised wages, whatever the social and moral implications might be.

‘New Labour’ and the national minimum wage It has been a curiosity of these debates that the academics most critical of the present social security project, pray-in-aid Benthamite Utilitarians who rubbished England’s last attempt at an older, moral economy in order to put in its place the mechanised modernity of less eligibility through the deterrence workhouse system. The other curiosity is that supporters of the current project, from the coolly objective to those well on message, also seem to believe the Speenhamland tale as told by Chadwick, which if true, should be a dire warning – to themselves! We shall extend this discussion to show how current usage presents ‘Speenhamland’ as a technical, economic term. An influential report commissioned when John Smith was leader of the Labour Party which has informed the current ‘new Labour’ project makes the new case with disarming clarity, whilst simultaneously falling for the social policy historicism: We must allow people to combine partial benefits with low and/or part-time earnings and, in some cases, subsidise low wages either directly or through Family Credit. But if that is done in the absence of a minimum wage, employers will have an immediate incentive to drop wages lower and lower, relying on the taxpayer to make up the difference. In the nineteenth-century ‘Speenhamland’ system of outdoor relief, it was precisely this problem that took local parishes into bankruptcy. (Borrie, 1994, p. 201) The ‘new Labour’ manifesto commitment to a National Minimum Wage is there being given a supporting role to in-work benefits in order to avoid the supposed bad effects of a haphazard local government policy developed two centuries previously, the alleged bad effects of which were not actually happening even after 25 years of FIS and then the more specifically focused and high-profile FC. However, perhaps some ‘new Labour’-supporting economists knew better about the effect of in-work benefit on allowing employers to force down wages and so took Speenhamland as a genuine warning from history. Professor

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Richard Layard who was a member of the Institute for Public Policy Research’s (a ‘new Labour’ think-tank) Commission on Public Policy and British Business, set up by Tony Blair in 1996, wrote: There are three powerful reasons for having a minimum wage. First, it prevents the sense of unfairness which goes with excessively low pay. Second, people rightly prefer to earn their income rather than having it topped up by a hand-out. Third, a minimum wage protects the state against the risk that employers will deliberately cut wages, knowing the state will pick up the difference. This was what happened in the early 1800s under the infamous Speenhamland System, and there are signs that it is starting up again in Britain as a result of present in-work benefits. (Layard, 1997b, p. 68) We have commented on the influence which Layard has had both on the previous Conservative administration’s economic and social policies, and on ‘new Labour’s’ (Grover and Stewart, 2000). For his services to British public and political life he is now Lord Layard. Once again it would seem that the spectre of a really existing Speenhamland system is prayed-in-aid of a policy argument. Layard further claims that inwork benefits will still be regarded as a dependency welfare payment, because – we would argue – that is what people have learnt to believe they are. The two positions have a common core in their support for a National Minimum Wage. The first views the NMW as supportive of in-work benefit which Borrie characterises as essential. The second foregrounds the NMW, characterising in-work benefit as little more than Speenhamland. Both justify the NMW on the grounds that it will prevent Speenhamland-type abuses around the setting of free-market wages at entry levels. What is to prevent employers from responding to the National Minimum Wage by seeking always to limit some earners to that level, and via corporate negotiation seeking to influence the level of the NMW itself? The raft of in-work benefits might prove a more complex target in that regard, though it could be that employers will stereotype certain workers as ‘WFTC claimants’ and either seek them out, or avoid them depending on their business, and trade conditions. If organised capital can keep the NMW at least as low as their lowest desired entry wage, they have done their duty by the free market, but the state will still be left, in the case of workers with children, to pick up the cost of low wages. If all employers’ workers are uniformly

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eligible for the in-work benefit(s), the principles of free market wages are not vitiated. Of course they are not uniformly eligible to WFTC nor uniformly protected by the NMW, hence the supposed and predicted Speenhamland-type effects may indeed occur, though whether it was a template or is just a metaphor is another issue. Borrie and Layard’s economic arguments have wide-ranging support. It is a well-established truism that most of the social and economic policy developments of the Thatcher period originated in the USA, although there has been a federal minimum wage7 since 1938 and earned income tax credit (EITC) was introduced in 1975, which the ultra right-wing President Reagan expanded upon as ‘the best antipoverty, the best pro-family, the best job creation measure to come out of the Congress’ (quoted in Bluestone and Ghilarducci, 1996, p. 6). In a review of both the US minimum wage and earned income tax credit, Bluestone and Ghilarducci argue the two are complementary, for whilst the former has ‘poor target efficiency’, the latter’s efficiency is much superior: The minimum wage does not generate jobs and may displace some; the tax credit has no job displacement effect and might encourage some firms to expand employment. On the other hand, the minimum wage is much superior to the EITC when it comes to taxpayer cost, aiding unrelated individuals and childless families, and countering the Speenhamland and adverse productivity effects … Combined, then, the minimum wage and the EITC give us the best of both worlds – target efficiency for attacking wage poverty at reasonable public cost. Clearly, the combination of minimumwage regulations and the EITC makes for good antipoverty policy. (Bluestone and Ghilarducci, 1996, pp. 10–11) There emerges a consistent argument for both forms of intervention in entry level wages. The lurid accounts of the Commissioners digested by social policists are not important: capital accumulation would not be significantly undermined by this combo of regulation – whereas the common human needs expressed initially in the context of this debate by Whitbread and Pitt would be effectively relieved. What is this ‘Speenhamland effect’ of which current economists write, lacking as it does full-blown reference to either the social policy tradition or the revisionism of the economic historians? In a general discussion on the genesis and solutions to Britain’s slow economic and social decline, Frank Wilkinson for the largest UK trade union representing

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public sector workers, Unison, explains the wage subsidy problem. The success of welfare-to-work-welfare schemes in reducing unemployment relies on there being excess demand for workers in secondary labour markets. If that was not the case, welfare-to-work-welfare would increase the demand for existing jobs. He then goes on to make the Speenhamland work connection: More generally, the increase in supply induced by welfare-to-work can be expected to worsen terms and conditions at the bottom end of the labour market further reducing the bargaining power of secondary sector workers. One of the real dangers of welfare-to-work is that the downward pressure on wages and conditions will become cumulative as subsidised wages come into competition with unsubsidised. This could drive down wages and drive up the cost of subsidy (the Speenhamland effect). A minimum wage could play a part in avoiding this by putting a floor to wages, but only if it is pitched at a high enough level. If, as proposed, it is set at a level so low that a substantial proportion of workers on minimum wages receive in-work benefits, the Speenhamland effect would kick in, driving earnings down to the minimum wage so that it becomes in effect the maximum wage for a large proportion of the workforce. (Wilkinson (n.d.), pp. 5–6 and see also Sachdev and Wilkinson, 1998b) The activists of Brighton Against Benefit Cuts have taken that kind of explanation to heart, presented as it is through the cases argued by Borrie, Bluestone and Ghilarducci, and Layard – in their various ways. If in-work benefits can play a role in achieving ‘a non-accelerating inflation rate of unemployment’ (NAIRU), it will only be sustained if there is a (rather high) national minimum wage. It is suggested that failure to regulate wages and benefits in that way will lead to a treadmill of higher rates of in-work benefits attracting employers to place larger numbers of workers within the eligibility criteria.

Conclusion Having digested all the debates, for the government Baroness Hollis of Heigham is able to: … rather sympathise with Speenhamland and in-work benefits. The reform of the welfare state under this Government could be said to

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Figure 6.1 Through the Single Work Focused Gateway to the Non-accelerating Inflation Rate of Unemployment!

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be revisiting the justices of Speenhamland and Berkshire in a ‘readacross’ way for the nation as a whole. (Hansard Lords, 1997, col. 1312) ‘Speenhamland’ symbolised a hotchpotch of relief systems in-aid-ofwages which varied from parish to parish. In a sense it was universal in that male labourers with children could ask for it, or indeed were forced to enter the local system in order to obtain any relief in hard times. We assume single male labourers never received Speenhamland-type relief, but the record is ambiguous and incomplete (Blaug, 1964). Women were only covered when they were without male support and/or had children conceived outside marriage. If it was organised enough to be a system, Speenhamland was both relief in-aid-of-wages for regular labourers in hard times and what we would describe as ‘classic workfare’ for habitual paupers. What Speenhamland might have caused is open to interpretation, even the stuff of myth and legend. We have shown that the historical record is capable of several interpretations, and we have also shown that the only one retailed today depicts at worst an enslaving corruption to public assistance and at best an inefficient mess. Whatever interpretation of Speenhamland-style relief one wishes to pursue, one cannot be dissuaded from the observation that as a form of relief it was reviled by classical political economists as being a barrier to economic growth through free markets. Modern liberal capitalism could not function with regulatory mechanisms that interfered with markets. Free from the fetters of parish relief, the myth was born that the market could and would deliver a subsistence income to the rural and urban labouring classes. Policy-makers have since been in an almost constant struggle with the fact that markets do not do that. Labour markets employ individuals, not families. Why then, should we expect them to deliver subsistence incomes for all classes of families? A truth which Pitt clearly understood. We return to this theme throughout the book; indeed the following chapter analyses Beveridge’s approach to this question through the other route – family allowances.

7 Family Allowances to Child Benefit: Keynesian In-Work Relief Delivered by Beveridge?

The defining moments in the history of modern British social security were Speenhamland with its allowances-in-aid of wages in the late eighteenth century; the new poor law of less eligibility and the deterrent workhouse test in the mid-1830s; the coming of universal ‘insurance’ benefits in the first decade of the twentieth century; and the massive reconstruction of the welfare state in the late 1940s which we now term the Keynes–Beveridge settlement. Since then we have merely churned the administration, the principles, the explanations, and varied the justifications depending on political ideology, economic theory and circumstances. There may be only one thing that is ‘new’ since 1948, but it constitutes a major reorientation of objectives accompanied by a quite dramatic change in style and presentation. The Work Connection has shown how today’s in-work benefits may be a rebranding of Speenhamland and may historically derive from Family Income Supplement, but they are the product-leader in the new style of social security which openly avows non-work orientated benefits to be a dead-weight on the economy. There are at least two good reasons for considering, specifically, the place of Beveridge in that reorientation. First, current developments run counter-intuitive to the principles of Beveridge and secondly that nearest milestone was so massively influential it cannot be ignored, even if it is now perceived as a millstone. The Beveridge Report (1942) itself, and the administrative enactments of the postwar Labour government, gave social security very clear objectives (see Harris, 1977, for what is still the fullest analytic account of his life and the Report). The whole adult population were to participate, because they might be subject to the contingencies which it was regarded as right to support from public funds, mainly: maternity, 148

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unemployment, sickness or disability, old age, widowhood, death. Indeed these are contingencies which take people out of the formal labour market – for a period, or altogether. People on social security were not working, in the formal economy at least, and that was to become almost the definition of social security entitlement until late Thatcherism. The whole 200-year-old development of social security can be seen as taking us from supporting poor workers, through various ways of supporting the non-working poor, to using social security as a means of getting people into formal employment. There is a sense in which it has been paid work – employment – which has driven both the conceptualisation of social security and its administration. This has given us a certain way of addressing the relief of poverty through public funds. At the broadest level of strategy and objectives, social security policy has little to do with meeting human needs and everything to do with meeting the transitory requirements of capital accumulation. That well-motivated activists of all kinds will exploit ways of actually meeting human needs from the Byzantine social security system is clearly true, but it does not imply that is what it is really there to support. The academic policists of this field, often themselves campaigners and lobbyists too, may well question our foregrounding of economic regulatory modes, pursuing as they do the social science objectification of human needs, poverty and analysis of policy initiatives in the context of their implementation.

Family allowances The economic and social policy debates around an allowance for children is of particular relevance to our project in this book, providing continuity between the epochs of social security we have identified. At the dawning of modern social security, Pitt put the question which remains a constant (discussed in Chapter 6) – the lowest wages may be insufficient to support the large numbers of children found in families; however, paying social security for children will impact on both work incentives and the lowest wage levels; and it may be pro-natalist. The administrative solution to the social security part of that problem is straightforward child additions to all benefits, but that of course did nothing for working poor families and indeed makes worse the issue of disincentives at the lowest level of wages. The far more radical solution of a universal benefit for parents who had children, suggested by Pitt in 1796, was not introduced in Britain until 1946. Family allowances were not an allowance-in-aid of wages, because payment does not

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depend on wage levels; however, any state payment to people in work must surely impact on entry level wages and feature, if only at a marginal level, as a disincentive to work: that was the orthodoxy. Thus it is unhelpful to think of family allowances as an in-work benefit as such, much in the way that housing benefit is not an in-work benefit because it is not related to employment or wages. However, any social security benefit received by the ‘normally employed’ population must have some kind of relationship to wages and employment. What distinguishes the in-work benefit is its wage subsidising capacity and hence impact on the employability of certain groups of workers. The debates and evidence on family allowances which we discuss below show how those issues were a major concern which gradually became peripheral to the role of family allowances in a strategy to reduce child poverty.

Assumption A How was Beveridge persuaded of the need for a children’s allowance? He affords it the highest prominence. It is Assumption A: first of the three great prerequisites without which there would be no Plan for Social Security in peace-time: The Plan for Social Security set out in the Report is a plan to win freedom from want by maintaining incomes. But sufficiency of income is not sufficient in itself. Freedom from want is only one of the essential freedoms of mankind … The plan proposed here involves three particular assumptions so closely related to it that brief discussion is essential for understanding of the plan itself. These are the assumptions of children’s allowances, of comprehensive health and rehabilitation services, and of maintenance of employment. (Beveridge Report, 1942, para. 409) In fact as we shall discuss at length below, Beveridge needed no persuading as he had been a campaigner for family allowances for eighteen years. Indeed he told the other members of his Committee right at the outset that: ‘No satisfactory social security scheme can be framed except on the basis of universal children’s allowances’ (Macnicol, 1980, p. 184). The Treasury, that implacable opponent of family allowances, was thus alerted to an action it would have to fight out with Beveridge at some stage.

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To support Assumption A, Beveridge has two arguments of principle. The first was a contemporary refinement of the Pitt question. Under the Beveridge Plan the state would ‘guarantee an income sufficient for subsistence, while earnings are interrupted by unemployment or disability’ (Beveridge Report, 1942, para. 411). However, it would be ‘unreasonable’ to ensure sufficient income whilst out-of-work unless the worker could also expect ‘sufficient income during earning’ (ibid.). He then makes Pitt’s argument from classical economics that ‘a national minimum for families of every size cannot in practice be secured by a wage system, which must be based on the product of a man’s labour and not on the size of his family’ (ibid.). Social surveys had demonstrated, he confidently asserted, that ‘want’ was due to ‘interruption or loss of earning power and large families’ (ibid., emphasis added). Secondly, he points to the dangers of having a benefit income which ‘exceed[s] earnings during work’ (ibid., para. 412). In order to secure the ‘greater fluidity of labour … the gap between income during earning and during interruption of earning should be as large as possible for every man’ (ibid.). Receiving less money whilst not working is a clear incentive to rejoin the formal labour market, but for men with large families, in order to maintain that healthy income gap, either they must receive inadequate benefit for their children, or be given ‘allowances for children in time of earning and not-earning alike’ (ibid.). The logic of the argument only works if one accepts Beveridge’s proposition at para. 411. Basically Beveridge accepted the empirical evidence that for workers on the lowest wages a major cause of ‘want’ was having many children rather than it being a problem inherent in freemarket wages. If there was to be equity between benefit income and work-derived income, the latter has to have a state subsidy for ‘large families’. The competition of the free market in wages rules out a subsidy from that source. The next batch of arguments for children’s allowances are a muddle of pro-natalism, eugenics and communitarianism. ‘With its present rate of reproduction, the British race cannot continue; means of reversing the recent course of the birth rate must be found’ (ibid., para. 4131). Beveridge does not suppose that children’s allowances of themselves would lead people to rear children for gain, but the payment would ensure that having more children would not damage the ‘chances of those already born’ (ibid.). A communitarian justification would seem to be behind his belief that children’s allowances would be ‘a signal of the national interest in children, setting the tone of public opinion … and [be] an acceptance of new responsibilities by the

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community’ (ibid.). One might detect a dim echo of Pitt’s ‘having enriched their country with a large number of children [such families] have a claim on its assistance for their support’ (Hansard, 1796, cols. 709–10). Beveridge seems to have believed he was pushing at an open door, asserting that ‘The general principle of children’s allowances can by now be taken as accepted’ (Beveridge Report, 1942, para. 414). A year earlier the leading poverty researcher, and himself a fervent family allowance campaigner, Seebohm Rowntree, had sounded less sanguine. Having identified child-rearing as one of the three main periods of poverty for families with low wages, he remarked: But how to remedy the poverty of children of wage-earners is a much more complicated problem. It raises the question of the level of wages, for two of the three periods of economic stress come when the family has to be maintained entirely out of the wages of the head of the family. (Seebohm Rowntree, 1941, p. 161) He goes on to state that the most frequently mentioned way of dealing with low wage poverty was to propose both a statutory minimum wage and family allowances, for as we shall see both he and Beveridge were arguing the case of Eleanor Rathbone and the Family Endowment Society. Seebohm Rowntree sets out in Poverty and Progress the massive levels of child poverty his researchers had discovered in interwar York. He demonstrates the rates of reduction in that child poverty which would be achieved by various levels of family allowance and statutory minimum wage. He indicates no other purpose or justification for either measure, save to say that the reduction of child poverty would lead to less ill-health and better physique (Seebohm Rowntree, 1941, ch. 6 especially pp. 164–71).2 Beveridge was certainly impressed by these findings and argument, but it was in his own, separately published study Full Employment that he considered child poverty in detail: Nearly half of all the persons discovered in Want by the social surveys of British cities between the wars were children under fifteen. Nearly half of all the working-class children in the country were born into Want … Want and its concentration on children between the wars represented a destruction of human capital none the less real because it did not enter into any economic calculus [he footnotes

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Seebohm Rowntree’s Poverty and Progress] … The redistribution of income that is involved in abolishing Want by Social Insurance and children’s allowances will of itself be a potent force in helping to maintain demand for the products of industry, and so in preventing unemployment. (Beveridge, 1944, pp. 255–6) Beveridge proposed that children’s allowances be provided out of the national Exchequer without contributions and at a rate of 8 shillings a week,3 though not necessarily in respect of every child. The general assumption around at the time (and certainly that of Seebohm Rowntree) was that allowances should be just 5 shillings. The allowance should be seen only as a help to parents in work because ‘relieving them entirely of financial responsibility’ would be ‘wasteful and certainly cannot be described as a measure indispensable for the abolition of poverty … The cost of maintaining children should be shared between their parents and the community’ (Beveridge Report, 1942, para. 417). Beveridge favoured no payment for the first child as a costreduction device,4 but also because there would be ‘no hardship to parents’ (ibid.). Beveridge made that judgement despite Seebohm Rowntree already having shown that if allowances of only 5 shillings were paid to families for children in excess of the first, just 46.5 per cent would be lifted out of poverty, whereas if the first child was included 72.4 per cent of families with children (in poverty on his definition) would be lifted out of poverty (Seebohm Rowntree, 1941, p. 166). Beveridge noted that to reduce children’s allowances whilst working would be a disincentive-to-work when a low wage-earning family man was on benefit income only and then received the full amount of child allowance applicable. Hence, he asserts that children’s allowances should vary in amount depending on children’s ages and upon the amount of benefits in kind which the state might be providing. However, cash allowances should not be replaced entirely by benefits in kind because: ‘The principle of social policy should not be to remove all responsibilities from parents, but to help them to understand and to meet their responsibilities’ (Beveridge Report, 1942, para. 421). Patronising to low-income parents as this may sound some 60 years later it does, however, seem rather base to also accuse Beveridge of not paying heed to how social policy could influence individual behaviour. We have noted how the Conservatives and ‘underclass’ theorists have

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disparaged the Beveridge tradition as if no regard were paid to personal motivation or intentions. If there is any substance in that view it certainly does not come from the words of his own report. Beveridge believed that children’s allowances should be paid irrespective of parents’ income because: Little money can be saved [by the Treasury] by any reasonable income limit. In so far as it appears that children’s allowances to all families irrespective of their means would mean giving money to prosperous people without need, this can be corrected by an adjustment of the rebates of income tax now allowed for children. (Beveridge Report, 1942, para. 422) Because Beveridge explains the proposed universalism of child allowances in fiscal terms alone, one can find little direct support here for an inclusive communitarianism which would justify drawing the middle classes into this particular welfare fold. On reading that paragraph of the Beveridge Report, Seebohm Rowntree might have been somewhat surprised, having written himself: ‘As it is almost certain that if a national scheme of family allowances is introduced it will only apply to parents with incomes below a certain figure … [and again] … it may safely be assumed that there will be an income limit if a national scheme of family allowances is introduced …’ (Seebohm Rowntree, 1941, pp. 167, 169). Beveridge recommended universal cover except for the first child and the government accepted it, but of course the government would accept it having demanded via Keynes that Beveridge save money somehow on the scheme for family allowances (Macnicol, 1980, p. 186). Macnicol considers that it was in fact the cost of Beveridge’s proposal for fully funded pensions which was the crucial determinant of restricting child allowances (Macnicol, 1994, pp. 90–1). In arguing against paying children’s allowances whilst young adults were in full-time employment, Beveridge revealed his economic classicism: The suggestion sometimes made that allowances should continue during the first six months … of earning, on the ground that the initial earnings may be insufficient, is open to the objection that it involves a subsidy to juvenile wages and would tend to keep them down. With the growing shortage of juvenile labour in relation to adult labour the wages of the former are likely to rise and should need no subsidy. (Beveridge Report, 1942, para. 423)

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There is a clear acceptance here that children’s allowances are an intervention in the free market of wages. Restrained over paying children’s allowances for young workers, he has happily recommended a wage subsidy for the rest of adult workers which Seebohm Rowntree had estimated at about £124 million, though using Census data on children from 1921! (Seebohm Rowntree, 1941, pp. 167–8). Beveridge himself gives no estimate of numbers of children, families covered, or the overall cost of his scheme for children’s allowances.5 It should of course be borne in mind that the wartime period was one of massive state intervention and one explained and promoted by the new Keynesian economic theories – by Keynes himself, if not quite at the Treasury, then as an unpaid economic adviser to the government, responsible to the War Cabinet (Hennessy, 1992, pp. 189–92; Thane, 1982, p. 239).

Interest groups In a separate document, Beveridge reproduces the memoranda from a selection of the 127 organisations submitting evidence, based on the generality of their comments to his overall Plan (Beveridge Report, Memoranda, 1942). The Parliamentary Committee of the Co-operative Congress favoured the introduction of universal family allowances (Beveridge Report, Memoranda, 1942, p. 20). The National Council of Women went much further, setting out ‘Preliminaries to Reconstruction of the Present Schemes’ which are, in effect, the same as Beveridge’s three prerequisites. Their third was ‘Dependant’s Allowances’ to: ensure that the family with young children had supplementation of income at the time when expenses were highest and it would operate independently of whether the wage earner was in or out of work. (ibid., p. 31) The memorandum from Political and Economic Planning proposed a ‘Children’s Benefit – All children, whether their parents are in work or in distress, should be covered by a family endowment scheme providing benefits in cash or in kind’ (ibid., p. 36). The Memorandum from the Fabian Society opens with, and continually offers, unequivocal support for formal employment and the personal obligations citizens have to the state. The purpose of social security is to provide: Sufficient maintenance for those who temporarily or permanently lose their earning power – that is the simple service which the

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community owes its members. But they [Fabian Society members presumably] fully recognise the profound reciprocal obligation upon the citizen to co-operate fully in the restoration of his earning power. (ibid., p. 38) The Fabian Society’s tone indicates their attachment to social control: the malingerer and the slacker ‘would be dealt with very severely. This “social” sanction is likely to be far more effective and just and constructive in dealing with the asocial individual than a “financial” sanction can possibly be’ (ibid.). Thatcher’s Conservatives were to have no problem with a dual approach: social sanctions which have financial penalties attached. Indeed their treatment of lone motherhood in the social security context can be seen in that way, inspired by Charles Murray’s view that a lack of social stigma and sanctions had caused family breakdown, and higher than necessary unemployment and a certain level of ‘unemployability’ of some groups (as we discuss in Chapter 4). On the idea of children’s allowances the Fabian Society merely state: ‘The case for family allowances is now generally accepted; we recommend an increasing scale for the third, fourth and subsequent children’ indicating a belief in the pro-natalist possibilities of family allowances (ibid., p. 39). For Fabians, social security was clearly a regulatory instrument of social control. The National Labour Organisation wished to see family allowances limited to the third and subsequent child for parents earning up to £3 per week. The NLO point to the anomalous and disincentive effect of having child additions to benefits whilst: ‘A wage system which takes no account of the size of families indirectly penalises the worker who has undertaken the burden of rearing a large family … Indeed many find themselves better off on unemployment assistance’ (ibid., p. 47). For a populace having emerged from the privations of mass unemployment, the NLO saw ‘Family allowances [removing] the anomaly under which a considerable section of the lower paid workers get less when employed than when in receipt of benefit or assistance’. Family allowances might check the falling birth rate, though: ‘What is sought is a qualitative eugenic effect rather than a quantitative one’ (ibid.; and see footnote 1). The NLO insist that family allowances would be in no way ‘an excuse to any employer to pay less than a living wage’ (ibid., p. 48). There can be little doubt that there was strong support for children’s allowances – a universal benefit directly intervening in the wage market and likely to cost a huge proportion of the whole social security

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budget. It is singularly surprising and heartening, after half a century of struggle, to consider that the apogee of campaigning which brought children’s allowances into being should come in the darkest days of the war, before the allied victories at El Alamein and Stalingrad. The debate for children’s allowances was won when Beveridge made them Assumption A. Of course the exact administrative details and implementation could wait!

The movement for family allowances In the early part of the twentieth century left-leaning political elites tended to conflate the issue of child poverty with the physical efficiency of the population. The social historian Gilbert (1966, pp. 75–80) argues that the leading Fabian theorist Sidney Webb writing in 1901 should be regarded as merely opportunistic when linking ‘national efficiency’ to social reform, via support for the Rosebery faction of the Liberal Party in his famous article ‘Lord Rosebery’s Escape From Houndsditch’ – ‘The basis of imperial strength, said Webb, must be racial strength’ (ibid., p. 77). But similarly when Webb turned his attention to child poverty and allowances in 1907 the basic principle of the eugenic argument remained intact: In order that the population may be recruited from the selfcontrolled and foreseeing members of each class, rather than those who are feckless and improvident, we must alter the balance of remuneration in favour of the child-producing family … we shall indeed have to face the problem of the systematic ‘endowment of motherhood’ and place this most indispensable of all professions upon an honourable economic basis. (quoted in Hall et al., 1975, pp. 159–60) Support for Rosebery might have confused and scandalised radicals of every kind, but Webb’s basic eugenic principles were commonplace. Hilary Land suggests that the eugenic argument was a strong and distinctive strand in the pressures which went to construct a movement for family allowances (in Hall et al., 1975, pp. 170–4). Arguments drawn from the breeding of a healthy population and the political economy of the wage market happily combined during the Great War when payments for children were introduced into the separation allowances for the wives of ‘other ranks’ in the armed forces. The fact that the wives of commissioned officers received no child

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allowance until the very end of that war was later to afford a neat argument for Rathbone: This prevented many able non-commissioned officers with large families from accepting commissions, because it would have meant for them a reduction of income. (Rathbone, 1949 ed., p. 230) In a market where some wages attracted subsidies or allowances based on children in the family the freedoms of that market are bound to be distorted. Rathbone and others claimed only payments for all children would remove this disincentive. In the meantime, Rathbone hailed child-based separation allowances as ‘the largest experiment in the State endowment of maternity the world has ever seen’ (in 1917, quoted in Hall et al., 1975, p. 162). Exchanging the armed forces for the dole queues, demobilised service personnel continued to receive child additions to their out-of-work donation (as unemployment benefit was called for young servicemen who had never had the opportunity of paying into the insurance scheme). After much variation in the terms of benefits, in 1921 as a ‘temporary measure’ child allowances were introduced universally to unemployment benefits: ‘They have never been withdrawn since’ (ibid.). The introduction of a wartime measure to attract service recruits – in competition with the wages of warproduction industry – became the impetus for the maintenance of a child allowance when the same personnel became dole-fodder. To avoid anomalies, the treatment of civilian unemployed and ex-armed forces unemployed men had to be equalised. Hence one plank of the movement for family allowances was then firmly established, and its source was both an issue of equity and demonstrates the ever-present relationship between wages and benefits, even in the more managed wartime economy. From 1921 until 1940, never less than one million unemployed applicants were eligible for a benefit that had a child allowance, and such men were the very ones who would be pitched at entry-level wages in a job market taking no account whatsoever of family size. The approach of the trade unions and the labour movement in general to the issue of child poverty was intimately connected with wages. The Independent Labour Party had realised, in the Pitt tradition, that minimum wage legislation was insufficient to meet the needs of all family sizes, hence in 1926 they adopted the Living Wage policy. It was a policy of minimum wage plus state allowances for all children. A prominent ILP member declared: ‘We would raid the luxuries of the rich to

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give a chance of life to the children of the poor’ (in 1926; quoted in Hall et al., 1975, p. 167). He was Hugh Dalton, to become the very Chancellor who granted the money for the first family allowances in 1946 with ‘a song in his heart’ (Hennessy, 1992, p. 130). Activists in the organised labour movement, if they wanted family allowances at all, wanted them financed out of general taxation and run by the state. They had noted the way continental schemes, and the French was cited as an example, allowed employers to hold down wages whilst increasing the family allowances they were funding and administering, and also using the family allowance scheme as a means of manipulating terms of employment (Hall et al., 1975, p. 168 and fns 39–40; and p. 215 fn. 219). Beveridge was a total convert to Rathbone’s idea of family allowances by 1924.6 He became a campaigner for her Family Endowment Society and in policy terms began the long processes of gaining general acceptance for family allowances as both a tool in reducing family poverty and a regulatory instrument of wage control. As a member of the Samuel Commission on the economic problems of the coal industry in 1925 he had: shepherded the Family Endowment Society’s leaders through the protocol of submitting evidence … Eleanor Rathbone was clearly delighted that Beveridge had been appointed to the Commission since he would guarantee them a sympathetic hearing … Beveridge worked on his fellow-commissioners to persuade them to include a recommendation of family allowances in the final report. (Macnicol, 1980, p. 33) However, Macnicol claims that Beveridge’s support was not entirely out of concern for the child poverty of the lowest paid surface workers. Beveridge believed wage-cuts in the coal industry would make it world competitive. He persuaded Eleanor Rathbone to accept a wage level mid-way between Seebohm Rowntree’s7 Human Needs standard and his 1899 York survey standard. Onto that could be added family allowances, the result being a lower wages bill for the coal industry (ibid.). Rathbone presented evidence to the Commission in that form. Beveridge brought round the other members of the Samuel Commission to his way of thinking, which reported in March 1926 that family allowances were: One of the most valuable measures that can be adopted for adding to the well-being and contentment of the mining population. (quoted in Macnicol, 1980, p. 34)

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Family allowances had received a kind of government sponsorship, but as the labour movement suspected, only as a way of keeping down wages. The General Strike and miners’ lock-out made Samuel’s recommendations void; however, Macnicol claims that by the late 1920s miners and their leaders were amongst the strongest supporters of family allowances, the wage suppression issue notwithstanding (ibid., p. 35). The ambivalence of many sections of organised labour can be judged from debates within the TUC. We have noted strong support from miners, particularly at the local level, but the TUC in 1930, in opposition to the majority report of its own expert committee, recommended support for increased social services, voicing several concerns over proposed family allowances: they would divide single from married workers and undermine the ability of wage negotiators to secure higher rates of pay; weaken unionism generally, as it was alleged to have done in continental Europe; the extension of the social services was collectivist, whereas family allowances were deemed sectional; in a era of public spending reductions, family allowances were expensively impractical (Macnicol, 1980, pp. 146–9 and Land in Hall et al., 1975, p. 169 consider the TUC’s changing attitude). The TUC had a fair point in calling for more social services, for did not all the poverty studies of the 1920s demonstrate the endemic character of child poverty – its ravages on health and physique? The family allowances movement also used those studies in its campaigns, but to demonstrate to every relevant government department, via the Children’s Minimum Campaign Committee, that free meals and milk alone would not eradicate malnutrition. Gradually as a result of this evidence, by the late 1930s social services came to be seen as complementary to family allowances, rather than the alternative which the TUC had argued in 1930. Macnicol (1980) demonstrates how the Unemployment Insurance Statutory Committee8 (UISC) played a significant role in demonstrating the problem of differentials between unemployment insurance benefit rates, Unemployment Assistance Board means-tested scale rates and the lowest wages. Concern over work-incentives was growing: In its report for 1935 the Committee called for a thorough investigation of the relations between wages, benefits and assistance, and in its first hint at family allowances it warned that ‘the growing direct provision for families, under unemployment insurance and assistance, is beginning to raise acutely the general problem of dependency under a wage system which makes no similar provision’. (Macnicol, 1980, p. 123)

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Through 1936 and 1937 the UISC became increasingly fearful of the long-term implications of benefit rates on work-incentives. The UISC’s chairman, Beveridge, was stuck in an impossible dilemma: supporting family allowances was a campaigning issue for him, but raising child allowances to men on unemployment benefit would breach principles of insurance and create a work disincentive of quite large proportions. The trouble was the UISC had to handle each year a rather large surplus in its insurance fund, which could have financed higher child allowances; in the event those surpluses just went to paying off the government insurance fund debt which Beveridge, Stocks and the rest knew did not help poorer children. So acute had this issue become that in 1938 the UISC reported that ‘if … the wage system made allowance for dependency, the main objection to further increase in the rates of [unemployment] benefit would be removed’ (quoted in Hall et al., 1975, p. 176). Unemployment benefit was inadequate to meet family need and the fund could afford to pay more. If rates were raised, even just child allowances, that would bring benefit income well above the lowest wages for a large proportion of claimants. Whereas if family allowances were paid to working men with children, the differentials problem of the out-of-work receiving more money than the working poor would be removed. Of course this would not have touched the labour movement’s general (and very real) concerns over the inadequacy of wages, but a new and different way of explaining the benefits of family allowances had emerged. Beveridge and Stocks from the authoritative platform of the UISC were able to present family allowances as a work incentive. There had been discussions with the Unemployment Assistance Board who were also minded to support family allowances, and so: ‘By the late 1930s therefore both government bodies dealing with the able-bodied unemployed had come round to a virtual recommendation of family allowances’ (Macnicol, 1980, p. 125). Rathbone and her movement now had the campaigning edge over Tory detractors who could not counter the demand for family allowances when advocated as an incentive to work. This breakthrough in thinking clearly identifies family allowance as an in-work benefit: that is a state social security payment aimed at mitigating the effect of the lowest wages on the poorest families with children, without intervening in the free market of wages. Hardly surprising that the labour movement were ambivalent to say the least. In 1938 the Labour leader, Clement Attlee, was still describing proposals for family allowances as an attempt to keep wages low. Land claims that it was the new-found

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strength of the unions during the Second World War which led to a majority in the labour movement being finally able to fully accept family allowances without fearing any loss of power in collective bargaining. The consensus in favour of family allowances is often attributed to the tireless campaigning of the rich, feminist, politician and Liverpudlian philanthropist Eleanor Rathbone (by, for example, the social historian Hennessy, 1992, p. 129; for a rounded sympathetic account see Pedersen, 1994). She created the Family Endowment Society in 1917 and the Children’s Minimum Council in 1934, through which the trade union movement and the political establishment were vigorously lobbied. However, when the argument seemed won it should be remembered that the new consensus for family allowances had been swollen by converts who saw family allowances as a way of achieving many policy goals. Indeed it could be argued that the sheer variety of arguments in favour of family allowances had tended to foster the suspicions of, for instance, trade union leaders that they were (really) a way of holding down wages (Macnicol, 1980, p. 177). The feminists in Rathbone’s movement were concerned to improve, practically, the status of women as the child-rearers. The band-wagon for family allowances was certainly rolling, but it was over-loaded with good intentions. How much could these disparate groups expect of family allowances? An instrument was now to be devised which would be at one and the same time an incentive to work; encourage breeding; solve child poverty; address low wages and diminish patriarchy. Just how hard did these people think five shillings a week per child could be made to work!

Keynes and the war The arguments in favour of family allowances were persuasive, after all there were enough of them. However, there was another strand to the argument which took off with the coming of the Second World War, generated by a completely different set of perspectives from the new Keynesian economics. The difficulty of the prewar arguments for family allowances was that they were no part of the government’s economic policies or strategy. That changed after May 1940 when it was obvious the war was total – and we were not winning. Beveridge had both devised and answered the disincentive question which left the way open for presenting family allowances as part of an economic strategy necessary for national survival, recovery and rehabilitation. Keynes’ influential pamphlet How to Pay for the War (of 1940) ‘endeavoured to

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snatch from the exigency of war positive social improvement’ which would also curb the inflation which so concerned contemporary economists and the Treasury (quoted in Hall et al., 1975, p. 181). In doing so, Keynes realised that it would be necessary to protect ‘those whose standard of life offers no sufficient margin’ (ibid.), mainly members of large families on low wages. His plan was, essentially, a ‘national minimum’9 income for essential items with high levels of progressive taxation, and strict control of prices and wages. He realised none of that would touch child poverty. His proposed solution was family allowances (Thane, 1982, pp. 239–40). Upper incomes would be taxed more progressively, but lower incomes remained in the grip of regressive taxation, for which an allowance paid with regard to the number of children in the family should offset some of that depressing effect on household income levels. The labour movement still held a generalised belief in adequate wages as the solution to child poverty. Although Ernest Bevin, who, as wartime Minister of Employment and National Service delivered the vitally necessary voluntary wage restraint, was not one of those who recognised that, at least in wartime, only family allowances could mitigate the effects of low wages and inflation. He had built up the mass membership Transport and General Workers’ Union which contained most of the lowest paid workers in the country. He and it saw family allowances as a way of avoiding adequate wages and reducing the bargaining power of organised labour (Macnicol, 1980, p. 24; also Hall et al., 1975, pp. 179–80). Land (ibid., pp. 180, 183–6) makes the case that it was the realisation of their strength in the corporate endeavour of total war which allowed trade unionists who were reluctant, finally to accept family allowances – that, along with new economists in Cabinet and the government, which weakened the voice of the ever antipathetical Treasury. Bureaucracy took a hand in supporting the family allowance movement when by 1941 it was noted that of all forms of non-investment income, only civilian wages had no allowance for children, so widespread were such additions in benefit income and armed-forces pay. The anomalous situation was widespread of, for example, RAF riggers working alongside Air Ministry electricians on the same Spitfires, the former receiving allowances for their children, the latter not. As a report to the 1942 Labour Party Annual Conference put it, a stage had been reached ‘where the only people who do not enjoy family allowances are the poorly paid civilian workers’ (quoted in Hall et al., 1975, p. 188). At that conference, the Welsh miners’ leader James Griffiths thundered in

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support of family allowances: These are the children that are to build the new Britain you and I talk about; how can they build a new Britain if in the early stages of their life, their bodies, minds and souls are warped by poverty? (ibid., p. 190) With Labour on-side the lobbying of the Chancellor, Kingsley Wood, by the all-party group on family allowances, was intensified until he agreed to investigate their introduction. The government’s White Paper of 1942 set out baldly the arguments for and against without commitment to any particular scheme, although the Chancellor favoured a universal flat rate system. One of the main arguments against family allowances was said to be that they would interfere with free collective bargaining. Opinion was divided over whether family allowances should be universal or selectively paid to the poorest families, with the most children. Interestingly, the Chancellor believed that if the objective of family allowances was to address the deficiencies of wages in meeting the needs of large families, then paying such an allowance would ‘lead back to Speenhamland’ (Hall et al., 1975, p. 193 fn. 136). Henceforward arguments supporting family allowances studiously avoided the argument around deficiency of wages! In the following House of Commons debate on family allowances outright opposition came only from the far left and far right classical liberals. In a manner which prefigures the opposition to in-work benefits as articulated by Bill Jordan (see Chapter 6), the parliamentary left of 1942 claimed that family allowances were a compromise with exploitative capitalism which would lead to the pauperisation of the poor. However, the tide of opinion said otherwise as encapsulated in the Daily Herald headline of 22 June 1942 – ‘Of course we want family allowances!’ With Beveridge making family allowances Assumption A of his plan, opinion in parliament highly favourable, with the press and most of the unions in favour, and with family allowances clearly linked to a workable economic strategy on inflation control and wage restraint, it takes some explaining why four years had to pass before they were finally introduced in 1946. In the interregnum between the publication of Beveridge and parliamentary discussion of the Plan, Macnicol (1980, pp. 188–91) details the curmudgeonly discussions and timewasting delaying tactics of senior civil servants who believed family allowances would lead to a minimum wage and totally rejected the pro-natalist arguments. They appear to have just coined 5 shillings as

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the rate for family allowances because it was obviously not subsistence, but had been suggested by campaigners (for example Seebohm Rowntree) as a possible figure: clumsy move. The government announced its acceptance – in principle and with no commitment – of the Beveridge Report in February 1943. This included the acceptance of cash allowances for children of 5 shillings per week (the figure suggested by Keynes) for the second and subsequent child in families whatever the income (as Keynes and Beveridge had agreed) (Hansard, 1943, cols 1666–7). The Chancellor argued that the reduced figure would be augmented by welfare services for children, easily worth 2 shillings and six pence a head (ibid.). Although they had spoken of ‘immediate steps’ the government would not commit itself to a timetable, but in the face of mounting criticism the Prime Minister spoke in March 1943 on the BBC that there would be a plan for social and economic reforms to be implemented after the war had been won. Churchill emphasised the importance family allowances would have in increasing the birth-rate, which was hardly surprising as latterly Rathbone herself had been justifying family allowances in those terms alone: the State has a means of either stimulating the birth-rate or checking it through the system of family allowances, so giving the community some power over its future destinies. (quoted in Macnicol, 1980, p. 190 from the minutes of a Departmental deputation) The government’s deft move now made the movement for family allowances appear as part of postwar reconstruction. They had moved from their independent status as an element in managing the war economy and all the rest of the reasons for their introduction, to being bundled up as part of the Beveridge Report and therefore could be delayed until after the end of the war, because Beveridge was about postwar reconstruction.10

But when? The wartime government engaged on two fronts with family allowances. If they were part of the Beveridge Plan they had to await postwar reconstruction. However, in contradistinction to their attitude to the Plan, the government had made it very clear that family allowances

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were to be introduced, and even stated at what rate of weekly benefit per child. It is Thane’s contention (1982, pp. 239–40) that as the government were reluctant to implement the Beveridge Report in full, they announced their intention to introduce family allowances as a politically astute move to gain the support of low-paid front-line workers. One may claim the generality of the Beveridge Report was more contentious than family allowances and anyway it addressed poverty in old age and long-term unemployment, hardly the stuff of a wartime agenda. One may also suggest that the same circumstances could be made to argue the opposite case: that it was more likely that the Beveridge Report would be accepted as an entity if the already accepted family allowances were bundled in with it, so to speak. That might have been Beveridge’s intention. Another possible explanation for delay is offered by Land from what little evidence there is of the negotiations with the USA over LendLease.11 As an indication of US attitudes towards their dollars going towards our welfare state, the US negotiators had the words ‘abolition of unemployment and want’ removed from the Atlantic Charter of 1941. Beveridge and his wife have hinted that Churchill was ‘badly’ advised and ‘hostily’ influenced in his delaying of family allowances, so Land suggests there might have been US pressure not to introduce family allowances until the war was won (discussed by Land in Hall et al., 1975, p. 210 and fn. 202).

Servicemen’s dependants’ allowance A far more likely explanation for delay explored by Land is the servicemen’s dependants’ allowance. A vigorous press campaign was waged for most of the war to have service pay increased. In general, wages in civilian trades were higher than the armed forces, but service personnel received allowances for dependants, as we have already explained. The government, and Bevin in particular, had a very difficult job in directing labour without the tool of statutory wage controls. If family allowances had been universally introduced, it would have been necessary to increase service pay in order to maintain some level of comparability. The cost of such a measure in wartime would have been enormous – the cost of service personnel’s dependants’ allowances in 1944 was actually £23 million more than the first year’s cost of family allowances. The cost of paying and the inflationary pressure caused by introducing family allowances could not have been sustained. The only way of making the forces marginally attractive – compulsion and

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conscription having real limitations in both the armed services and the reserved occupations – was to maintain dependants’ allowances, and even increase them in May 1944. Hence the delay in introducing universal family allowances until hostilities ceased, because if family allowances had been introduced universally, service pay would have had to be increased in compensation. With the war over and consequent demobilisation, the ‘problem’ would evaporate at the rate service personnel returned to civvy street. The government was using its ability to set armed forces pay and manipulate allowances exactly like a free-market employer: the allowances were used to depress service wages, whilst the complex benefit system obfuscated the pay differentials with civilian employees. The paradoxical situation was generated whereby one set of social and economic circumstances of the war justified family allowances, but another set meant that those allowances would only be promised, not delivered for the duration of that war. It was March 1945 before the government dared to suggest that if family allowances were introduced service personnel dependants’ allowances would need to be ‘adjusted’. In the event although taxable family allowances were not withheld from service personnel, their non-taxable, and higher, dependants’ allowances were withdrawn, but at the same time as a new pay structure was introduced.

A scheme is outlined The scheme for family allowances was set out in the White Paper Social Insurance of September 1944 (Minister of Reconstruction, pp. 14–16) which outlined the complete scheme of social protection envisaged by the Coalition government and based, largely, on the Beveridge Report: The following proposals [for family allowances] are based upon two principles, first that nothing should be done to remove from parents the responsibility of maintaining their children, and second that it is in the national interest for the State to help parents to discharge that responsibility properly. The scheme here set out is not intended to provide full maintenance for each child. It is rather a general contribution to the needs of families and children. (Minister of Reconstruction, 1944, para. 50) The reasons for excluding the first child were explained in the debate on that White Paper to be on the ground of parental responsibility and

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the excessive cost which would be entailed by including them (Hansard, 1944, col. 1111). The debate encapsulated the range of support which family allowances enjoyed – Tories on the grounds that family allowances would play a part ‘in overcoming the disparity between those on benefit and those at work’ (ibid., col. 1000). But Beveridge, now as an MP, along with other Liberals and many Labour members, did not believe either the scheme for family allowances, or the proposed better nutritional standards at school, would actually prevent child poverty. The government simply answered that it was not supposed to do that. However, the government had by this stage accepted that the scheme for family allowances was ‘outside the bounds of the scheme of social insurance properly so called’ (Minister of Reconstruction, 1944, para. 6). Hence it could legitimately argue that family allowances were not essentially a social protection matter and so need not rest on a principle of subsistence. At that date the government had not publicly abandoned the idea of subsistence-level benefits as proposed by Beveridge. The government appears to have won the whole of the debate: family allowances were not part of Beveridge hence they need be neither at subsistence level nor part of the timetable for introducing the Plan. This was accepted in the debate on the White Paper, as was the principle of universality, ‘otherwise they would be of little benefit to the middle income group’.12 The reasons for delay already discussed notwithstanding, there was general agreement in the House that the scheme should be introduced forthwith. If one believes in parliamentary timetables taking their course, the stages proceeded smoothly, although the timescale seems very protracted.

‘The baby is a very little one’ – the Family Allowances Act, 1945 However, there was an unresolved issue directly connected with the reason for the delay in implementing family allowances. The most contentious part of the proposed legislation was the withholding of family allowances from service personnel on the grounds that there should be no duplication with any other children’s allowances. And there was a new problem: to whom should the allowance be paid? The government, on Home Office advice that otherwise family law would be breached, proposed that it should be paid to the father. Eleanor Rathbone and the family allowance movement would have none of that, but in arguing with senior civil servants the latter found it ‘curious to rely on the payment of a few shillings each week to achieve this desirable

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aim [raising the status of women as mothers]’ (Macnicol, 1980, p. 193). The incomprehension of these powerful old men speaks volumes about the English class system, its political and administrative elites. After the government actually lost the vote on excluding service personnel’s dependants’ allowances, Churchill himself (who was personally astounded that it should ever have been suggested that they did not receive both) pledged that agreement had been reached over this issue and service personnel would benefit from the new family allowances. Eleanor Rathbone MP believed it was an insult to motherhood that the government should dare to suggest family allowances would be paid to the father: on a free vote the point was won. Thus after 150 years since first suggested in parliament during the revolutionary wars with France, family allowances were legislated into being at the very end of the Second World War. But as the Minister of National Insurance mewled, ‘the baby is a very little one. We feel it will have to be a good deal fattened and cosseted before it reaches its proper stature’ (Hansard, 1945, col. 1418). Trying to control their composure in the face of such sentimentality, critical MPs pointed out why it was so scrawny – allowances were not at subsistence level; the first child was excluded; and there were no regulations for revision of allowances or connection with the cost of living. All of these instruments were within the government’s power, but with the death of Eleanor Rathbone in 1946, the work done, her movement ended. Women’s organisations and the labour movement generally were concerned about wages and welfare provisions, not family allowances. If the family allowance scheme was a very little baby, economic historians now recognise that it was a consistent part of a generally austere welfare programme. Far from building a New Jerusalem by profligate welfare spending, Attlee’s postwar Labour government were behind Austria, Belgium and West Germany in social welfare spending and the increase in the postwar social security budget over that for 1938/9 was only marginal (Tomlinson, 1998; similarly Lowe, 1994, p. 126 et seq.). Tomlinson shows how the Chancellor, Stafford Cripps, treated welfare provision as a form of consumption and hence a much lower priority than either exports or investment in its claim for resources to combat inflation and the balance of payments problem. The only advantage which family allowances could be shown to have from such a Treasury-inspired view of welfare spending as a deadweight consumption burden, would be if family allowances actually did raise the birth-rate. Wartime demographers predicted a UK population decline to 30 million by 2047 (Thane, 1990). We now know that

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these projections were pessimistic and that the wartime birth-rate was actually rising even whilst those demographers, lacking accurate up-todate statistics, were deliberating. Tomlinson (1998) explains how Treasury civil servants used such expert advice to project a picture of an under-populated Britain with insufficient wealth-generators to pay the taxes which would fund new social security schemes such as family allowances. But Beveridge specifically rejected a ‘Santa Claus state’. He stood for sound money, budgetary purity, limited contractual entitlement, a Spartan subsistence minimum, and firm behavioural controls. In making those points Harris goes on to claim: Much of its (the Report) popularity lay in the very fact that it was so closely in tune with the wartime ethic of bread for everyone before cake for anyone – or as one TUC spokesman put it, ‘the stockpot for everybody … a dessert or sweet afterwards is something over and above’. (Harris, 1994, p. 35) So in sympathy with the spirit of the age was Beveridge that the enthusiasm of the people for his Report is undeniable, leading Harris to conclude he had produced a Plan that was ‘classical-republican’ (ibid.). As Land demonstrates, by the time the Bill passed into law the media and public perception of family allowances had crystallised around population growth as the sole purpose of this complex measure of social and economic regulation. The reduction of child poverty and increasing work incentives had been forgotten (Hall et al., 1975, pp. 223–4). However, if politicians and the public chose to explain and understand family allowances as an instrument to regulate population it must have been thought to have achieved its goal as the UK birth-rate rose quickly until 1964. The rate of allowance stagnated throughout the 1950s and 1960s.13 It is therefore hardly surprising that Enoch Powell should ironically quip ‘yet we have these payments still in 1964, their origin forgotten, their value eroded’ (cited in Hall et al., 1975, p. 226). Rowntree’s third survey of York (published 1951) demonstrated that: Child poverty in working families had essentially disappeared. This view was to colour public perceptions for the next fifteen years … Rowntree showed that without the impact of the Labour government’s welfare measures, including the introduction of family allowances, a fifth of the working-class households in York would have fallen below [his] poverty line. (Glennerster, 1995, p. 115)

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However, in the latter part of the 1960s rapid inflation and consequent pressure for higher wages foregrounded family allowances once again as a powerful regulatory instrument in such circumstances. The ‘rediscovery of poverty’ by Abel-Smith and Townsend, the consequent creation and development of the Child Poverty Action Group in 1965 by Frank Field followed by Ruth Lister’s tireless work, changed the prevailing apathetic complacency. Higher family allowances were seen as the way of increasing quickly the incomes of the poorest families in work, without disincentives, which were at that time being explained or rebranded as the ‘poverty-trap’: exactly the arguments of Rathbone, Beveridge, Seebohm Rowntree and their generation. Because family allowances and their successor Child Benefit were conceived as universal, they were unable to carry out the deflationary regulatory task of adequately supporting entry level wages. However, in the historical context of postwar Britain, the main point is that family allowances addressed the Pitt question relatively cheaply and with administrative ease. That ‘ease’ is only understood with hindsight for at the time the senior civil servants believed family allowances were an administrative nightmare (Macnicol, 1980, p. 192). Because it had become obvious by 1940 that a national minimum wage would not be introduced, the bulk of the labour movement swung its considerable support behind family allowances. The political parties each saw electoral advantage in supporting family allowances. The conjunction of social and economic circumstance during the Second World War made family allowances happen in a certain way. Neither the Great War nor the Depression had proved to be the context for change, and that is not simply because more time had to elapse in some Webb-Fabian notion of progress from the inception of an idea at a Hampstead gathering to its implementation, as if the idea had just to be assimilated by power elites and masses alike. The difference during the Second World War was a thoroughgoing acceptance of economic regulation via state power; a realisation that using such regulators creates anomalies; a willingness to try new administrative devices; and of course a lull in the ideological posturing of class-based struggle. Basically family allowances were an example of the social mode of economic regulation. The desperate circumstances of the time unlocked the opportunity to use it in that way, but the key motivations were still economic and political. Family allowances were an alternative to the truly radical, and vastly expensive, wage rises demanded by the left. Family allowances would increase the income of workers with children, but only just enough to ensure labour mobility and work incentives. Macnicol (1980, p. 186)

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concludes that the discussions around the Beveridge Plan were the most crucial phase in the acceptance of family allowances, but: primarily as a means of holding down wages and combating inflation … [and] as a means of ensuring less eligibility, work-incentives and labour mobility … it was the needs of the economy rather than the children that dominated discussion. Unconvinced by the child poverty evidence, totally rejecting the pro-natalist possibilities, uncomprehending of the rights of women argument, the senior civil servants and most ministers of the English administrative and political elites only accepted the expedient of family allowances because it avoided the question of a minimum wage whilst ensuring work incentives. Interestingly, Pitt’s critique could also be understood in that way. The argument for in-work benefits comes from just this tradition of economic reasoning.

Ending child poverty in the millennium – a role for children allowances? Neither mass movement nor pressure group lobbying gave us in-work benefits. No one could imagine a banner headline in The Sun demanding ‘Working Family Tax Credits Now’ in the manner of The Daily Herald’s populist ‘Of Course We Want Family Allowances!’ After reviewing the wagon-load of arguments and evidence to support a popular measure of social reform it seems only the economic ones counted, and even then it could not be introduced at the juncture of economic crisis when it would have proved most useful – the beginning of the war. Not until CPAG in the mid-1960s was the case for adequate family allowances again put, yet despite their massive up-rating in 1968 to a level higher than 1946 equivalence, Labour gained no credit because for higher wage-earners the value of the increased family allowance was ‘clawed back’ through increased taxation. The government had to contend with irate male trade union workers who failed to understand that the money was being paid directly to their wives as mothers. However, CPAG powerfully, and damagingly, claimed during the 1970 election that the poor were worse off under Labour. The incoming Tory administration under Heath ditched their fair-weather support for higher family allowances and rapidly introduced FIS (discussed in Chapter 6), a Treasury creature first set before Wilson’s Labour government,14 as ‘an alternative to the general uprating of family allowances

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which the poverty lobby had been urging’ (Vincent, 1991, pp. 164–6). The social historian David Vincent further claims that the introduction of FIS was a recognition that family allowances were incapable of solving child poverty. In-work benefit was now set to become the instrument of economic choice in the regulation of the connection between child poverty and low wages. With today’s in-work benefits tailored to family size, and for nonworking claimants, child rates which are above CHB, and the NMW, what – we might ask – is the continuing point of a universal children allowance? The economic arguments do not support it any longer; the pro-natalist ones are clearly fallacious; average earnings are in excess of subsistence. Is it meant to support some space where children’s financial need still exists between the eligibility for other benefits, or is it just part of the ‘patchwork’ (definitely Crazy English, not Amish Courthouse Steps) of social protection which altogether will somehow help poor people? These questions are asked mindful of the massive child poverty we still have and the Blair government’s commitment to end it in 20 years. One might hope that a pamphlet titled Ending Child Poverty (Walker, 1999) would shed some light on the role of CHB in an anti-poverty strategy beside providing insights on its object and purpose. However, the pamphlet is a review of the Prime Minister’s speech ‘Beveridge revisited: a welfare state for the 21st century’. He claimed: Welfare, though not the concept of the welfare state, became a term of abuse. It became associated with fraud, laziness, a dependency culture, social irresponsibility encouraged by welfare dependency. Welfare was blamed as the problem not the solution. This was dangerous. For if people lose faith in welfare’s ability to deliver, then politicians have an impossible job persuading hard-pressed taxpayers that their money should go on a system that is not working. If all welfare – the good spending as well as the bad – becomes stigmatised, then the security of children, the disabled, pensioners is put at risk. (whole speech reproduced in Walker 1999, excerpt p. 12) Blair reaffirmed his government’s commitment to ending child poverty and outlined the extent of their deprivation: one in three in poverty despite a whole raft of universal and targeted social security benefits. There is still a belief in the communitarian character of payments for children: ‘But our reforms will help more than the poorest children. All parents need help. All children need support’ (Walker,

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1999, p. 16). In his analysis of that speech, the economist Tony Atkinson amplified the point by directing our attention to the major instrument: ‘Child Benefit is a powerful commitment by a country to investment in its children’, whilst Walker characterised CHB as ‘foster[ing] cohesion by sharing the cost of social reproduction [and reducing] life-course inequality in income, and lessen[ing] the risk of childhood poverty’ (Atkinson, 1999, p. 31; Walker, 1999, p. 103). Amidst an array of twelve or so of Britain’s leading ‘poverty academics’ (including a former director of CPAG) it was down to the journalist Polly Toynbee to make the pitch for CHB: [Child Benefit] is a different piece of the patchwork altogether from the National Insurance entitlements, with a different purpose and very different effects. It is the best bridge between welfare and work, helping to remove work disincentives. Given the huge increase in the proportion of children who are born into poverty it is a well-targeted benefit too and one to be built on. The Chancellor has already said that he will tax it in future, and I see no reason why he shouldn’t claw the whole of it back from top-rate taxpayers or their partners … But the key principle of paying it in the first place to every mother must remain, even in those families where the whole lot is taken back, in order to retain its present full take-up and to keep the wallet to handbag effect. (Toynbee, 1999, pp. 115–16) That defence could have been from Rathbone herself. Lacking throughout these reviews is any economic explanation to support CHB being a part of what they call ‘the patchwork’ of welfare to reduce child poverty. Our thesis is that the crucial economic arguments are reserved for the flagship in-work benefits: they will actually reduce child poverty in the context of welfare policies which meet the needs of capital accumulation, claim the government. Obviously on their own FAM never did and CHB does not solve child poverty (and no one in Ending Child Poverty is claiming it can). Its work (dis)incentive role has been superseded by WFTC, yet the communitarian and feminist arguments endure.

8 Conclusion: Regulation and Income Maintenance into the Twenty-first Century

Regulating accumulation The Work Connection starts from the premise that income maintenance policies can be understood as being more than just the state’s response to the existence of individual financial ‘need’. It has shown how at differing historical epochs debate about, and change in, income maintenance policies are structured by concerns about the possible effects those policies will have on the economic fundamentals of the supply and wage demands of labour. Of course there is concern about meeting common human needs from public funds; if there were not, there would be no tensions and contradictions to be resolved. The regulation theory framework within which those income maintenance policies have been analysed has helped us to understand how the policies have been destroyed and reconstituted at particular points in history. The focus has been upon explaining and analysing the relationships between three elements: changing economic thought, the world of work, and income maintenance policies. A regulation theory framework allows such analyses through an understanding of its two main concepts: the accumulation regime and the social mode of economic regulation. As we have seen a given accumulation regime (the way in which and the processes involved in capital accumulation) only survives if its attendant social modes of economic regulation are congruent with it. If modes of regulation – those mechanisms that provide guidance and stability for the accumulation regime – are not congruent the accumulation regime will falter, leading to economic crisis and a search for an accumulation/social mode of economic regulation compact that will help overcome those crisis tendencies. In other words, particular social modes of economic 175

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regulation are congruent with, and supportive of, particular accumulation regimes only. Hence, it should be expected that as accumulation regimes change, so too do social modes of economic regulation. By focusing upon the changing approaches to accumulation, it is possible to examine and theorise changes to income maintenance policies as crucial elements of the social mode of economic regulation. We have seen how the income maintenance elements of the mode of regulation have changed at particular points of massive economic and social upheaval: the development and destruction of Speenhamland-style allowances-in-aid of wages in the transition from pre-industrial moral economy to the cash-nexus of free-market political economy; the development of Family Allowances as a universal benefit in the shift from an essentially laissez-faire economic paradigm to a Keynesian economic paradigm; and finally, the development of in-work cash transfers (and eventually the NMW) in the shift from Keynesianism to neo-liberalism in the 1980s and 1990s. Our focus has arguably been upon the relationships most closely connecting accumulation and regulation: those between in-work and out-of-work incomes and the role of income maintenance policies in maintaining labour discipline through the maintenance of what we now call ‘work incentives’, but what is essentially a sanitised term for ‘less eligibility’. Those relationships are important because of their position in the discursive construction of ‘dependency’ and various notions of ‘underclass’, and the discourses used to explain why people become or remain non-employed. They are also important because their utilitarian basis is clearly held to be the key to maintaining the supply of labour, no matter what the approach is to accumulation. The bottom line is that in order to survive capitalism must have, and its managers must ensure, a continuous and (fairly) compliant supply of labour. Policy-makers and influential thinkers have believed for at least 200 years that the supply of labour is easily subverted if the financial rewards/penalties for labouring are not congruent with thought upon how the accumulation process works or should best proceed. In other words, an accumulation regime cannot be left ‘regulationless’, even, as has been the case since the 1970s, if it is argued that the state should withdraw from or take a lesser role in economic and civic society. In short, a free market cannot be left free from state intervention because markets and the accumulation process are not just the result of economic phenomena, but are firmly embedded in social process and institutions. We have shown, for example, how income maintenance policies have been crucial in what Offe (1984) describes as ‘the lasting

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transformation of non-wage-labourers into wage-labourers’. What he means by that is through social policies (and it is probably fair to say that income maintenance policies are the best examples of such policy manifestations) the state actively constitutes wage labour. That process cannot be left to its own devices, for clearly there is no reason as to why a non-employed person may choose to take paid employment. As Offe notes: The spread of relations of competition to national and then world markets, the continual introduction of labour-saving technical changes, the undermining of agrarian labour and forms of life, the impact of cyclical crises: these and other factors effectively destroy, to a greater or lesser extent, the hitherto prevailing conditions of the utilization of labour power. The individuals affected by such events find their own labour capacities – whose condition of utilization they control neither collectively nor individually – can no longer serve as the basis of their subsistence. But this, of course, does not mean that they automatically hit upon the solution to their problems by alienating their labour power to third party in exchange for money. Individuals do not automatically enter the supply side of the labour market. To assume such an automatism would tailor the historical norm to something that seems sociologically self-evident, thus losing sight of the mechanisms that must exist if the ‘normal case’ is to actually occur. (ibid., p. 92) One could add to his factors affecting the ways in which labour is utilised shifts in accumulation regimes (for example, from Keynesianism to neo-liberalism). By doing so, a further level of analysis can be introduced that focuses upon the mechanisms that as Offe says ‘must exist if the “normal case” [of wage labour] is to actually occur’, for, as we have seen, those mechanisms are particular to approaches to capital accumulation at particular points in time. In other words, while the state’s role in the construction of waged labour are historically continuous, the mechanism (what we have termed social modes of economic regulation) employed in the constitution of labour is historically contingent, depending upon the economic paradigm and the socio-economic factors that have to be managed within its confines. We have seen, for example, how the Conservative governments of the 1980s and 1990s saw the Keynes–Beveridge contingency benefits as creating rigidities, particularly financial disincentives to work, in post-industrial neo-liberal

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labour markets that were increasingly (particularly for those receiving out-of-work benefits) low-paid, part-time and casualised. Despite a discourse that suggested what was needed was a withdrawal of state interference from economic and civic society, what we actually witnessed was a re-regulation of accumulation with modes of regulation that were thought to be more supportive of the flexibilities that Britain required if it were to compete in global markets. That, we argued, was the driving force behind the development of in-work benefits as the main pillar of the Conservative social security policy and their metamorphoses into ‘tax credits’, the main policy development in ‘new Labour’s’ ‘welfare reform’ package. The approach that we have taken helps to overcome some of the more problematic aspects of neo-Marxist social policy analyses that emerged in the 1970s and early 1980s. Klein (1993) parodies the contribution of those commentators through the creation of O’Goffe, a symbolic summation of the work of O’Connor (1973), Gough (1979) and Offe (1984). Those writers in various ways contributed to the social policy debate the idea that the legitimacy of the capitalist state was threatened by the contradictory nature of the need for legitimation and consumption on the one hand, and the demand for profit from capital on the other hand. That conflict was not just a reflection of economic crisis but indicative of the inherent contradictions of capitalist societies (Klein, 1993, p. 7). In the words of Offe (1984, p. 153): ‘While capitalism cannot co-exist with, neither can it exist without, the welfare state.’ That has recently been termed as ‘Offe’s paradox’ ( Jessop, 1999). Klein criticises such analyses as being too broad in their application and empirically unsound, given the experiences of the 1980s. His argument is that in contrast to undermining political legitimacy, welfare states throughout the 1980s adequately managed any potential crisis of legitimacy because they essentially remained unchanged. However, Klein’s arguments that the British welfare state has essentially remained the same, with some managerial adaptations, is indicative of the broad-brush approach for which he criticises O’Goffe. He does pay some attention to the areas of pensions, health and education, but little is said of income maintenance policies that are now clearly different when compared with the Keynes–Beveridge settlement that shaped benefits around contingencies until the late 1970s. To be fair to Klein the developments in income maintenance policies we have discussed in The Work Connection were only emerging by the early 1990s, but with the benefit of hindsight the trends are discernible in the Fowler ‘consultation’ and reforms of the mid-1980s, and arguably with the

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introduction of FIS more than a decade earlier, though only Jordan appears to have been aware of this in a critical sense. Jessop (1999, p. 348) helps to explain ‘Offe’s paradox’ by suggesting that Offe was analysing an increasingly disjunctive position between the newly emerging neo-liberal accumulation regime and the ‘old’ social mode of economic regulation of the Keynes–Beveridge welfare settlement. The search was on for ‘new forms of [neo-liberal] state (or, alternatively, extra-economic) intervention that might help to resecure conditions for private profitability and the reproduction of labour power’. That is the context within which we have explained developments of the 1980s and 1990s in income maintenance policies that increasingly subsidised labour in low-paid and/or part-time employment. So, ‘Offe’s paradox’ is not so much paradoxical, as it is an observation of the disjunction between the accumulation regime and social mode of economic regulation in the 1970s. His principle remains sound although it needs to be sensitised to historical continuity as well as discontinuity. Post-Jessop, Offe’s aphorism is better expressed as ‘particular forms of capitalist accumulation cannot co-exist with, neither can they exist without, particular forms of welfare state provision’.

Controlling incomes in an age of uncertainty: globalisation, the national state and income maintenance policies in Britain Many commentators observe that globalisation has important implications for the role of nation-states in social and economic matters. In his earlier work, for example, (Jessop, 1994a,b) argues that since the 1980s a process of ‘hollowing out’ of national states has been visible as: Some state capacities are transferred to a growing number of panregional, plurinational, or international bodies with a widening range of powers; others are devolved to restructured local or regional levels of governance in the national state; and yet others are being usurped by emerging horizontal networks of power – local and regional – which by-pass central state and connect localities or regions in several nations. ( Jessop, 1994b, p. 264) That process, Jessop argues, is inextricably linked to the re-regulation of state capacities in the neo-liberal economic order. It is unclear, however, how far he sees the national state as being ‘hollowed out’, for he suggests that, despite those pressures outlined above, the ‘“hollowed

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out” state retains crucial political functions despite the transfer of other activities to other levels of political organisation’ (ibid., p. 274). More specifically – and more importantly for our purposes – Jessop relates those political functions to linkages that states have to make between the processes of the management of globalisation and internationalisation, and issues concerning integration and social cohesion. It is at that juncture that the contemporary policy developments discussed in The Work Connection can be seen as being social modes of economic regulation: whilst having a central role in the stabilisation of economic development, they also have socially integrative functions. In his later work Jessop (1999) suggests that the ‘hollowing out process’ has developed to such an extent that welfare regimes in an ideal-typical sense can be understood as being ‘post-national’ as supranational and local institutions and organisations become increasingly involved in economic and social policy-making. In many ways Giddens’ (1998a) position is similar to Jessop’s, when he asks: ‘Is the nation-state becoming a “fiction” … and government obsolete?’ (ibid., p. 31). His answer: They are not, but their shape is being altered. Globalization ‘pulls away’ from the nation-state in the sense that some powers nations used to possess, including those that underlay Keynesian economic management, have been weakened. However, globalization also ‘pushes down’ – it creates new demands and new possibilities for regenerating local identities. (ibid.) Indeed, rather than the national state’s role diminishing with globalisation processes, Giddens argues that it actually expands as the state takes (or more specifically should take) responsibility for creating the right conditions to foster a nation of ‘responsible risk takers’ through what he calls a ‘social investment state’ (ibid., ch. 4). What we have explained in The Work Connection is that the changing role of the national state in a global context has led to greater levels of control over incomes at entry-level employment. It needs to be emphasised that through ‘new Labour’-variant market workfare, the state has control over the minimum a worker can earn in an hour (NMW) and the minimum income that worker can expect to receive from full-time employment. Currently it is workers with dependent children who are most closely affected by these measures (WFTC/CTC). However, it has been made clear (HM Treasury, 2000) that the intention is to develop

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as soon as practicable an employment tax credit for all adults, not just for those with dependent children. Should this come to pass, the state would have control over the minimum income of everyone in paid employment. Finally, the state continues to control the level of income of those not in paid employment and receiving out-of-work social security benefits (IS, contributory and means-tested JSA). The close control over entry-level incomes is the consequence of ‘new Labour’ learning a valuable lesson through the 1980s and 1990s regarding the nature of wage levels in neo-liberal labour markets. If left free from state intervention, and with little protection from collective bargaining, capitalists in certain occupational sectors pay the very lowest wages they can. Unsurprising to Marxists and even ‘old Labour’ as this must be it merits explication. The tendency has nothing to do with the ‘market value’ of the worker, but everything to do with the extraction of surplus value. Such practices have been encouraged by both Conservative and ‘new Labour’ since the 1980s in the name of increasing wage flexibilities. Of course if it is rigorously implemented, the NMW limits the worst examples of exploitative low wages, but the level is so low that the representatives of capital have made little opposition to its introduction. However, in the context of Beveridgean-inspired out-of-work benefits the encouragement of ‘wage flexibility’ (read ‘low wages’) helped to undermine the very principle – ‘less eligibility’ – that the Conservatives were attempting to strengthen through, for example, the detachment of benefit levels from average earnings. That out-of-work benefit income scraped at the bottom of low wages was particularly apparent to people with dependent children, but became an issue also for single people and childless couples. To restore the principle of ‘less eligibility’ in the new economy and, in fact, to gain some control of it, in-work benefits were required. However, the development of in-work benefits proved to be a double-edged sword. On the one hand, they did increase the net pay of people in low paid work. On the other hand, they gave employers no incentive to increase their wages (the new ‘Speenhamland effect’). Indeed, we have argued in The Work Connection that the aim of in-work benefits was to deliberately engineer a fall in wage levels. The NMW introduced by ‘new Labour’ aimed to overcome the worst excesses of the ‘Speenhamland effect’ by providing a floor below which wages, except for the youngest of workers, should not fall. However, the important point is that with the development of inwork benefits and the NMW, the state has a high degree of control over

182 The Work Connection

the net incomes of those people gaining employment at entry-level wages. The state is now able to decide how much individuals entering work should be able to earn per week, and how much of that should be paid by capital (NMW) and how much of that should be paid through general taxation (WFTC/CTC and eventually the Employment Tax). Moreover, the state has now regained full control of ‘less eligibility’ (the distance between in-work and out-of-work income) because as well as setting out-of-work benefit levels it can manipulate in-work minimum incomes. Now they may not have the arcane simplicity of the workhouse test, nevertheless these regulators do control that area of the economy where waged employment meets dependency. What is more, these are fiscal regulators of the Treasury operated by Inland Revenue, rather than the ‘benefit people’ from the elites who make social security policy, who might otherwise become confused by considerations of common human needs. To be more generous, such a mode of regulation could be used positively, and indeed should be, given the current government’s commitment to eradicating child poverty. Through the various in-work and out-of-work mechanisms the incomes of both the employed and non-employed could be raised while maintaining a constant level of financial ‘less eligibility’. Raising the incomes of both workers and non-workers would certainly demonstrate a commitment to social justice in the so-called ‘Third Way’, but would also maintain a financial incentive to work. However, it is equally possible, perhaps more likely, that such mechanisms will be used in a less positive manner. We have already witnessed struggles to increase the NMW: the government’s argument being that it should only be increased if the economic circumstances are such that an increase would not undermine economic development. Furthermore, we have argued elsewhere (Grover and Stewart, 2000) that able-bodied people on already inadequate out-of-work benefits are being left to flounder on such benefits as the government’s focus on ‘making work pay’ precludes major increases in the value of the main out-of-work means-tested benefits. Such observations, as we have argued in The Work Connection, demonstrate more of a commitment to the free-market side of the ‘Third Way’ marriage between freemarket capitalism and social justice. Not even in the heady days of Keynesian planning did the state have so much control over the wages of the poorest paid and the gap between their income and that of the non-employed. The irony is, of course, that the current extent of state control over incomes was the consequence of the shift to neo-liberalism that was supposed to reduce

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Figure 8.1 ‘I can’t afford to make idle people merry. You’ll have to work for this.’

184 The Work Connection

such interferences in market mechanisms. The regulation of neo-liberal accumulation has involved a greater level of control of entry-level wages than that of the previous Keynesian paradigm. As we have shown, that control is part of the regulation of capital accumulation in Britain’s variant form of neo-liberalism. Moreover, despite its quite obvious interventions in market mechanisms such regulation is not seen as a ‘burden’ to the accumulation process, but an integral part of it. Whereas the state may have lost the ability to control the level of employment (and there is some doubt that it ever had that ability), through Keynesian demand-management it has introduced and strengthened mechanisms that it hopes will maintain the supply of labour. That is important because, as we have seen, the supply of labour is held to be one of the most important factors in managing the demand for labour and, consequently, helps keep in check wage demands and inflationary pressures: the ‘reserve army’ effect. Those observation do indeed suggest a continuing, even strengthened role for the British state’s neo-liberal welfare regime. Power in that particular instance is not being divested to supra-national or local levels (although, of course, particular aspects of the New Deals are enforced according to local labour market conditions). Power is being increasingly centralised hierarchically within the most important ministries for internal affairs: starting at the bottom – the Department of Social Security, the Department of Trade and Industry, the Department for Education and Employment, the Inland Revenue and most importantly, the Treasury (see HM Treasury, 1997, 1998, 1999a,b, 2000; Taylor, 1998).

Pragmatism, rationalism and the regulation of The Work Connection The discussion in the previous section is closely related to the issue of pragmatism in social policy analysis. British social policy debates often explicitly or implicitly assume that policies are developed as a pragmatic response to circumstances. Most recently such arguments have been made in relation to the ‘welfare reform’ programme of ‘new Labour’ (for example, Driver and Martell, 2000; Powell, 2000). Powell argues that ‘new Labour’s’ approach to social policy can be described as ‘Pragmatism and Populist’. Powell observes a lack of ideological clarity in ‘new Labour’s’ approach which for him means their welfare strategy can be understood as ‘what counts is what works’. Less explicit arguments are often made in historical analyses of social policy developments. So, for

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example, the development of Speenhamland-style allowances-in-aid of wages is often interpreted as a pragmatic response to long- and shortterm changes and pressures facing the labouring classes. Similarly, the Beveridge developments are often presented as a pragmatic response to the inadequate and fragmented provision of welfare benefits and services existing before the Second World War, which could only be ‘solved’ under the pressure of total war and its aftermath. On one level such analyses are fine: policy developments are usually a response to profound economic and social change. However, on another level such analyses are shallow, for while policy-makers may be responding to a particular set of circumstances, their response, certainly in the case of contemporary income maintenance policies, is clearly structured through capitalism and patriarchy. The Work Connection has shown that such policies do not just take any form, but are designed in the hope of having particular outcomes that will buttress capitalist and patriarchal concerns, most notably the maintenance of labour and familial discipline through the (re)commodification of labour and support for the patriarchal family. Furthermore, the ‘pragmatic’ argument gives the impression that policy-makers are only reacting to changing socio-economic circumstances. However, developing income maintenance policy is as much concerned with longer-term issues and stability as it is with a reaction to a particular set of circumstances. So, just as the Keynes–Beveridge settlement was a long-term plan for social and economic reconstruction in a postwar world they had to try somehow to envisage, the Conservative and ‘new Labour’ variants of market workfare can also be seen as longer-term policies that it is hoped will stabilise Britain’s adoption of neo-liberalism through ‘putting work at the centre of the welfare state’ (Brown, 1999a, p. 1). The Chancellor argues the ‘best form of welfare is work’ (Brown, 1999d, p. 4), reflecting the freemarketeers’ belief that ‘the source of wealth (or welfare) [is] work, applied through the division of labour, guided by the market’ (Harris [one of main architects of what became ‘Thatcherism’], 1988, p. 14).

But does it work? There are of course no guaranteed outcomes. The developments discussed in The Work Connection are essentially premised upon utilitarian ideas about economic rationality that have helped structure income maintenance policies for at least the last 200 years. The idea is that individuals react rationally to economic stimuli and hence providing

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greater incentives to work will encourage more people to enter paid employment. However, as we argued in Chapter 4, the evidence from the NDLP indicates that rational assumptions about people’s motives to work are misplaced. The NDLP has encountered difficulties in recruiting lone mothers on a purely voluntary basis and it is arguable that the success rate of the NDLP will not increase even with the compulsion of the SWFG. The work of Duncan and Edwards (1999; also Edwards and Duncan, 1996) helps to explain the poor response to the NDLP. They show that lone mothers’ decision whether or not to undertake paid work is not so much constructed through economic rationality, but through what they call ‘gendered moral rationalities’ (GMRs). In that particular context GMRs relate to the way in which lone mothers understand their identity as a duality of ‘mother’ and ‘worker’ (Edwards and Duncan, 1996, p. 120). Their decision about taking paid employment is reached in the context of their understanding of what being a ‘good mother’ involves. For some lone mothers that means not doing any paid employment, primacy being given ‘to the moral benefit of physically caring for their children themselves over the financial benefits of undertaking paid employment’ (ibid.). For other lone mothers paid employment is seen as a crucial aspect of motherhood, ‘part of their moral responsibilities towards their children’ (ibid.). The findings of Duncan and Edwards creates further dilemmas for policy-makers, for there is an obvious tension between GMRs and the expectation that all those (including lone mothers) who can work in the formal economy will do so. The politicians solve their problem by means of bureaucratic blanket decisions on who should be seeking employment, and in a sense that is understandable when the social scientists leave us with no clear indication as to why lone parents make different choices. We showed in Chapter 4 the importance attached by government, and policy elites, to making sure that lone mothers were in paid employment – for the sake of their children we are led to believe. With such a puritanical attitude towards the virtues of employment, it seems unlikely that policy-makers will accept the rational choice of lone mothers to forgo paid work and look after their children. Does only one kind of reasoning count as rational – the one which accepts the financial stimulus to enter the formal economy? The future for lone parents is increased pressure – financially, administrative and moral – to go out to work. What goes for lone parents also goes for other groups on out-of-work benefits, in particular disabled people. In the free market no rationality except financial can be allowed to govern behaviour (see

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Blunkett, 2000, the Secretary of State for Education and Employment, for an outline of a behaviourist’s economic-rationality argument for ‘new Labour’ policies). For one, Campbell does not believe the massive labour market reforms of ‘new Labour’ will lead to a net gain in new jobs (Campbell, 2000, p. 40). The effects ‘are likely to “redistribute” employment opportunities towards the excluded rather than increase the total number of opportunities available’. In the same edited collection on Policy Responses to Social Exclusion, a separate chapter handles ‘poverty’ because, one presumes, ‘social exclusion’ is thought of as being tackled separately through, for example, benefits programmes and labour market policies. We have argued that, as understood by today’s neo-liberal economists, the accumulation regime is to be regulated by initiatives in whatever areas of policy or institutions are appropriate. In the same edited collection, Burden’s conclusion to his chapter on ‘poverty’ is that because ‘new Labour’s’ project does not address the inequalities which cause social deprivation it cannot be socially inclusive. However, as his example of a socially inclusive society is Britain in the Second World War, one wonders what the rest of Europe makes of enduring a terror regime for the sake of our sense of community. The whole project from New Deals and ‘tax credits’ to NMW is considered minimally redistributive, or as in the case of various children allowances and the NCS to reduce child poverty, as having so long a time-scale as to be meaningless (Burden, 2000, p. 56). The link to labour market policies is not made robustly, although Burden concludes that we are moving to a ‘wage earners’ welfare state’ (ibid.). Barnes and Prior (2000), on the other hand, are under no illusion that social security is less about combating poverty than getting people into work: ‘the encouragement to find work is placed at the centre of thinking on the future of public welfare and the principle is applied to groups of people previously considered to be firmly outside the labour market’ (Barnes and Prior, 2000, p. 60). Through the whole project, which one can characterise as an active labour market project, with its SWFG, welfare responsibility is being transferred from the state to the citizen, ‘whilst incorporating the private lives of citizens in the aims and objectives of the state’ (ibid.). Returning to Burden’s view that the current ‘new Labour’ project is insufficiently redistributive to promote social justice, George and Wilding believe the ‘problem’ of family and child poverty (surely an element in social justice) is not difficult to solve, just expensive. Yet they claim the measures to achieve this just redistribution are ‘full

188 The Work Connection

employment, the provision of day care services that allow women with young children to engage in paid work, a guaranteed minimum wage and a system of child benefit that makes a realistic contribution to the costs of children’ (George and Wilding, 1999, p. 210). Apart from ‘full employment’ this list could be rewritten as NCS, WFTC, NMW, CTC. Barnes and Prior are correct. The list does not add up to redistribution because that is far from its purpose and the benefit rates confirm that. However, on George and Wilding’s terms, we do not have and will not have full employment because of flexible labour market policies. George and Wilding accept that social security is now seen by government as integrated with the economics of labour market regulation. This places them in a difficult philosophical position when arguing for prescriptive programmes to solve social problems couched in terms of common human needs, such as family and child poverty. It sounds a flippant Ebenezer Scrooge response, but what can the market know or care of such things? That might be sound in terms of neo-liberal economic theory; however, we have shown that politicians, activists and academic researchers each expect income support policies to promote social and moral purposes. If the agency of claimants and potential claimants can be affected by the administration of the benefits system, then income support policies must be assumed to have social and moral purposes. Rather in the style of the case for family allowances, every kind of intention and purpose was loaded onto paying 5 shillings per child per week. Can we expect our vastly complicated, hugely expensive and widely penetrating income support system which is supposed to relieve poverty, to also carry what amount to social control functions? Our argument in The Work Connection has been somewhat different. Others may promote the possibilities of a moralistic social control income maintenance system; we say that as it is about transferring money in a capitalist accumulation regime, it is part of the social mode of economic regulation. The social mode of economic regulation has to be judged separately as to its appropriateness and effectiveness. Lilley and Willetts began the radical neo-liberal reform of social security as an integral aspect of supply side economics. It was like a resurfaced trunk road. ‘New Labour’ turned it into a motorway. ‘New Labour’ have learnt the lessons of the new economics and applied them with a vigour that would impress even Edwin Chadwick. To continue the nineteeth-century allusion, but change the metaphor, those two neo-liberal Conservatives must wonder how, not just their clothes were stolen by ‘new Labour’ whilst bathing, but the whole damned river!

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Back to the future? Income maintenance in the twenty-first century Powell (2000) observes that much of ‘new Labour’s’ discourse can be found in the Labour-sponsored Commission on Social Justice Report (Borrie, 1994). The Commission suggested that there were three options for the future of Britain: Investors’ Britain, Deregulators’ Britain and Levellers’ Britain (ibid., ch. 3). Investors – now extended in Blair’s (1998) and Giddens’ (1998a) version of the ‘Third Way’ – believe in combining the ‘ethics of community with the dynamics of a market economy’ (Borrie, 1994, p. 95). Investors envisage an inclusive strategy that, through focusing upon security for individuals, will enable them to embrace and adapt to changing economic fortunes. That approach was favoured by the Commission on Social Justice. In contrast, Deregulators ‘dream of a future in which dynamic entrepreneurs, unshackled by employment laws or social responsibilities, create new businesses and open up new markets’ (ibid.). For the Levellers the concern is the: distribution of wealth to the neglect of its production; they develop policies for social justice independent of the economy … Theirs is a strategy for social justice based primarily on redistributing wealth and incomes, rather than trying to increase opportunities and compete in world markets. (ibid., p. 96) The identification of those three possible strategies for Britain indicates different ‘welfare futures’ according to the approach taken. In particular, the Deregulators and Investors are compared. A Deregulators’ future would see unemployment and poverty addressed through encouraging people to take low-paid employment which is then topped-up by means-tested benefits (ibid., p. 228). In contrast, Investors would want to see families enabled to work their way out of poverty, supported by a contributory social insurance scheme to relieve need in periods of unemployment and sickness (ibid., p. 229). In that scenario meanstested benefits are condemned as the ‘Deregulators’ panacea’ (ibid., p. 8), with FC in the longer term being ‘relegated to a residual role’, as the Commission’s suggestions for a minimum wage and part-time unemployment benefits come on stream. We raise these issues because, whilst Powell correctly observes that much of ‘new Labour’s’ discourse is just the Investors’ future from the

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Commission on Social Justice Report, their actual income maintenance programme for the able-bodied looks suspiciously like that of the Deregulators’ future – with the one exception of the introduction of the NMW (Powell, 2000). The social insurance system has not been, and there is no indication that it will be, overhauled to meet changed labour market conditions and familial forms. The ‘unthinkable’ thought Frank Field probably had was that it would be. On the contrary, national insurance is condemned by the Treasury (1997, p. 26) as a ‘heavy burden on low paid workers and risks distorting the labour market’. Meanwhile, means-tested benefits (renamed ‘tax credits’) – the Deregulators’ panacea – for low-paid and/or part-time workers go from strength to strength. The last available statistics for Family Credit showed 784 000 families in receipt of it (Department of Social Security, 1999, p. 1). Six months later the February 2000 statistics for Working Families Tax Credit showed 1 026 000 families receiving either WFTC or FC (because of transitional arrangements), an increase in the number of recipient families of about one-third. The future of income maintenance is means-tested in-work payments (whether through the pay packet or wallet). The vision of Beveridge and many liberal social policy commentators of a non-stigmatised, inclusive income maintenance policy is condemned as ‘old-fashioned’ and paternalistic, belonging to a bygone age: stifling economic prosperity and encouraging ‘deviant’ familial formations. The elements of Beveridge that might be kept will be those that can be used to further discipline non-employed people into low-paid employment. The new millennium for social security policy lies in the principle of allowances-in-aid of wages, so infamously symbolised by generations of political economists in what they liked to think of as ‘the Speenhamland system’. But whilst the social security policy-making elites decry Speenhamland, its spectre has had to be exorcised from their project for two related reasons. First, because an in-work allowance system is being used to support ‘less eligibility’ it needs to be shown that contemporary in-work transfers have overcome those phenomena – idleness and ‘bastardy’ (lone motherhood) – that Speenhamland was said to encourage (a very difficult job given the ‘idle, thieving bastards’ characterisation of the contemporary British ‘underclass’; Bagguley and Mann, 1992). Second, the bad economic effects of wage subsidies on employers – the encouragement to lower wages and hourly or daily hiring – are no longer believed to be problematic. Such effects are now explained as part of the flexibility needed for Britain’s economic survival. The state now actively encourages low wages through the

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subsidisation of employers’ wage costs and increased competition for the available employment through what we have termed market workfare. The ‘Speenhamland effect’ is no longer a problem, but a crucial regulatory device in determining the number of people to move from unemployment to employment without inflation.

Notes 1

Introduction

1. We prefer to use the term ‘patriarchal capitalism’ as a critique of regulation theory. The Marxist origins of regulation theory led to an assumption that all social relations are moulded by the economic relations of capitalism. However, in now familiar arguments it is clear that capitalist societies are also reliant upon particular forms of gender relations that help to structure labour markets and the domestic division of labour. In other words, any approach that attempts to explain the emergence of neo-liberal flexibilities that does not include gender will be limited because we know that employers use males and females to provide different forms of flexibilities (for example, Beechy and Perkins, 1987) and we know that male-dominated organised labour has often united to segregate and exclude women from certain forms (better paid and more secure) of employment (Walby, 1986). Such strategies clearly benefit both capital and men.

2 The Conservatives, Neo-Liberalism and Social Security Policy 1. Figures extrapolated from Land, 1994, Table 6.1, p. 105; Employment Department 1987, Table 1.1, 1991a, Table 1.1, 1996a, Table 1.1. 2. The substitution and displacement effects were challenged by academic economists. For example, Professor Richard Layard of the LSE submitted a memorandum (Employment Committee, 1994, p. 22) arguing that such ideas were based upon the ‘lump-of-labour fallacy’: that there is only a certain amount of employment available in the economy at one time and so if one particular person gets a job another person will go without. 3. David Willetts is an important figure in the study of in-work benefits because he is credited with responsibility for guiding Family Credit through the Social Security Act 1986 (personal communication). 4. That is not to argue that social insurance enjoys support throughout the policy community. Toynbee (1999), for example, argues that ‘National Insurance was always something of a con’ and essentially advocates extended means-testing. 5. Civil servant C, for instance, told us: ‘I suppose it was really probably [sic, not] until Mr Lilley arrived [at the Department of Social Security] – we had not really seen ourselves as having a strong interest in labour market policies’. 6. Since 1992 the definition of full-time working for FC purposes has been 16 hours per week.

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Notes 193

3

‘New Labour’ and the Modernisation of Welfare

1. In 1998, for example, it was widely reported (although he denied it) that the governor of the Bank of England had said that unemployment in the north-east was a price that would have to be paid to reduce inflationary pressures in the south-east because of increases in the interest rate. 2. See also the comments of Gordon Brown in The Guardian, 7 May 1997. 3. The ‘golden rule that over the economic cycle Government only borrows to invest, and the sustainable investment rule that public debt as a proportion of GDP should over the economic cycle be held at a prudent and stable level’ (Blair, 1998, p. 8). 4. When we are referring to ‘employment’ or ‘work’ in this chapter we are referring to paid employment in the formal economy. 5. The flag-ship morning news magazine programme of BBC Radio on which the ‘great issues of the day’ are aired by the British political élite. 6. That notion is apparently supported by the all-party Social Security Committee (1998a, para. 22) that notes: ‘A complementary tax and benefit system is essential if welfare-to-work programmes are to be successful and if a pro-work culture change is to be widely accepted’ (emphasis added). The message is clear: economically inactive people currently have an ‘anti-work’ culture. 7. There are no group exceptions (for example, for severely disabled people or carers with children under the age of 5). The reason for that is ‘new Labour’s’ wish to ‘treat people as individuals, not simply as categories’, while it was held that blanket exclusions would result in groups of claimants being ‘excluded from the possibility of working in the future’ (Andrew Smith, Employment Minister, quoted in Allirajah, 1999, p. 4). 8. A new claimant who fails without ‘good cause’ to attend three interviews will have her/his claim disallowed. An existing claimant failing to attend three interviews will have her/his claim terminated (see Allirajah, 1999). 9. The Chancellor of the Exchequer (Brown, 1999c, p. 6) has argued how ‘we are learning a great deal from the USA. From your welfare to work programme, and your community colleges, raising the roof on ambition in our country …’ 10. The Wind Fall tax was levied on the privatised utilities which were undervalued at their sell-off and subsequently notched-up excessive profits from customers and paid massive dividends to shareholders. We now have the ironic spectacle of those utilities which paid the levy enjoying the benefits of the subsidised labour of work-welfare conscripts. 11. To overcome the shortage of childcare the government have proposed supply and demand measures. On the supply-side the government have announced that money will made available for childcare provision, mainly for 5–14-year-olds, through the New Opportunities Fund and Out of School Childcare Initiative (OSCI) (see Daycare Trust, 1998a). On the demand side the government are to introduce a cash transference to help with childcare costs: the Childcare Tax Credits (CTC) will be paid as part of the WFTC (discussed below). As with the Childcare Disregard it replaces, CTC is payable for registered childcare only and those families earning up to £17 000 a year with one child should receive some help with their childcare costs. Those

194 Notes

12.

13.

14.

15.

16. 17.

with two or more children requiring childcare should receive some help until their earnings rise above £30 000 (Daycare Trust, 1998b). The lowest paid should receive 70 per cent of their childcare costs through the CTC, up to maximum of £70 per week for those with one child, and £105 per week for those with more than one child. For those aged 25 and over who have been unemployed for more than two years, a similar system will operate whereby employers are offered an incentive of £75 per week to employ a previously unemployed person. The Budget in March 2000 announced the extension of New Deal to all those unemployed for over 6 months. Those aged 25 and over will be offered one of four options: employment, training, work experience or self-employment. In 1999 the government developed twelve ‘Intensive Gateway pilots … to prepare young people more effectively for work’ (Chancellor of the Exchequer, 1999, para. 4.21). Those pilots aimed to show ‘all young people in the New Deal … that there is no option of continuing on benefits’ (ibid.). The increased intensification of the Gateway period is in order to provide greater help with job search and ‘skills’ learning (for example, punctuality, communications and team working). The periods of suspension started at two weeks for a first refusal of New Deal placement and four weeks for refusal thereafter. However, in September 1999 the Chancellor of the Exchequer ‘told Britain’s jobless and work-shy that there was no excuse for remaining on benefits’ (The Times, 7 September 1999). Under proposals to be in place before the end of 1999 The Times reported that young people ‘who decline their first offer … will lose two weeks’ benefit, on the second occasion lose four weeks’ benefit and on a third they will lose 26 weeks of benefit’ (ibid.). That figure includes the £4.5 billion it is estimated that the WFTC will cost per annum over the lifetime of the first ‘new Labour’ government and the £3.2 billion that the New Deals have been allocated through the Windfall Tax. The ideas of the ‘new Labour’ government have been influenced by the work of Richard Layard (Finn, 1997, p. 11). Shortly after the election of ‘new Labour’, Layard was ‘recruited’ as ‘a key figure in developing the Government’s welfare to work policy’ (The Guardian, 26 June 1997). He is a firm believer in time-limited social security benefits (Layard and Philpott, 1991, p. 6; Layard and Nickell, 1992, p. 36), as well as having tight conditional clauses controlling access to benefits (Jackman, Layard and Piassardes, 1984a, 1984b) and state-guaranteed employment for the unemployed (Layard, 1985, pp. 11–13; Employment Committee, 1994, question 168). Essentially that employment is best created when the market is free from government interference (Blair, 1998, p. 8). What exactly is meant by the term ‘employability’ is difficult to grasp. It is apparently concerned with ‘job readiness’ which in turn is said to relate to the ‘skills’ and ‘experience’ of economically inactive people (Education and Employment Committee, 1997, question 76). How though, will it be known if people have the attributes of someone who is employable? The answer is quite simple, they will be able to get and keep employment (cf. ibid., questions 75 and 85). Such circular arguments make the effects of the New Deal difficult to measure. If the programme is effective then conscripts will be job-ready, but they can only demonstrate their job-readiness

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18.

19. 20. 21.

22.

23. 24. 25.

by being in employment. The danger is that those who remain unemployed become seen as being unemployable. A week into ‘new Labour’s’ government, The Guardian (10 May 1997) had the front page headline, ‘Tax plan to help jobless’, in which it was reported that the Chancellor (Gordon Brown) would use his first budget ‘to introduce a US-style tax credit scheme to give unemployed people an incentive to get back to work’. While the report was premature in its time-tabling of the tax credit (it was announced in the second ‘new Labour’ budget in 1998), its substantive content was correct: ‘new Labour’ did indeed have plans to introduce such a credit. It was over this particular issue that the government was challenged by its own backbenchers (Hansard, 1999). The figure was calculated by the House of Commons Library. In opposition Labour had been keen to defend the fact that Family Income Supplement (the precursor of Family Credit) was paid to the mother at post offices rather than through the pay packet. In the debate on the introduction of Family Credit it was argued, by Field himself, that the proposal to pay FC through the wage packet ignored the fact that women are more likely to be poorer than men (Frank Field MP, Hansard, 1985a, col. 226), and made an institutional assumption that women are the dependants of men ( Jo Richardson MP, ibid., col. 245). It was said that Norman Fowler MP wanted FC paid through wages because as Secretary of State for Health he had been confronted by protesting hospital staff waving pay slips at him, which did not show that they were so poor they were separately receiving Family Income Supplement! Presumably he thought pay slips with FIS on them would show low paid workers to be rich beyond their wildest imaginings. In the 1999 debate, about 70 backbench Labour MPs opposed their own government over precisely this issue, but the government won. Eric Pickles MP, has argued that: ‘the government will reward employers who pay low wages, relieve the pressure to improve productivity and remove the possibility of real wage increases’ (http:www.publications.parliament.uk/pa/cm199899/cmstand/d/st990202/am/90202s09.htm). Jacqui Lait MP, has argued: ‘When the Conservative party was in government Conservative Members were attacked time and again by the Opposition for encouraging low-pay policies through what they called the generosity of our family credit, which they said was allowing employers to pay low wages. The impact of the Bill will be precisely the same, even with a minimum wage of £3.60 … Currently many companies pay more than £3.60 an hour, but under the Bill they will have no incentive to pay a penny more because taxpayers will pay the extra … The culture of low pay, criticised by the Labour Party when in opposition will be reinforced’ (http:www.publications.parliament.uk/pa/cm199899/cmstand/d/st990204/am/90202s03.htm). More recently Michael Portillo MP has announced that the Conservatives would not seek to abolish the NMW if elected. Interviewed, 18 January 1997. Tony Blair speaking at a welfare reform roadshow in Luton said that the NMW ‘would make work worthwhile for people torn between benefits and low pay’ (The Guardian, 29 January 1998).

196 Notes 26. The NCS, however, is to be market-led. The government have made available funds (mainly from the National Lottery) to develop out-of-school care, but essentially their strategy is to let the market create childcare solutions through the payment of the CTC (Grover, 1999).

4

Role Models and Traditional Moralities

1. Indeed, it is possible to argue that much Fabian reformist social policy commentary has also become framed by ‘underclass’ discourse (see Grover, forthcoming 2002). Gilbert (1992), for example, in the context of Charles Murray’s work argues: ‘one is tempted to conclude … conservative analysis of public welfare as a strong disincentive to work, once viewed as hearsay by social welfare advocates, has achieved the status of conventional wisdom in the field’. 2. However, OPB and the Income Support Lone Parent Premium were finally abolished in 1997. The argument for their abolition was that they discriminated in favour of lone motherhood, compared to married couples (Peter Lilley MP, in Hansard, 1996, col. 195). The financial interests of children of lone mothers in such arguments were seen as being relative to those of the children of two-parent families: ‘The costs … of having children are the same for couples as they are for single people’ (Kenneth Clarke MP, in Hansard, 1995c, col. 1060). 3. The abolition of OPB and the Lone Parent Premium by ‘new Labour’ was to prove controversial. It was proposed when Peter Lilley MP was Secretary of State for Social Security, and at the time was heavily criticised by Harriet Harman MP as Shadow Social Security Minister. It was, however, Harman as Secretary of State for Social Security who oversaw its abolition once ‘new Labour’ was in power. Harman was derided for that apparent contradiction in stance on benefits specifically for lone parents. More importantly, and as was highlighted in parliament (Hansard, 1997d, cols. 1034–5) by Liberal Democrat MP, Steve Webb, particularly the abolition of OPB contradicted the aims of the government’s ‘welfare to work-welfare’ policy of getting lone mothers into employment through the provision of more generous work incentives. 4. This conservative argument was advanced by the arch-right wing foxhunting academic Roger Scruton against an account much the same as our own offered by Professor Ruth Lister (one-time director of CPAG) on BBC Radio 4, Start the Week (28.2.2000). The Home Office Minister, Paul Boetang, parried with the argument for equality of burden.

5

Taming ‘Barbarians’

1. The early 1980s were marked by widespread violent disorder. Over the weekend of 10–12 April 1981 disorder was witnessed in Brixton. Then in July 1981 disorder was reported in numerous cities and towns. The Times reported the following locations as witnessing various degrees of disorder: Southall (4 July); Toxteth (6 and 7 July); Wood Green (8 July); Moss Side, Rusholme and

Notes 197

2.

3.

4.

5. 6.

7.

8.

9. 10.

11. 12.

13.

Clayton (9 July); Moss Side, Woolwich, Lewisham, Deptford, Stoke Newington, Balham, Dalston, Fulham (10 July); Brixton, Southall, Dalston, Stoke Newington, Hackney, Hounslow, Clapham, Streatham, Acton, Slough, Birmingham, Reading, Liverpool, Hull, Preston, Ellesmere Port, Cantril Farm (11 July); Brixton, Walthamstow, Battersea, Notting Hill, High Wycombe, Handsworth, Huddersfield, Leicester, Blackburn, Blackpool, Bradford, Cirencester, Crewe, Derby, Gloucester, Halifax, Hull, Leeds (13 July); Leicester, Huddersfield, Liverpool, Derby, Nottingham (14 July); Brixton (16 July). The view of the CPRS extended the view of young people as being at that time an ‘unexploded time bomb’ (Mungham 1982, pp. 33–4). Mungham quotes headlines of contemporary newspapers, for example, ‘100,000 a year join “time bomb of young jobless” professor warns’ (The Guardian, 10 July 1980); ‘Unemployed a “social time bomb”’ (The Guardian, 10 August 1980) and ‘“Mass Revolt” warning by union chief’ (Daily Telegraph, 28 August 1980). Although he was sacked shortly afterwards as Secretary of State for Employment ‘in a shift that appeared to signal the full ascendancy of the monetarists over the “wets” in the Conservative Party’ (Finn, 1987, p. 142). Prior was replaced by Norman Tebbitt, MP. The subsidy was £15 per week for twelve months if the employer paid the young person (under 18) less than £40 per week and £7.50 per week if they paid between £40 and £45 per week. Although it soon became apparent that the government were unable to fulfil this guarantee. Indeed, the Conservatives were successful in reducing young people’s wage levels in comparison with adult wages, especially after young workers were withdrawn from the jurisdiction of Wages Council in 1988. Maclagan (1993, p. 1), for example notes: ‘Each year from 1988 to 1991 saw increases in adult wages. This means that even while youth wages were still rising, the gap between youth and adult wages was widening.’ Civil servant B, for instance, told us that the idea of an in-work benefit for single people and childless couples emerged at the time of the changes actuated by the Fowler reforms. In 1991 disorder was witnessed at Ely, Cardiff; Blackbird Leys, Oxford; Handsworth, Birmingham; Meadowell Farm and Rye Hill, Newcastleupon-Tyne. The comments of Campbell refer to the Gulf War and the war in the former Yugoslavia. In 1971 never-married lone mothers accounted for 1 per cent of all families with dependent children. By 1992 this figure had increased to 7 per cent (Office of Population Censuses and Surveys, 1994, Table 2.23). Particularly through the development of Family Credit. It was also argued that working class women preferred to have children as it was more profitable than employment in low-paid work (Grover, forthcoming 2002). So, for example, Lilley (1995, p. 25) claimed: ‘it is often argued that benefits for lone parenthood make it financially more rewarding than marriage. In fact benefits for lone parents have not outstripped benefits for couples. Between 1979 and 1992, the real increase in benefits for lone parents was 13% whereas the real increase in benefits for couples was 18%. Average

198 Notes take-home pay has increased by 40% since 1979. So, at least for the average person, lone parenthood has not become more rewarding relative to working or being married to someone on average earnings.’ 14. That sort of argument was reflected in the government’s White Paper – No More Excuses – on young offenders (Secretary of State for the Home Department, 1997). The White Paper notes how ‘allowing young people to drift into a life of crime undermines their welfare and denies them the opportunity to develop into fully contributing members of society’ (ibid., p. 3). Criminal activity in that interpretation is seen as a barrier to young men gaining employment. At other points in the White Paper in the context of peer group pressure, the problem is said to be one of young men being starved of those opportunities that would help them to ‘grow out’ of criminal activity, in particular employment and partnering (ibid., para. 1.10). The White Paper goes on to note how the government is aiming to tackle the criminal activity of young men. Those measure include support for families, ‘including assistance for single parents to get off benefits and return to work’ (ibid., para. 3.4) and, more importantly, for our purposes at this point, ‘through the welfare to work New Deal for unemployed 18–24 year olds’ (ibid.). 15. One assumes that Field’s thinking is along the essentially utilitarian lines of Charles Murray (1990) and Lilley (1995) that lone motherhood supported through social security benefits is a more palatable option than low-paid work (see Grover, forthcoming, 2002). However, Field (1995, pp. 10–11) argues that divorce and separation have been encouraged through the development of Family Credit. 16. ‘New Labour’ have abolished the ETU. We have been informed by the Department of Social Security that the reason for that action was because the NMW provides the work incentive that ETU previously represented. However, that argument is somewhat undermined when we learn that ‘new Labour’ have longer-term plans to introduce an Employment Tax credit, ‘paid through the wage packet, which would be available to households without children as well as households with children’ (Brown, 1999d, pp. 5–6). Essentially ‘new Labour’ do not have any objections to a ‘tax credit’ for single people and childless couples similar to that of the ETU developed by the Conservatives. In the short term employers’ costs of young workers are directly subsidised through NDYP. In the longer term they will also be indirectly subsidised through the Employment Tax Credit paid to employees.

6

Speenhamland

1. In the debate on Whitbread’s bill, members had pointed out that magistrates already had the power to set minimum wages: Vansittart for example, see Hansard, 1796, col. 713. 2. The moral economy declined slowly as the power of landed agrarian interests gave way to the burgeoning entrepreneurial capitalists of the ‘Manchester School’ culminating in the repeal of the Corn Laws in 1846 (Deane, 1965, pp. 205–13; Mathias, 1969, p. 275). On the decline of the moral economy in general see Thompson, 1993, ch. 5.

Notes 199 3.

Just 45 years after Malthus, Charles Dickens in A Christmas Carol (1843) puts into the mouth of its hero, the stockbroker Ebenezer Scrooge, one of literature’s sharpest explications of classical liberal economics. The book sold 15 000 copies in its first year; has constantly been in print; has inspired numerous dramatic interpretations including at least three motion picture versions one or the other of which is screened every Christmas – in other words the English-speaking world can hardly not know the following exchange: ‘Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.’ ‘Are there no prisons?’ asked Scrooge. ‘Plenty of prisons.’ said the gentleman, laying down the pen again. ‘And the Union workhouses?’ demanded Scrooge. ‘Are they still in operation?’ ‘They are. Still,’ returned the gentleman, ‘I wish I could say they were not.’ ‘The Treadmill and the Poor Law are in full vigour, then?’ said Scrooge. ‘Both very busy, sir.’ ‘Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course,’ said Scrooge. ‘I’m very glad to hear it … I don’t make merry myself at Christmas, and I can’t afford to make idle people merry. I help to support the establishments I have mentioned: they cost enough: and those who are badly off must go there.’ ‘Many can’t go there; and many would rather die.’ ‘If they would rather die,’ said Scrooge, ‘they had better do it, and decrease the surplus population. Besides – excuse me – I don’t know that.’ ‘But you might know it,’ observed the gentleman. ‘It’s not my business,’ Scrooge returned. ‘It’s enough for a man to understand his own business, and not to interfere with other people’s. Mine occupies me constantly.’

4.

5.

Besides his firm grasp of Malthus on population, Scrooge had also digested Bentham on less eligibility, which we shall discuss shortly. See Golby (1981). Himmelfarb (1984, p. 51), argues that Adam Smith was ‘the first to offer a systematic, comprehensive rationale for high wages’. Indeed, Smith (1869, p. 86) observes how the ‘liberal reward of labour … increases the industry of the common people. The wages of labour are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives.’ He goes on: ‘In cheap years, it is pretended, workmen are generally more idle, and in dear ones more industrious than ordinary. A plentiful subsistence therefore, it has been concluded, relaxes, and a scanty one quickens, their industry. That a little more plenty than ordinary may render some workmen idle, cannot well be doubted; but that it should have this effect upon the greater part, or that men in general should work better when they are ill fed than when they are well fed … seems not very probable’ (1869, p. 87). For example: ‘The greater number of our out-door paupers are worthless people … Allowance men will not work. It makes them idle, lazy, fraudulent and worthless’ (Checkland and Checkland, 1974, pp. 117, 149).

200 Notes 6. It is interesting to draw a comparison with Whitbread’s characterisation of a minimum wage some 200 years earlier as ‘rescu[ing] the labouring poor from a state of slavish dependence’ (Hansard, 1796, col. 704). The Commissioners said of the allowance system that the labourer ‘has all a slave’s security for subsistence without his liability to punishment’, and we should remind ourselves that real slavery in the colonies had only recently been outlawed (Checkland and Checkland, 1974, p. 132). 7. Admittedly the minimum wage was a Roosevelt New Deal policy, but it has survived and prospered through decades of US anti-welfare, neo-liberal economic policy.

7

Family Allowances to Child Benefit

1. It should not be thought Beveridge was alone or at odds with the political elites of his time in this eugenic attitude to ‘race’ and a racialised notion of Britishness. As just one example, Neville Chamberlain when Chancellor in 1936: justified a £10 increase in the tax allowance for the second and subsequent children by saying that he saw a time not too far distant ‘when countries of the British Empire will be crying out for more citizens of the right breed, and when we in this country shall not be able to supply the demand. I think that if today we can give a little help to those who are carrying on the race the money will not be wasted’. (See Hansard, 1936, vol. 300, col. 1634; quoted in Hall et al., 1975, pp. 170–2) Tax allowances were the whole extent of senior Conservative Party members and the National Government’s interest in support for children. It should be noted, as the TUC continually pointed out, that this gave support or relief to wealthier income taxpayers, but was valueless to ordinary workers with children, who were below the rather high income tax payment threshold. The concern over the decline in population of interwar Britain was understandable as the birth rate had fallen to levels well below net replacement rates (Thane, 1990; the contemporary standard interpretation is CarrSaunders, 1936). Campaigners for family allowances were fully justified in using the argument, though whether there is any material relation between fecundity and family allowances is another matter. Eleanor Rathbone discussed the issues of birth-rate and eugenics to show that family allowances would promote a responsible increase (in 1924, 1949 edition, pp. 185–98). As chronicler for the family allowance movement, Macnicol (1980, pp. 77–84) takes the reader through the bizarre and patently ridiculous manifestations of this moral panic which infested both popular culture and learned academic debate alike until the mid-1930s. However, Glennerster and Evans (1994, pp. 65–6) make a much stronger case for Beveridge’s pro-natalist, eugenicist principles as fundamental to his thinking which are so compromised in his Report itself as to ‘flaw’ the Plan. 2. Macnicol details Seebohm Rowntree’s involvement in trying to broker some kind of child allowance scheme and wages/price control between employers

Notes 201 and unions during 1939. It was unacceptable to Bevin and hence pointless to pursue it at that time. However, in the more favourable climate of the Churchill government, Rowntree continued to try and persuade TUC leaders that family allowances were valuable against child poverty (Macnicol, 1980, pp. 174–5, 177). 3. Eight shillings is 40 pence; 5 shillings is 25 pence. Macnicol (1980, pp. 186–7) discusses the arguments around the rate. A ‘scientific’ subsistence rate would have been about 14 shillings (70p) and Macnicol concludes ‘that it was the less eligibility function of family allowances that appealed most to Beveridge, and it was more on these grounds [than subsistence] that the figure of 8s 0d was chosen’. In present-day terms, 5 shillings would be about £6.80. 4. Beveridge claims that the reason for not including the first child was that ‘to give full subsistence allowances for all the children of a man or woman at work may be described as wasteful … It would be an unnecessary and undesirable inroad on the responsibilities of parents’: to which Land observes ‘it is hard to accept this as much more than a convenient rationalization’, because cutting the cost of family allowances was part of the deal with Keynes (Hall et al., 1975, p. 202 and fn. 168). Beveridge could not save money on family allowances by making them contributory (the labour movement would not accept that) and he could not do it by asking the Treasury to abolish child tax allowances (income taxpayers were already thought to be ‘over-taxed’), so the first-born was sacrificed to political economy. 5. Some administrative and statistical details are given by the Government Actuary in a Memorandum at Appendix A of the Beveridge Report. A table in para. 47 of this Memorandum gives 9.8 million children aged 16 or under, excluding those aged 15–16 at work. The cost of children’s allowances is estimated at £113 million for 1945, and as the projected population decreased was estimated at only £103 million for 1965, assuming the prewar fertility rate of ‘married women’ (table with para. 58 and para. 66). They might have believed the cost would decrease, but the table with para. 74 shows clearly that children’s allowances-type payments were estimated to be a real increase in the existing social security budget of some £99 million, even when the obvious assumption had already been made to deduct children’s allowances from other benefits’ child-addition applicable amounts. The Government Actuary sets out these fiscal assumptions in paras 65–8. Paying children’s allowances for the first child as well was estimated to increase total cost to £208 million and as that would have been 26 per cent of the whole of the new Beveridge Social Security Plan, it is rather obvious why it was not recommended. Indeed Thane discusses this very point: ‘Keynes made clear to Beveridge that his proposals exceeded the limit placed by the Treasury on the amount they were prepared to spend on family allowances. Beveridge proposed, therefore, to meet the Treasury limit by not making payments for the first child … ’ (Thane, 1982, p. 243). Land draws attention to Beveridge’s acceptance of a deal with Keynes, the gist of which was ‘that Keynes promised to support my Report if I would keep the additional burden on the Treasury down to £100 million a year for the first five years’ which would be achieved by extending the transitional payment of pensions (from Beveridge, 1953, p. 309 quoted in Hall et al., 1975, p. 197). In the light of observations in note 4, the explanation seems rather disingenuous. In order to make the new pensions fully-funded they would

202 Notes have to have been phased in over several decades in any case. However, Macnicol (1994, p. 91) suggests that it was Treasury worries over the cost of such pensions which led him, on Keynes’ advice, to restrict both them and concede over his initial proposals for child allowances. 6. Rathbone’s arguments are set out in Family Allowances, first published in 1924 as The Disinherited Family. The 1949 edition takes the story past the implementation of family allowances and has a supportive essay by Beveridge: I am glad to take this opportunity, in contributing a new chapter to this new edition of Eleanor Rathbone’s classic work, to pay something of my own debt to her and to tell some of my experiences as a camp follower in her victorious campaign. … I read this book as soon as it appeared in 1924 … and I suffered instant and total conversion. Till that time … I had been apt to regard her and her Family Endowment Society as slightly tiresome creatures … [but] whatever else was done or not done for social progress and the abolition of poverty, what Eleanor Rathbone wanted must be done. (Rathbone, 1949, pp. 269–70) 7. Seebohm Rowntree viewed the existence of tax allowances for children as an important precedent in ‘extending the State’s recognition of parental responsibilities by the introduction of cash family allowances’ claims Land in Hall et al. (1975, p. 161); the source is Rowntree’s The Human Needs of Labour, 1918, p. 141. 8. Beveridge was a member and then chairman of the Unemployment Insurance Statutory Committee between 1934 and 1944 and as Mary Stocks, Rathbone’s stalwart campaigner, was also a member, the interests of the Family Endowment Society were well represented and understood. 9. The idea of a ‘national minimum’ was first mooted by Sydney Webb in his ‘Rosebery’ article of 1901: ‘The statesman who is really inspired by the idea of National Efficiency will stump the country in favour of a “national minimum” standard of life’ (quoted in Gilbert, 1966, p. 77). For discussion of the minimum and subsistence in Beveridge see Veit-Wilson (1994). 10. John Walley (1972, p. 71) has claimed that those opposed to family allowances, such as the secretary of the Assistance Board, Sir George Reid and a member of the Beveridge Committee, were able to delay the introduction of family allowances on the grounds that the Beveridge Plan must be taken as a whole. Macnicol (1980, p. 180) amplifies Sir George’s objection to family allowances as ‘a muddled pre-occupation with very low rates of wages, for which family allowances are not the appropriate remedy at all’. Macnicol (1980, pp. 178–9) also suggests that the Treasury saw Beveridge as ‘a stroke of luck’ because he would take the pressure for family allowances off them. 11. Lend-Lease was the method by which the USA ‘paid’ for the UK to wage war against the axis powers. As Hennessy states: It was a generous transaction by any standards on the part of the United States. By the time Lend-Lease was suspended in August 1945, over £5 billion worth of goods had been ‘borrowed’ and Britain had spent some £1.2 billion on ‘Reverse Lend-Lease’ transactions with the United States … Without it I shudder to think what our troops would have done for weapons, our factories for materials, our tables for food. (Hennessy, 1992, p. 42)

Notes 203 12. From a pamphlet published at the time of the debate by the Tory Reform Committee to gain support amongst Conservative MPs for the Beveridge Report (as discussed by Land in Hall et al., 1975, p. 219 fn 239). 13. In 1952 family allowances were increased to 8 shillings for each eligible child. In 1956 the allowance for the third and subsequent child went up to 10 shillings. There was no further increase until 1967. 14. As an alternative to raising family allowance, the Wilson Cabinet considered on several occasions a means-tested in-work benefit proposed by senior civil servants, its strongest supporter being James Callaghan, the Chancellor. ‘At one meeting in February 1968, the Cabinet reportedly divided 13:11 over whether to raise family allowances or to take the means-tested route’ (Timmins, 1996, p. 264, who does not quite realise that the real significance of this vote lies in the near-acceptance of an in-work benefit like Speenhamland by the Party of organised labour). Although that Cabinet did not accept it, when confronted with exactly the same issue, the next Conservative Cabinet were offered the ready-made programme.

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Index An index of author citation can be found in the References Abel-Smith, Brian and Townsend, Peter, rediscovery of poverty 1960s, 136, 171 accumulation process, 4 regime, 4, 5, 138, 175–6, 179, 187 Aid to Families with Dependent Children, 22 Alcock, Pete, on labour discipline and in work benefits, 140 allowances-in-aid of wages, 124–6, 129–30, 147, 149, 185, 190, see also in work benefits and wages, subsidies abolition, 126, 133 breaks down the family, 130–1 distorts employment flexibility, 132 encourages indolence, 129–30 forces down wages, 132–3 Althusser, Louis, on the family, 73 anti-social behaviour, 15 Atkinson, Tony, Child Benefit as an investment in children, 174 Attlee, Clement (PM 1945–51), on family allowances, 161; welfare state, 169 Australia, lone parents, 55 Bagguley, Paul and Mann, Kirk, on underclass, 190 Bain, George, and the Low Pay Commission, 67 Bank of England, 47 barbarians, 15, 83, 106, 109, 116, 118 warrior class, 107 Barnes, M. and Prior, D., on private lives and active labour market, 187–8 bastardy, 131, 190

Beckett, Margaret (Leader of the House of Commons 1997–2001), on minimum wage, 67 bed and breakfast accommodation, 102 Benefit Agency, 34 Bentham, Jeremy (1748–1832 utilitarian) Benthamites, 141–2 less eligibility, 128 poor law relief, 125, 127–9 Berkshire magistrates, 121, 122, 139, 141, see also Speenhamland Beveridge Report or Plan (Social Insurance and Allied Services, Cmd. 6404, 1942), 1, 148, 165–6, 168, 172 assumption A, 150–1, 164 birth rate, 151, 200 children allowances, 65 contingency principle of social insurance, 7, 148–9 race, 151, 200 Beveridge, William (1879–1963), 17, 121, 133, 147, 170–1, 185, 190 child poverty, 152–3 coal industry, wages and family allowances, 159–160 Family Endowment Society, 159 rate of family allowance, 165 Unemployment Statutory Committee, 161 Bevin, Ernest (Minister of Employment and National Service 1940–45) on wage restraint and family allowances, 163 Blair, Tony (PM 1997–) communitarianism, 50–1, 189 economic growth, 47, 60 lone parents, 56 means-test, 52 221

222 Index Blair, Tony (PM 1997–) – continued revisiting Beveridge, 173 Thatcherism, 45 welfare reform, 54 Blaug, Mark, on Speenhamland and low wages, 132–3 Bluestone, B. and Ghilarducci, T., on US minimum wage and in-work benefit, 144–5 Blunkett, David (Secretary of State for Education and Employment 1997–2001), on young people, 53 Board and Lodging Regulations, 102–3 Borrie Report on Social Justice 1994, 10, 142–3, 145, 189–90 Brighton Against Benefit Cuts, on economic effects of subsidised wages, 141–2, 145 Brown, Gordon (Chancellor of the Exchequer 1997–) character forming potential of welfare, 64 child care, 58 economic objectives, 46–7, 60, 62 means-test, 52 Working Family Tax Credit, 51 Bryson, L., on lone mothers and social security, 55 Burden, T., wage earners’ welfare state, 187 Burt, Alistair (Minister of Social Security and Disabled People 1995–7), on disincentive to work, 110 Campbell, Bea champion of lone mothers, 104 role models, 105 supportive of young men, 104 capitalism, 6, 93, 136, 141, 164, 182 capital accumulation, 39, 46, 70, 98, 103, 137, 144, 149, 174, 177, 184–5, 188 contradictions, 178 development, 4, 18–20, 76, 126–7, 147 Captain Swing riots (1830–1), 129

Central Policy Review Staff, withdrawal of social protection from young people, 100–1 Chadwick, Edwin (assistant Poor Law Commissioner 1832–4), 129, 142, 188 Chatham House Rules, 12 Checkland and Checkland, on the Poor Law Report 1834, 129 Child Benefit, 11, 17, 171, 173, 174 child care, rearing cost, 57, 153 health, 152, 157, 160 strategy, 57–8, 79–80, 87, 186 child poverty, 17, 150, 152, 161, 163, 170, 172–4, 187–8 Blair government pledge, 173–4 family allowances, 161 race and eugenics, 157 Seebohm Rowntree York studies, 153 services, health, 160, 168 Child Poverty Action Group, 171–2, 174 Child Support Agency, 34, 79, 87 Childcare Disregard, 55, 63, 70, 83 Childcare Tax Credit, 17, 55, 63, 66, 69, 70, 80, 88, 180, 182, 188 children allowances, 11, 16, 17, 123, 149–51, 187, see also Family Allowance addition to benefits, 158 Beveridge Report proposals, 153–5 campaigns, 157–72 coal miners’ support, 159–60 control of wages, employment, 159 cost, 155–7 estimate of administrative issues, 155 first child, 154, 169 First World War, 157–8 principle accepted, 152 universal, 154, 159, 164 Children’s Minimum Campaign Committee, 160 Children’s Minimum Council, 162 Christian socialism, 50 Churchill, Winston (PM 1940–5), on family allowances and the birth-rate, 165

Index churning (from benefit into work), 6, 137 claimants, 137 clawback, 134, 154, 172, 174 coal industry, 159–60; miners’ support for family allowances, 160 Commission on Public Policy and British Business, 143 Commission on Social Justice, 10, 142, 143, 145, 189–90 communitarianism, 50, 55, 108, 151–2, 154, 173, 174, 189 Comprehensive Spending Review, 47 Conservative Party and governments, 10, 12, 13, 16, 21, 26 Beveridge Report, 153–4 disorderly youth, 102–5 Family Allowances, 161 Family Income Supplement, 134–5, 139–40 in-work benefits, 41, 178 lone parents, 55, 78, 81, 83–8, 107–10 minimum wage, 41 neo-liberals, 25, 45, 188 similarity with Labour, 44, 92 social insurance, 29–30 underclass, 78 workfare, 27, 38 Co-operative Congress Parliamentary Committee, 155 Coote, A., on transition to adulthood – boys, girls, 115, 117 ‘Costa del Dole’, 102 Costello, Anne, on workfare, 25, 38 crime family, 112, 117 lone mothers, 78–9, 81, 107–8 underclass, 77, 116 youth, 105, 111, 113 criminology – social control theory, 82 Cripps, Stafford (Chancellor of the Exchequer 1947–50), on welfare as consumption, 169 cycle of deprivation, 91–2 Dalton, Hugh (Chancellor of the Exchequer 1945–7), on family allowances, 159

223

Darling, Alistair (Secretary of State for Social Security 1998–) lone parents, 56 New Deals, 54–5 social exclusion, 48 Deacon, A., on communitarianism, 50; ‘making work pay’, 52 delinquency, 34, 106, 107–8 Dennis, Norman and Erdos, G. fatherless families, 106–7 never-married mothers, rioting young men, 104, 106–7 dependency, 6, 8, 69, 89, 102, 138, 140, 143, 160, 173, 176, 182 lone motherhood, 78, 89 deregulation, 6, 24 Dickens, Charles, A Christmas Carol (1843), 199 disabled people, 186 disorder, 105–7; and see riots economic development, 110, 137 divorce, 84, see also relationship breakdown domestic labour, 73–4 Duncan, S. and Edwards, R., on lone parents and ‘gendered moral rationalities’, 186 Durkheim, Emile (1858–1917), 48 earnings – state control of lowest level, 180–4 Earnings Top-up, 12, 14, 21, 28, 31, 35, 36–7, 40, 80, 105, 108, 110, 117 economic rationality, 17, 28, 77, 86 economy, economics classical or liberal, 16, 120, 121, 122, 124–5, 132, 134, 138, 147, 199 dead-weight, 27, 31, 148, 169 ethics, 49, 52, 75–6, 116–18 growth, 46–7 labour market integration, 47 local, 66 market forces, 70, 75, 132 moral, 16, 124, 126, 142, 176 National Minimum Wage, 66, 68–9 political economists, 126, 128–9, 132–3, 139, 190

224 Index economy, economics – continued supply side, 28, 188 war, 162–3, 171 employability, 20, 60–2, 117 employment, see work Employment Tax Credit, 12, 66, 181–2 Enlightenment, 129 equality, 47–9, 139, 158 ethical socialism, 50 eugenics, 151, 156–7, 200 European Economic Community, 137 Fabian Society, 155–7, 171 family, 9, 10, 72–6, 80, 85–9, 96, 112–13, 117–18, 131 breakdown, 107–8, 112, 130–1 Hayek, 74–6 income distribution ‘purse v. wallet’, 65 large poor, 151, 158–9, 163–4, 188 neo-liberal conception, 76, 106 policy, 113–14, 187–8 underclass, 77 welfare state, 77, 185 working poor, 121, 136, 149, 170 Family Allowance, 11, 17, 134, 136, 147, 149–50, 152, 188, see also children allowances birth rate, 165, 169–70 campaign, 150 clawback, 134, 154, 172 cost, 166 disincentive to work, 153 government schemes, 167–9 incentive to work, 161, 171 increase in rate, 134, 172–3 Keynes, 162–4 link with in-work benefits, 66, 171 negotiations with government, 164–7 paid to father, 168, mother, 169 parental responsibility, 153, 167–8 success at reducing child poverty, 170 support from Labour, 163–4, 171 universal, 167–8, 171 Family Credit, 14, 21, 28, 30, 31, 34, 35, 36, 55, 63, 65, 70, 78, 80, 83,

85, 87, 88, 94, 121, 139, 140, 141, 142 data, 190 effect on wages, 40 Family Endowment Society, 17, 152, 159, 162 Family Income Supplement, 16, 121, 134–6, 138–40, 142, 148, 172, 179 answer to failure of family allowances, 173 distorts wage system, 135 family policy, 86 feminism, feminists, 73–5, 80–1, 106 and family allowance movement, 162, 174 Marxist, 93 socialist, 104 Field, Frank (Minister of Welfare Reform 1997–8), 51–2 Child Poverty Action Group, 171 unemployment, 116 unthinkable thought, 190 Finer report on one parent families (1974), 84 Finn, D., on the stricter benefit regime, 32–3, 37 flexibility (of wages), 24, 178, 190 social security, 31, 35, 118 working practices, 132 Fordism, 5 Fowler reforms of social security, 1, 29–31, 35–6, 178 France, revolutionary wars with England, 122; family allowances, 159 Fraser, Derek, on abolition of the poor laws, 128 fratriarchy, 94–6, 113, 118 functionalism and the family, 72–3, 82, 106 George, Vic and Wilding, Paul, on family and child poverty, 187–8 Giddens, Anthony community and market, 189 nation state, 180 social change, 108 social exclusion, 49

Index Gilbert, Bentley, on Sidney Webb’s ‘national minimum’, 157 globalisation, 17, 31, 39, 41, 45, 48, 54, 102, 136, 178–80 Griffiths, James (1890–1975 Welsh miners’ leader, MP), support for family allowances, 163–4 Halsey, A. H., on ethical socialism, 50; underclass, 82 Harman, Harriet (Secretary of State for Social Security 1997–8), 51 cycle of dependency, 91 lone mother role models, 88–9 Harris, J., on the austerity and probity of the Beveridge Plan, 170 Hayek, Friedrich von (1899–1992), 74–5 tacit knowledge, 75 the family, 75–6, 83 Hearn, J., on troubled masculinity and policy, 94–6 fratriarchy, 113 lone mothers and male criminality (laddish behaviour), 105, 113 Himmelfarb, G., on Malthus and natural laws of low wages, 124–5, 127 Hollis of Heigham, Baroness (Parliamentary Undersecretary DSS 1997–2001), on Speenhamland effect, 145–6 households, 73; distribution of income, 65 Housing Benefit, 10–11 Howard, Michael (Home Secretary 1993–7), on lone mothers and rising crime, 81 Howarth, Alan (undersecretary of state DfEE 1997–8, Employment and Equal Opportunities), on idle youth, 53–4 idleness, indolence, 53–4, 129, 141, 173, 190, 199 incentives, see work incentives incivility, 111, 115 income maintenance, 138, 175–6, 178, 185, 189, 190

225

Income Support, 102, 181, 188 independence, individualism, 6, 8, 52, 74 independent labourer, 126, 129, 137 wage labour, 125 Independent Labour Party family allowances, 158–9 living wage policy, 158 minimum wage, 158 inflation, 19, 40–1, 47, 70, 46–7, 60, 70, 163, 166, 169, 171–2, 184 Inland Revenue, 182 Institute of Economic Affairs, 74, 76, 77, 104 Institute of Public Policy Research, 115, 143 in-work benefits, 6–9, 11, 12, 14, 21, 37–8, 44, 58, 63, 70–1, 92, 137–42, 148, 176, 189, 190 eighteenth century, 124 labour discipline, 35 link with family allowances, 64–5, 150, 161, 172–4 lone parents, 84–5 low pay strategy, 69, 181–2 maintenance, 32–3 national assistance as, 136 slavery, 138–9 young men, 103 Irish Republic and minimum wage, 68 Jessop, Bob, on theories of capitalist development, 23–4 ‘hollowing out’ the nation state, 179–80 Offe’s paradox, 179 job creation, 59 jobs, see work Jobseekers Allowance, 9, 12, 21, 26, 32–3, 35, 70, 108, 111, 117, 181 administrative terms, 33 Jones, Chris and Novak, Tony, on the disciplinary character of social security, 35 pauperised labour, 141 Jordan, Bill, on subsidised low pay, 136–40 against low wage subsidies, 136–40

226 Index Jordan, Bill – continued dividing the working class, 138 significance of Family Income Supplement, 179 ‘state paupers’, 136, 138, 164 Joseph, Keith (Secretary of State for Social Services 1970–4) cycle of deprivation, 91 Family Income Supplement, 134–5, 140 Keynes, John Maynard (1883–1946) children allowances, 17, 154, 162–4 rate of family allowances, 165 war economy, 162–3 Keynes-Beveridge settlement, 148, 177–9, 185 Keynesianism, 6, 42, 45, 103, 155, 176–7, 180, 182, 184 Keynesian welfare state, 23, 25, 29–31 Klein, Rudolf, on neo-Marxism ‘O’Goffe’, 178 labour discipline, 2–3, 24–5, 35, 65, 117, 140, 176 compulsory, 138–9 labour market, 8, 121, 126–7, 147, 190 active, 187 attachment, 86–8, 103 costs, 59, 60 discipline, 117 flexibility, 54, 103, 188 lone mothers, 56, 60 natural, 125 supply side, 59, 62, 175 troubling youth, 97, 100, 108 Labour Party and governments, 8 Attlee government and welfare state, 169 child poverty, 173–4 continuity with Conservative policies, 45–6, 51, 55, 59, 60, 80–1, 88, 91, 113, 116–17, 139, 185 economic objectives, 46–9, 60, 62, 69–70, 187 family, 74, 112–14, 116–17 Family Allowance, 163–4, 171–2

in-work benefits, 63, 85 lone mothers, 88–91 morality, 49–51, 52 National Minimum Wage, 142–5 ‘new Labour’, 9, 10, 13, 16, 44 social exclusion, 48, 70–1 social justice, 47–8, 188–9 welfare reform, 51, 69–70, 88, 142, 173, 178, 184–5, 188–9 labour reproduction, 73–4 as a commodity, 126 supply, 184 Land, Hilary, on ‘male breadwinner model’, 117 campaign for children allowances, family allowances, 157–9, 160–4 population growth, 170 pressures for delaying Family Allowance, 166 Layard, Professor the Lord (Consultant, Department for Education and Employment 1997–) effect of wage subsidies, 59–60, 62, 145 in-work benefits and dependency, 143 minimum wage, 143 less eligibility, 17, 23–5, 35, 121, 127–8, 136, 172, 176, 181–2, 190 Levitas, Ruth, on social exclusion, 48 Lilley, Peter (Secretary of State for Social Security 1992–7), 13, 188 benefit to labour market policies, 32 effect of Family Credit on wages, 40 lone mothers, 81, 84, 107–9, 117 poor breed delinquents, 34 Lister, Ruth and Child Poverty Action Group, 171 lone mothers, 7, 21, 55, 74–93, 137 child maintenance, 33–4, 79 and the commodification of their labour, 33–4 cost of, 85 explanations for rise in, 113–7 never married mothers, 104–5, 107–9, 112, 116–17 prevention of, 79

Index lone mothers – continued problem of, 80–2, 104–5, 107–8, 115–16, 156, 190 rising numbers of, 107–9, 111 role models for their children, 81–4, 86, 88, 104–5, 186 social security benefit, 84 underclass members, 77–81 workfare costs of, 57, 78–80 Lone Parent Premium, 79 Low Pay Commission, 67, 69 Macnicol, John on wage-benefit relationship and negotiating family allowances, 160–5, 172 Macpherson, Nicholas (Head of Work Incentive Policy, HM Treasury), on the Taylor Group, 64 maintenance (of child, by absent parent), 79; as a portable income, 33–4 male domination, 95 malingerers and slackers, 156 Malthus, Thomas (classical economist 1766–1834), on natural law of population growth and critic of poor relief, 125 Mandelson, Peter (MP Hartlepool), on Thatcherism, 45 Manpower Services Commission, 102 markets and the allowance system, 132 discipline, 117 and the family, 75–6, 83, 84, 86, 93 free, 6, 74–5, 86, 92, 94, 100, 110, 126, 136, 138, 147, 176, 182, 185, 189 free market wages, 143–4, 151, 155, 161, 167 mechanisms, 118 spontaneous, 125 marriage, 15, 52, 76, 84, 105, 113 civilising effects of, 105–6, 109, 112 eighteenth century – Speenhamland, 121 families, 82, 106–8 ‘married to the state’, 109 rejected by young women, 104–5, 111, 116

227

rejection of, by male children of lone mothers, 82, 106–8 trap, 86 working-class men unmarriageable, 113, 115, 118 Marx, Karl (1818–83), on pauperism, 137 Marxism, Marxists, 3–4, 80, 181 feminists, 15, 73–4, 93 neo-Marxists, 17, 178 surplus value, 181 masculinities, 94–6, 104–5, 118; ‘laddish’, 113 Mead, Laurence on workfare, 22–3 work and culture of poverty, 56–7 Meadowell Farm, North Shields, 104 means-test, see social security men, see barbarians and young men meritocracy, 6 Minford, Patrick, on effect of wage subsidies, 59 minimum income, 163 and state control of, 182 minimum income standard, 71, 140 minimum wage, 40–2, 102, 123, 141, 143, 151, 165, 172, 189, see also National Minimum Wage Ministerial Group on the Family, 112 Morgan, Pat, against encouraging lone motherhood, 86, and privileging of lone motherhood, 107 Murray, Charles, on ‘the underclass’, 77 influence on Conservative government, 81 lone mothers as role models for boys, 82–3, 156 marriage, 106 men as barbarians, 106 Napoleonic wars, 140 natalism, pro-, 126, 149, 151, 156, 162, 172–3 National Assistance, as an in-work benefit, 136 National Childcare Strategy, 57, 70, 187, 188

228 Index National Council of Women, on family allowances, 155 National Labour Organisation, on family allowances, 156 national minimum (income), 163, 202 National Minimum Wage, 9, 44, 46, 65–70, 142–5, 173, 176, 180–2, 187–90 and children allowances, 152, 171 coverage, 68 fairness, 143 and Independent Labour Party, 158 Labour manifesto commitment, 142 negotiation of the rate, 67 no impact on unemployment, 67 relationship to in-work benefits, 143, 145, 181–2 up rating, 68 need (common human), 68, 70, 78, 144, 149, 172, 175, 182, 188 family allowances not at subsistence level, 168–9 poor law, 124 neo-liberalism, 3, 4, 6, 27, 30, 38–9, 42, 45–7, 74–6, 78, 98, 103, 110, 120–1, 134, 138–9, 176–7, 188 contradictions, 103–4, 108, 113, 179, 182–4 contrasted with communitarianism, 50, 108 and the family, 74–6, 83, 86, 109 young workers, 101–3 Neuman, M., on Speenhamland, 123 New Deals, 8, 9, 54–62, 70, 141, 184, 187 lone parents, 12, 55–8, 62, 83, 88, 94, 186; benefit penalties, 56; breaking dependency transmission, 89–90; SWFG interview, 55–6 young people, 9, 58–60, 117; administrative terms, 58 Newton, Tony (Secretary of State for Social Security 1989–92) Board and Lodging Regulations, 103 Family Credit for lone parents, 87 Nixon, Richard (President of the USA 1968–74), 22

non-accelerating inflation rate of unemployment, 16, 145 Novak, Tony, on the underclass, 76; wage labour, 125 Offe, Claus, on survival, 79 Offe’s paradox, 178–9 wage labour, 176–7 One Parent Benefit, 79 out-of-work benefits, 9, 11, 12, 84–5, 91–2, 100, 102, 137–8, 148, 161, 176, 178, 181, 186–7 Parent Plus, 12, 21, 26, 34, 35, 55, 70, 83, 94 Parsons, Talcott, on functionalism, 72–3, 82, 106 the family, 72–3, 106 Pascall, Gillian, on contradictory effects of social policies on women, 92 paternalism, 126, 190 patriarchy, 3, 10, 15–16, 18, 65, 73, 80–1, 93, 94–6, 185 and family allowances, 162 private, 83, 94, 117 public, 84, 94 rejection of, 95 pauper, pauperism, 121, 126, 129–30, 137–8, 141, 147 change in character of, 133 Jordan on, 136, 138–9, 164 pay, see wages Pearson, Geof, on fear of young hooligans, 96–7 Peck, Jamie, on labour market regulation, 24 Phillips, A., on young men and women’s work opportunities, 115 Pitt, William (PM 1783–1801), 16, 144, 147, 158 minimum wage, 123 Pitt question: large, poor working families, 123, 149, 151, 171–2 Political and Economic Planning, on family allowances, 155 Poor Law Commission(ers), 1, 11, 17, 52, 127–9, 131, 133, 138, 144

Index Poor Law Report (1834), 129, 133–4, 141 poor laws, 16, 121 new poor law: deterrent workhouse test, 134, 148; reforms of 1834, 133–4 old poor law: abolition of, 128; breakdown of the family, 130; moral degeneracy, 129–30; outdoor relief encouraging bastardy, 131; overseers of the poor, 126; parish relief, 124; relief creates pauperism, 126; undermines natural markets, 125–6, 129 population, demography birth-rate, 151, 165, 169–70, 172 wartime view, 169–70 Portillo, Michael (Secretary of State for Employment 1994–5), 28 post-Fordism, 5 poverty, 189 child, 17, 65, 70, 150, 152, 161, 163, 170, 172–4, 187–8 family, 136 large families, 123, 126 measurement, 70–1 natural, 125, 127 relieving, 149 rural, 122 social exclusion, 48, 70, 187 tax-benefit review, 63–4 threat – starvation, 126–7 underclass theory, 76–7 working, 123, 134 poverty trap, 2, 36, 39, 135, 171 Powell, Enoch (MP) against Family Allowance, 170 against Family Income Supplement, 135–7 Powell, M., on new Labour populism/pragmatism, 184; social justice, 189–90 Prescott, John (Deputy PM 1997–), on minimum wage as cause of unemployment, 67 Prior, Jim (Secretary of State for Employment 1979–81), on riots and unemployment, 99

229

Rathbone, Eleanor, (1872–1946 MP), 65, 152, 159, 161–2, 168–9, 171, 174 rational choice, in economics and social security, 52, 91, 109, 126, 130, 185–7 employers, 131–2 Reagan, Ronald (US President 1980–8), 144 redistribution, 187–8 regulation theory, 3–6, 13, 47, 175 instruments of regulatory control, 136, 159, 171, 182, 187 regulatory dilemmas, 38–9, 44, 66, 69, 113 relationship breakdown, 86, 89, 107, 130–1 Remy, J., on fratriarchy, 95–6, 118 research methods, 12–14 reserve army (of labour), 16, 19–21, 62, 184 women, 20 riots in 1981, 98–9 (listed 196–7) in 1990s, 104–5 (listed 197) Tyneside, 106 Rosebery, Lord (imperialist head of Liberal League 1902), ‘escape from Houndsditch’, 157 Sainsbury, Roy on in-work benefits, 140–1 Samuel Commission (1925), on the coal industry 159–60 Schumpeterian workfare state, 23–5 Scrooge, Ebenezer (A Christmas Carol, 1843) on the market, 188 on paupers, population, idleness and Christmas, 199 Seebohm Rowntree, Benjamin (1871–1954) child allowances, poverty, 152, 165, 171 Human Needs, 159 York Study 1951, 170 Senior, Nassau (Poor Law Commissioner 1832), 129

230 Index separation allowances (First World War), 157–8 servicemen’s dependants’ allowances, 166–9 Single Work Focused Gateway (One), 56, 70, 88, 94, 186–7 compulsion, 186 Smith, Adam (1723–90 classical liberal economist), 123–5 Smith, John (Leader of the Labour Party 1992–4), 142 Snower, Dennis, on effect of wage subsidies, 59 social administration, 136, 138 social engineering – control, 72, 106–7, 156, 188 social exclusion, 48–9, 187 social insurance, 190 social justice, 47–8, 182, 187–9 social less eligibility, 34 social mode of economic regulation, 4, 15, 17, 30–1, 38, 69, 72, 120, 137, 138, 171, 175–7, 179, 180, 188 social rented housing, 104–5 social security – benefits are indexed individually cost of lone parents, 79 disincentive to work, 37, 39, 52, 110, 116, 120, 149 incentive to work, 29–32, 35–6, 55, 58, 64 insurance, 29–31, 37, 148, 153, 158, 160–1, 189, 190 lone mother status, 84, 109–11 means-test, 31, 52, 84, 116, 121, 160, 189, 190 and morality, 52, 120, 188 objectives, 141, 148–9, 155–6, 188 postwar reconstruction, 169 review of tax and benefits, 63–4 as social mode of economic regulation, 5, 11, 17, 32, 172 stricter benefit regime, 14, 32–5, 37–8, 54, 70 subordinated to, or part of economic policy, 5, 24, 26, 31–2, 33, 35, 54, 62, 68, 149, 162, 172, 188

troubled youth, 97–8 universal, 154, 156, 158 withdrawal of benefit, 102, 109–10 socialism ethical, 50, 82, 104 simple, 75–6 Speenhamland system 1796 (area of Reading, Berkshire), 11, 16, 121, 125–6, 134, 136–43, 147–8, 176, 185, 190 and current economic theory, 144–5, 181, 191 definitions, 122–4 effect in US economy, 144 family allowances, 164 Stewart, Gill, on the Board and Lodging Regulations, 102–3 stricter benefit regime, see social security subsidies, see allowances-in-aid of wages and wages, subsidies subsistence, see Beveridge Report, minimum income standard, national minimum, need tacit knowledge (Hayek), 75 taxation, progressive, 163 tax–benefit system, 63–4, 70, 139 Tax Credits, 6, 8, 63, 139, 178, 187, 190 Taylor Group reviewing the tax and benefit system, 63–4 Taylor, Martin (Head, Review of Tax Benefit System), on work incentives, 64 character forming potential of welfare, 64 wage depressing effect of in-work benefits, 65 Tebbitt, Norman (Secretary of State for Employment 1981–3), on British youth as competitors with south-east Asian workers, 102 Temporary Assistance for Needy Families (USA), 22 Thane, Pat on the Beveridge Plan and delay in introducing family allowance, 166

Index Thatcher, Margaret (PM 1979–90) civil disorder and unemployment, 99 young workers, 101, 134 Thatcherism, 38, 45–6, 133, 144, 156, 185 think tanks – right-wing influence, 105 ‘Third Way’, 47–51, 69, 182, 189; and social exclusion, 49 Titmuss, Richard (1907–73), 50, 133 Tomlinson, J., on low welfare spending postwar, 169; Treasury attitude, 170 Tonge, J., on continuity in government policy for young unemployed people, 58 Trade Union Congress family allowances, 160 minimum wage, 67 trade unions, and family allowances, 158, 162–3 transferable skills, 101 Transport and General Workers’ Union in opposition to family allowances, 163 the Treasury, 16–17, 134, 140, 155, 163, 182, 184 against family allowances, 150 against national insurance, 190 against welfare, 170 in-work benefits alternative to family allowances, 172 lowering the cost of family allowances, 154 Tyneside riots (1991), 106 underclass, 15, 20, 73, 76–80, 87, 106, 110–11, 115–17, 176, 190 inter-generational transmission, 92 lone mothers, 34, 80–3 Unemployment Assistance Board, 160–1 Unemployment Benefit, 29–30, 189 Unemployment Insurance Statutory Committee, 160–1 unemployment, 19–21, 38–9, 41, 70, 100, 116–17, 132, 158, 189, see also out-of-work benefits

231

actively seeking work, 22, 28 Beveridge on, 153 disincentives to work, 37, 116 disorder, 98–9, 106 genuinely unemployed test, 22, 28 indigent, 126–7 long-term, 19–21, 59, 62 reduction, 47, 60 trap, 36, 37, 141 young people, 58, 77, 98, 100, 102, 110–11 universal benefits, 171 USA welfare and benefits, 8, 22–3, 104 Atlantic Charter, 166 earned income tax credit, 144 federal minimum wage, 144 in-work benefit, 136 lend-lease, 166 lone parents, 55–6, 116 poverty, 22 workfare, 22–3, 57 utilitarianism, 77, 128–9, 131, 141–2 calculus of pain and pleasure, 129–30 Veit-Wilson, John, on minimum income, 71 Vincent, David, on working family poverty, 173 violence, 100, 111, 116 wages competition in Europe, 41–2 control of lowest wages, 180–4 and cost of children, 151, 152, 156, 158, 163 downward pressure on, 28, 38, 42, 59, 60, 62, 65–6, 69–70, 101–3, 107, 136–7, 145, 162, 172 eighteenth century, 121–3, 127, 132–3, 141; deliberate lowering, 132; natural, 125–6; threat of starvation, 125, 137 entry level, 137, 143, 144, 158, 171, 180–2 and family allowances, 159, 162, 167, 171 inequalities, 39, 108

232 Index wages – continued ‘living’, 156, 158 low pay, 6, 18, 36, 39, 58, 65, 66, 69–70, 140, 143, 149, 159, 160, 163, 179, 181, 189, 190–1 and national insurance, 190 of single and childless people – incentives, 104 stagnating, 109, 117 subsidies, 59, 62, 66, 69, 122–3, 134–9, 141–2, 145, 150–1, 154, 158, 175, 179, 190–1 wage–benefit interaction, 160–1, 166–7, 177, 180–2 ‘wage earners’ welfare state’, 187 of young people, 101–3, 154 Wages Councils minimum wage, 67–8 young people, 101–2 Walby, Sylvia, on functionalist view of family, 73; on private patriarchy, 80–1, 94 war First World, Great, 157–8, 171 Second World, 162, 155, 157, 169, 171; post-war reconstruction, 165, 185; community, 187 War Cabinet (1939–45), 155 Webb, Sidney (1859–1947 Fabian), 171; on child poverty, eugenics, racial imperial strength, 157 welfare reform, see also Fowler Reforms ‘futures’, 189 morality, 52 ‘new Labour’, 51–5 young people, 53–4 welfare rights, 111 welfare state Beveridge, 6, 173 comparative spending, 169 crisis of legitimacy, 178 low spending, 169 postwar, 77, 169, 185 work at the heart of, 185–8 welfare-to-work, 6–9, 51–4, 145, 182 welfare-to-work-welfare, 8, 13, 44, 51, 54, 60, 86, 145

Whitbread, Samuel (1758–1815 MP), wage regulation bill 1796, 122–3, 144 Widdecombe, Ann (Minister of State for Employment 1994–5), 27 Wilkinson, Frank, on ‘Speenhamland effect’, in-work benefits and minimum wage, 144–5 Willetts, David (parliamentary private secretary 1993–4; parliamentary secretary Office of Public Service 1995–6), on workfare, 27–8, 188 architect of Family Credit, 192 ‘married to the state’, 109 minimum wage, incentives to work, 41 young men unmarriageable, 108 Williams, Fiona, on troubled masculinities and fatherhood, 94–5; male breadwinner regime, 118 Wilson, Rev. Edward, on law unable to regulate wages, 123 Wisconsin (USA) workfare, 57 women, see also lone mothers and young women domestic labour, 73–4 dual or double burden, 92–3, 186 family income, 65 labour reproduction, 73–4 oppression, 80 rejection of young men as husbands, 96 role, 73 work, 20–1, 58, 115 Wood, Kingsley (Chancellor of the Exchequer 1940–3), on Family Allowance, 164 work attachment to social institution of work, 106, 115, 186 central place in welfare, 52, 54, 58, 149, 186–8 disincentive, 11, 16, 29–30, 36, 52, 103, 150, 158, 171 effect of National Minimum Wage, 67–8 ethic, 72, 79–80

Index work – continued incentives, 2–3, 9, 16, 19–20, 24, 28–9, 41, 55, 57, 58, 64, 70, 87–8, 139, 160–2, 170–2, 176, 182, 186 mobility, 171–2 opportunity, 46, 48–9, 59, 67, 88, 122 role in formal economy, 86–9, 116 women, 20–1, 58, 115 Work Incentive Plan, 22 workfare, 10, 22–8, 43, 57, 138 classic, 25–8, 38, 147 cost of, 27 market workfare, 14–15, 22–6, 38–42, 44, 62, 69–70, 72, 74, 75, 80–1, 83, 86, 91–2, 93, 105, 110–12, 117, 118, 141, 180, 191 youth, 97 workhouse test, 23, 134, 182 Working Family Tax Credit, 11, 54–5, 63–5, 69, 70, 83, 88, 94, 140–1, 144, 172, 180, 182, 188, 190 pay packet delivery: wallet v. purse, 64–5, 121, 190 working poor, 68–9 family, 16, 70, 134–5, 139, 149, 171 young, 67–8 Working Time Directive, 46 York poverty studies, 152, 159, 170 young men, 15 adolescence – transition to manhood, 115–16 barbarism, 15, 83, 106, 107, 108

233

criminality and incivility, 105, 107, 111, 113, 115 essentialist masculinity, 80, 104–5, lone mothers, 81–2, 104, 105, 107 marriage, 7, 104, 106–8, 113 minimum wage, 67 rejection of formal economy, 115 rejection of patriarchy, 96 role models for family life and work, 81–4, 105 troubled masculinities, 94–5, 118 underclass, 77 unemployable, 111 violence, 98, 103, 104–7, 116 work, 115 working class, 106, 113 young women, 115–16 mothers, 115 potential, 115 work, 115–16 Young Workers Scheme, 101 Young, David (chairperson Manpower Services Commission), on exploiting youth, 102 youth compulsion to work, 100 exploitation, 102 priced out of employment, 101–2 skill training, 100–1 social policy, 97 trouble, 96–7 withdrawal of Income Support, 102 Youth Opportunities Programme, 101 Youth Training Scheme, 99, 100, 101–2