Helping the Poor
Although the Budget has been promoted as fair and spreading the pain, it is a fact of life that austerity directly impacts the quality of life of the poor, whereas it only affects the comfort of the better off. In the last great austerity period in the years after WWII, there was full employment, a demand for skills of every kind, wages were rising and the benefits of the Welfare state were rolling out. It was the middle and upper classes that felt the most pain. This time, this is clearly not the case.
I think the coalition is right on its general policy thrust put the fine tuning is flawed, rather like the Tory election campaign. There are two issues which must be faced, to provide real hope to those in need, just as Labour’s social policies, continued by the Conservatives from 1951, gave hope to the drab and shattered landscape of the early years of peace.
The first is that the so called service economy fails altogether to reward or even employ manual and trade skills, beyond builders and plumbers. The second is that neighbourhood employment in small factories making parts for industry or everyday utility items is an essential feature of lifting people out of poverty and reducing welfare dependency. It is no use re-shaping welfare, unless you create the kind of employment which the welfare dependents are equipped to do or for which they can easily be trained. Neighbourhood work goes hand in hand with better parenting and care for elderly family members within a community.
This gaping hole in the structure of the economy is the outcome of the weaknesses of the Thatcher reforms, which were better in cutting out the old than planting the new. But Thatcher was faced with a huge task of economic renewal and inspite of this failing did a good job. It was Labour’s task to fill the gap when it came back to power and by doing so through the creation of a vast empire of public employment, much of it futile, will be seen by historians as one of the great economic disasters of history. It entirely overshadows current debate about the timing and extent of cuts, but it is why we are burdened with public debt in the first place.
The next issue is the welfare state. Atlee with Labour and Butler, Macmillan and their progressive Tory allies saw that the glue that held the social coherence together in their difficult times was the welfare state. What is now needed is the vision to see that this very glue is gumming up the economy, creating bills we cannot afford and above all hitting the poorest very hard. It is utterly self defeating to remain with the mantra of universal benefits. Pensions, child allowances and fuel payments as well as disability allowances and even unemployment pay and attendant support, should not be available to those whose incomes or severance make it unnecessary in terms of survival. Neither should health or eduction be free to those who can afford to pay some of, but not all, the cost.
Only when we can get our brains around these twin issues will we be able to really attack poverty and at the same time put our public finances on a sound footing without penal taxation and skeleton services. So far the new government has not done nearly enough either to the banks to channel their money to business first or to stopping the rich being paid money they do not need. This is where the debate now has to go.