Entitlement, privilege and freedom
Like the Harry Potter film makers I have decided to divide the final instalment of my series of posts on ‘the paradox of entitlement’ in two. Sadly, despite the many helpful comments I have received to the earlier posts, I don’t expect millions to be waiting with bated breath for my finale.
Just like when you buy a new car and suddenly notice how many of them there are on the road, so I’ve been noticing the issue of entitlement cropping up in other places. In America, former US Federal Reserve chairman Alan Greenspan has been saying that the looming fiscal crisis requires cutting back on social security entitlements. Meanwhile Labour’s Liam Byrne called for a return in welfare policy to the ‘something for something’ expectations of the Beveridge report.
But most interesting to me was David Cameron’s commitment on last Friday’s Today programme to tackle excessive pay and Nick Robinson’s interpretation of the PM’s stance. The BBC’s chief political correspondent suggested that politicians have to respond to a hurting and angry ‘squeezed middle’ electorate which feels intolerant of what it sees as fat cats at the top and benefit cheats at the bottom.
The danger is clear: ugly economic circumstances can lead to an ugly politics of rage and resentment. Politicians have to respond to public anger but also offer more unifying and hopeful ways of thinking about the world. Although my musings today stray into well-trodden intellectual debates, my aim is not so much philosophical clarity as developing a credible political narrative about entitlement which spans the responsibilities of all sections of society.
When, in the first and second of these posts, I described some problems with state backed entitlements one critical response urged me to explore the entitlements of the rich, not just those dependent on state benefits and services. I agree.
However, when considering the responsibilities which might come with entitlements, it is important to recognise that people tend to see a difference between the right to receive something such as a benefit or service and the right to keep income or wealth which has been legitimately accumulated through work, saving or investment. Most people view the case for conditionality or reciprocity as stronger in the former case than the latter.
In John Rawls’ famous thought experiment we are asked to imagine what kind of society we would favour if we had no way of knowing where in that society’s hierarchy or distribution of talent we might find ourselves. Surely we would want a society in which everyone was guaranteed dignity and where inequality was only tolerated to the extent that it was necessary for the effective functioning of the economy?
In fact, in what may be a reflection of our tendency to be too optimistic about our own prospects, it seems most people favour a society in which it is possible for a fortunate few to achieve very high rewards, as long as they are deemed to have come into them legitimately through talent, hard work or even good luck. Not only is the public quite relaxed about unequal rewards but, to the chagrin of egalitarians, there is a suspicion of the motives of those who want to constrain the privileges of society’s winners.
But while it is not clear that we see being financially successful as itself creating social obligations (beyond obeying the law and paying reasonable taxes), I want to suggest that there are two privileges which do. The first is the entitlement to gain future advantage from current success; the second is the entitlement to pass on such privilege.
Think of it as a race. Regardless of how good or bad we are at running, it seems we are happy to accept the winner of a race receiving a much bigger prize than the runners up. We don’t think the winners incur any particular obligations even if they are handsomely rewarded. However, what if we said that the winner of today’s race could use their winnings to get a major head start in tomorrow’s race? Or if we agreed that the winner of today’s race could buy a life-changing hard start for his daughter running her first race? Both these consequences of inequality offend deeply held common sense ideas of fairness.
But in reality, and for various reasons, we do allow people to use today’s success to buy advantages for tomorrow, and to pass on their advantages to their offspring, even though this necessarily means a relative disadvantage for everyone else. Arguably, the level of intervention and redistribution which would be necessary to stop advantages being exploited and inherited would have damaging side effects. Nevertheless, it can be argued that it is the freedom to exploit and bequeath advantage which provides the basis for arguing that the well-off in society have greater obligations than less fortunate citizens.
To recap, I have argued in earlier posts in this series that to survive in terms of financial sustainability and public legitimacy, entitlements to welfare and public services need to be accompanied by rules and expectations of obligation and reciprocity. Similarly, if society is not to be unfair and seen to be so, the freedom we provide to the well off to exploit and pass on privilege should also be tempered by rules and expectations.
In my final post in this series, by connecting the RSA’s mission of enhancing human capability to my thoughts about entitlement and obligation, I will try to weave a story about the social values we need to deal with decades of austerity.
The more you put in, the more you get out?
Welfare reform exhibits a well-known ‘trilemma’: out of the three main goals of policy – helping the poorest, incentivising work and saving, and containing expenditure – it is possible to choose any two but never all three. This, in essence, is why the contributory principle, which was only ever partially embedded in the welfare state, has been consistently eroded by governments of all parties. As John Hills, perhaps the UK’s leading welfare expert, argued in a paper back in 2003:
‘ under governments of the Left, arguments in favour of inclusion have been predominant, non-contributory benefits expanded and contribution conditions softened; under those of the Right, the emphasis has been on focussing limited resources on the poorest through means-testing’
Those on the political right are particularly prone to criticise what they allege to be a ‘something for nothing’ welfare culture. The celebration of Margaret Thatcher’s reign occasioned by the release of a biopic may therefore be somewhat tempered by the recognition that reforms to pensions and benefits during her time in office were a major assault on the contributory principle. The current Government is making further inroads into what is left. The Employment and Support Allowance is in part a form of insurance against losing employment through ill health. Those who have paid into National Insurance were implicitly buying this protection, but now it is being cut back.
The idea that what you get out of the welfare state might in some way reflect what you put in is not, however, something which should be consigned to history. Reviving this idea might be part of addressing ‘the paradox of entitlement’, the subject of several of my recent posts.
Yesterday saw an alliance of organisations (including the RSA) representing a wide array of interests and views calling on the Government and opposition to work swiftly towards a new funding regime for social care. The Coalition appeared to knock the recommendations of the Dilnot Commission on Social Care funding into the long grass when they were published last July, but talks are forthcoming to try to develop a new cross party consensus on reform.
Social care is in crisis and – as I have suggested in past posts – it may now represent the first major area of welfare provision since the creation of the modern welfare state demonstrably to deteriorate. Many in the sector argue that a new funding regime is the essential prerequisite for creating a more stable system capable of providing decency to all in frail old age.
In a sense the Dilnot package includes a modern form of the contributory principle. The Commission proposed a state guarantee to pick up all social care costs above a fixed limit (£35,000 was suggested by the Commission). As well as addressing the perceived unfairness of older people giving up lifetime’s assets to pay for care, through capping the total an individual can be asked to pay this proposal seeks to create the basis for a market in social care insurance. Dilnot also proposed that the means test limit below which people are not required to pay for any care should be significantly increased.
Some on the left criticised Dilnot on the grounds that his package was more geared to helping the middle class than the poor. But any attempt to create a financially sustainable system in which all have a stake involves combining a universal safety net with a partnership between the state and those who can afford to meet some of their care costs.
Another response to an ageing society is the auto-enrolment pensions system designed by Labour but from later this year being gradually rolled out by the Coalition. Indeed in combining individual contributions, employer contributions and a Government contribution (through a tax break) the new system echoes one of the first manifestations of the modern welfare state: Lloyd George’s famous ‘Ninepence for Fourpence’ health insurance scheme unveiled in 1911.
The student loan system too is a form of contributory welfare. Students’ courses are funded by a combination of direct funding and underwriting of loans by the state and income contingent student contributions.
It is well understood that the classic Beveridge model contributory system has largely withered away. It is less often noted that new models and proposals for state-individual contributory partnerships are emerging. Squeezed budgets and rising costs mean that new contributory arrangements are necessary – indeed inevitable - if universal entitlements (including core public services) are to be protected.
An important task for politicians and thought leaders is to explore the rationale, values and expectations necessary to underpin a new contributory principle.
Desperate times call for …
The shocking unemployment statistics demand a proper response from our political class but will we see it?
Largely because the media exploit any such admission, politicians are loath to admit that their judgements are often fine and that all significant policy decisions involve risks and downsides as well as benefits. As a former Government advisor and a long time policy wonk I know that any honest evaluation of a policy decision involves weighing up good and bad points; if there was a policy out there that had only benefits it would have been identified and implemented a long time ago.
Today the Government is blaming the global financial crisis for the unemployment statistics while Labour (a cogent but slightly too cheerful Liam Byrne) is calling on George Osborne to adopt the Opposition’s five point recovery plan. Both Parties claim their approach is entirely right and the other side’s totally wrong. Neither claim is true. More importantly, neither offers any comfort to the almost one in five 16-24 year olds now out of work.
In such extreme circumstances it is worth the thought experiment of exploring the what the political parties might do now if they genuinely put the public interest first.
In economic terms, there is little question the Coalition could press its foot less hard on the austerity pedal and put more money into jobs, wages and purses without being grossly irresponsible. This seems to be the majority view of economists, and even international bodies like the IMF are warning that austerity could be self-defeating. But the Government is also right when it says that credibility is important in volatile markets. An apparent fiscal u-turn in the UK could be portrayed as panic or the beginning of a bigger political capitulation and this could lead, among other things, to an increase in the interest we have to pay on our national borrowing.
In this equation, politics matter. The recent gridlock in America had a direct impact on the country’s economic rating and on the markets. So, if the Coalition and Labour were to agree a package which combined a short term injection of public funding with a cross-party agreement to stick to a now slightly extended period of fiscal balancing it could powerfully reassure markets that the UK isn’t about to give up the ghost on getting the finances under control. The Coalition is the elected Government so it would be its prerogative to determine the content of the growth package, but Labour could show statesmanship (which surely wouldn’t do Ed Miliband’s credibility any harm) by supporting the general thrust of the package and being measured in its criticisms and alternatives.
The Osborne phrase ‘We’re all in this together’ is now used exclusively to taunt the Coalition, but if the political class were able to up their game and collaborate it might take on a new resonance. In such a context part of a growth plan could be to call on business, employee organisations and ordinary citizens to make their contribution to getting us through these dark hours. In the year after the credit crunch there were many examples of employees taking voluntary pay cuts or agreeing work sharing schemes.
This morning an academic on Radio 4 called for more workers to offer to reduce their hours to create more jobs. A growth plan could include temporary regulations to enable employees to take a fixed term reduction in their hours in the context of an agreement by the employer to maintain the organisation’s wage bill but allocate the released hours and costs to create new jobs. Even if such measures were marginal in their impact they would at least lift the national mood out of the terrible despond in which it is now mired.
Like any competitive activity, the problem of changing political conventions lies in who goes first. For the Government to ask the Opposition to enter into talks might look like weakness and, anyway, as I said, the Coalition is the elected administration. So, my bold – and no doubt naïve and doomed – appeal for a cross party strategy to offer hope to the nation’s jobless – would have to start with Labour.
How about changing the current party line – which is to demand the Government adopt Labour’s five point plan – and instead offer to enter into genuine talks with the Coalition about a national recovery plan. The Coalition would probably scoff but the voters, at least, might appreciate it.
Public service savings – no pain, no gain
Filed under: Credit crunch, Politics, Public policy, The RSA
Fresh on the heels of Tessa Jowell’s welcome call for politicians to be more open and honest about hard choices (see yesterday’s post), we have the Government and Opposition implying that it is only if we elect the other lot next year that we will face public spending cuts. Perhaps Tessa should send a copy of her speech to Andrew Lansley and Liam Byrne.
We need significant public sector reform so that services are more effective and responsive, and particularly (as 2020 Public Services Trust Director, Ben Lucas, said at a Number Ten seminar this morning) to embed the idea that most public service outcomes result not from ‘delivery’ but from the combined efforts of the state, communities and individuals. But this kind of change will be gradual, and although it will ultimately create better services, it will not reap savings in the short term.
In as much as politicians, officials and advisors are facing up to the coming spending crunch it is possible to distinguish an important difference in emphasis between Labour and Conservative.
There are some specific cuts to which the Conservatives are pledged, for example scrapping Regional Development Agencies. But, as Philip Hammond, Shadow Chief Secretary to the Treasury, emphasised here at the RSA last month, the Conservatvies put great store by better management. They genuinely believe it is possible to find major savings (of the order of ten percent) through improvements to the way Government works. In essence, this involves an updating of the Thatcher strategy of Next Steps agencies and contracting out to create a leaner, meaner government machine.
The Conservatives are unapologetically technocratic saying that the ways to make a step change in productivity are clear but that Labour has failed to pursue them due to vested producer interests and the inability of ministers to control the growth of targets and initiatives. There may be much to this, but the kind of savings the Conservatives are aiming for still won’t be achieved without resistance from both workers and the public.
Labour also thinks it may be possible to save a lot of money without damaging public service entitlements (indeed the Government’s soon to be unveiled public service reform plan is likely to propose putting key entitlements on a statutory footing). But Brown’s advisors are also stressing the potential of decentralisation.
Following on from a report compiled by Sir Michael Bichard, a former Permanent Secretary and now Director of the Institute for Government, a series of pilot studies has been established looking comprehensively at the public money spent in specific local authority areas. I understand that early indications suggest a huge amount of waste, over-complication, duplication, and, more profoundly, a failure to get funding directly to the problems it is supposed to be addressing. The main cause of this lies in the overload of targets, funding streams, guidance and accountability mechanisms spewing forth from Whitehall. Labour’s plan is therefore to embed key public service improvements from the last ten years (and there have been many) while devolving to local government as much as possible beyond these core entitlements.
Labour’s plan is bold and makes sense as policy and politics. But – and this is a huge but – it will only be credible if Number Ten is willing to tackle the dysfunctionality of the political management of central Government. Problems like these need to be dealt with: there are far too many ministers, all of whom think it is their job to generate initiatives; ideas are allowed to be developed and launched without any reference to those at the front line; change management and the time it takes is not treated seriously; there is complete lack of realism about how far the centre’s intended messages actually reach; civil servants fail to see or warn (or be allowed to warn) their masters that every new target or piece of guidance had an adverse impact on all these existing targets and instructions (not to mention local morale).
However well intentioned Brown’s advisors are, they will not achieve real change unless they do something about this. The process of Whitehall capability reviews started when I was in Number Ten but, despite my best efforts, the political management of departments was largely excluded (even though everyone knew this was the biggest single problem).
Labour’s reform plan won’t be taken seriously, nor will it deserve to be, unless it involves a profound shift in the way policy is made at the centre. And if you want me to make this more concrete I will: I would find it impossible to believe in any plan to decentralise power from the centre that did not commit to a substantial reduction in the number of Government ministers
Social mobility, the brain and good news for the RSA
Filed under: Public policy, Social brain, The RSA
As I write I’m listening to the Today programme item about the social mobility white paper. The RSA will soon be hearing from someone whose work may be one of the most important contributions to this debate.
After yesterday’s discussion on this site it is interesting that the Government is leading with the idea of paying the best teachers to teach in the most deprived schools. This is a straightforward piece of public service redistribution, and no bad thing for that. As always, the success of such an initiative will depend on the way it is implemented; just because someone succeeds as a teacher in a middle class school in Richmond upon Thames doesn’t mean they would do as well in a school like Lilian Bayliss, which includes my younger son amongst its pupils. Indeed, arguably, in a school like Bayliss, which is overwhelmingly made up of working class children from minority ethnic families, it is important to inspire the pupils with successful teachers with a similar background to the pupils.
Liam Byrne has just disagreed with David Willetts that the Government is putting too much emphasis on early years in seeking to tackle entrenched inequality. Whether the Government’s interventions work is one question but the evidence that infant experience does have a major impact of future prospects does seem to be getting stronger. Yesterday we heard the fantastic news that our nominee for the Benjamin Franklin Medal (awarded to an international figure who has contributed to enlightenment thought) has accepted; she is Professor Elizabeth Gould from Princeton University.
Professor Gould is responsible for one of the recent decade’s most important breakthroughs in neuroscience. Taking on one of the most established and dogmatically adhered to nostrums of her discipline, Gould painstakingly demonstrated the existence of neurogenesis – the generation of new neurons – in mammals. And, even more significantly for social policy, she found in her work with monkeys that the scope for neurogenesis - in other words the ability of the brain to generate and repair brain cells – was significantly affected by the circumstances in which the monkey was reared. Mothers who had experienced high stress and suffered from being low in the dominance hierarchy produced offspring with a lower capacity for neurogenesis.
The good news, and why David Willetts may be right to question too great an emphasis on the early years, is that these effects can be corrected in later life. If monkeys brought up in deprived circumstances were then transferred to stimulating environments, their capacity for neurogenesis recovered, over time, to the average.
It is fantastic that Professor Gould will soon be sharing her latest research findings and their social implications with an RSA audience; we’ll be sure to invite Liam Byrne and David Willets.
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