Fair Welfare

Fair Welfare

The welfare state in Britain has become uniquely unpopular. A major three-year research programme, including polling and focus groups by the Centre for Policy Studies and Public First investigating public attitudes to the welfare state, has concluded that fairness is at the heart of the problem.

In YouGov polling both before and after the pandemic, voters said – by a margin of more than 2:1 – that the welfare system was unfair.

One of the key reasons for this is because the system does not recognise previous years of contribution to the system. 55% of those surveyed by YouGov agree with the idea of paying higher benefits to people who have worked and contributed to the system for longer. 60% agreed that it was unfair that people who had built up savings were prevented from claiming benefits, with large majorities among both Conservative and Labour voters.

YouGov’s polling found a sharp shift between September 2018 and February 2021 in attitudes to benefits, with a 16-point swing in favour of the idea that benefits are too low. However, voters did not support the retention of the Universal Credit uplift, or paying more taxes for higher benefits. There was still strong support for the idea that the benefit system does not do enough to make people find work – and for policies designed to restore an element of contribution to the system.

The think tank is therefore proposing a return to ‘the stamp’ – the symbolic Beveridge-era connection between putting in and claiming benefits. Those with a record of work should receive a one-year boost to their UC of £5/week for every five years worked, and receive unemployment benefits unconditionally for three months (up to a maximum of a year), rather than having to jump through bureaucratic hoops to prove they are trying to re-enter the job market.

The think tank argues that the Government should also abolish the rule that forces people to pay down their savings before claiming benefits – the opposite of rewarding them for doing the right thing – or at the very least increase the relevant thresholds. It should also speed up access to Universal Credit, and offer people the option of receiving payment weekly rather than monthly.

CPS polling shows significant support for this contributory agenda, with voters backing the savings proposals by 61% to 26% – significant given that the number hit by the rules has risen tenfold during the pandemic. Voters’ generosity on levels of welfare payment also shifted markedly depending on how long a claimant has been in the workforce. This agenda would be both cheap (with a total cost of less than £1 billion/year) and popular.

To strengthen the connection between contribution and reward, the think tank is also proposing that, rather than simply retaining the controversial Universal Credit uplift, the Government should reduce the taper rate at which benefits are withdrawn from 63p to 55p.This, alongside a £1,000 increase in work allowances for childless households, would effectively act as a tax cut specifically targeted at the lowest paid, allowing them to keep more of the money they earn, and offsetting the impact of ending the £20 uplift on in-work claimants. This cut to the taper would mean that a working couple with a child would be £450 per year better off than if the £20 uplift was retained.

Compared to simply retaining the controversial Universal Credit uplift this approach of the taper would save aound £3 billion.

James Heywood - Wednesday, 22nd September, 2021