"The welfare state – time for a contract?" London 2007
Jim Murphy (Labour)
“We have made progress – but we need to go further”
This is a common phrase that myself and many of my colleagues in Government often use – but what does this actually mean? It can’t just be more of the same. “To go further” means that we have to look for new ways of doing things to achieve the goals to which we aspire; some of which we have yet to achieve.
In 1997, we developed solutions to the problems of the day. The New Deal, the National Minimum Wage, transforming our laws on race, disability, age and sexuality as well as the record investment in public services, were all radical in their time. But now these policies have been accepted by most as part of a progressive political settlement.
We need to maintain our ambition, and be as radical now as we were back then. Solutions tailored to today’s problems will not be successful if they are bound by yesterday’s policies.
The key challenge for welfare now, it is to deliver for those people who face the most deep-rooted barriers to work.
Why? Because we cannot write any one off. Not just because of a sense of social injustice. Not just because children should have the right to grow up free of poverty. But also, because if we do, the economy as a whole will suffer – and every single member of our society will see the consequences.
Achieving this goal of a right to work for all, in the context of ever more rapid global and demographic change, will mean reaching out to those furthest from the labour market, the most disadvantaged and excluded in our society. It will mean extending the boundaries of welfare further than ever before.
This seminar, as you know, is part of a series of seminars which are contributing to the Pathways to the future process – announced by the Prime Minister and Chancellor in the Autumn.
We are at a crucial stage in the evolution of the welfare state. The reforms over the last decade have changed the focus for the vast majority of our customers – from that of passive dependency to active engagement with the state. Throughout this, either implicitly or explicitly, the contract between the citizen and state has evolved.
And if you look at progress over the last decade, the where the contract has been expanded the furthest, and the more explicit the contract has been, the more success we have had.
Take Jobseekers’ Allowance alongside the New Deal. A written contract outlining what is expected of the customer, and what they can expect in return. Results are clear. Youth unemployment has been virtually eradicated.
Take the proposed Employment and Support Allowance – again, an agreed set of objectives, with rights and responsibilities embedded at the heart of the benefit design. Based on the Pathways to work model which has been the most successful programme for people with health conditions and disabilities across the world.
These are founded on a something for something premise. Government to provide more support; customers to have a duty to take up that support. This contract has revolutionised the way in which the state and the citizen interact – and it has been crucial for the success of our welfare to work policies so far.
Therefore, to achieve the challenges that we are faced with over the next decade, I believe we have to widen and extend the contract further than we ever have before.
The contract we are talking about here is a complex one. A citizen is at times, a customer of the welfare state; but is always a taxpayer. And the state is, at times, the direct service provider; but is always the guarantor of its citizens’ rights.
It is across this diverse network of relationships that the contract must deliver. And to deliver for the next decade, I think there are three key elements that will be need to underpin to its evolution and construction over the years to come.
Firstly – Given that our aspiration is to extend the right of work to all; the assumption of a person’s ability to engage with the labour market should be the default position when determining a person’s interaction with the welfare state. But the pre-requisite to this, has to be that the Government fulfils its responsibilities of promoting and protecting the right to work for all.
The passage of the Welfare Reform Bill shows how far we have come in acheiving the right balance. The proposals introduce additional responsibilities to a group of people who it would not have been conceivable to place conditionality on a decade ago. Yet because we have committed to providing extra support, the overwhelming majority of stakeholders have welcomed this.
We would not be successful had this support not been guaranteed. We know that increased responsibilities on a citizen can only be embedded in a system if they have increased rights. We are committed to our part of the bargain – our side of the contract.
Given that is the case, I believe the primacy of the belief that all have the potential to work, should be at the heart of the citizen’s side of the contract. To not, I feel, is an insult to our customers, and a get-out clause for the state.
Secondly – even if the state takes a step back from delivery; it does not take a step back from responsibility.
As I have said, the key challenge for welfare is to reach the hardest to help. Our success will hinge on our ability to understand the specific barriers these groups face; and our capacity to tailor support to the individual in the community. The state cannot do this alone. The skills of local providers will be increasingly more important.
So where the state is removed from direct service provision, it must take on the role of arbiter and monitor of the contract. The market can not, should not and will not be left unchecked. Whilst we must harness the potential of the market, we must also be strong in holding providers to account on behalf of our customers.
This is about much more than the nuts and bolts of how provision is delivered. It is about ensuring that provision, no matter what its derivation, is underpinned by our values and our priorities.
And thirdly – the citizen as a taxpayer must never be neglected.
We must maintain the right to provide progressive public services.
And to do this, we must take it upon ourselves to promote a sense of progressive self-interest.
We need to reinvigorate the sense of social contract – that what happens to our neighbours, matters to us.
Over the last decade, benefit expenditure on Jobseekers Allowance, incapacity benefits and lone parents has fallen by around five billion in real terms. But this is not simply an economic argument. Progressive self interest is about making the wider connection between personal aspiration and the continuing right of the State to enable collective solutions that meet those aspirations. It is also about re-energising the consent for Labour’s values and policies.
But even those who are already won over on this argument need to be convinced that our way of doing things is the right way of doing things. To do this, we have to ensure efficient and effective service provision.
In this, we must be bold. If there are providers out there who can deliver a service better than the state, we should not shy away. Just because it is the Government’s role to ensure there is service provision for all; it does not necessarily follow that it is also Government’s role to deliver that service. Rather it is the Government’s responsibility to ensure that the provision that people have is the best service they can get.
I believe our success in tacking the challenges created by demographic change and globalisation rests not just on technological improvements or scientific advancement. It rests on people. Individuals, able to fulfil their potential - crucial for them, and critical for the country.
It is only through developing a better relationship between citizen and the state that we can meet our goals. And improving that relationship means developing and enhancing that relationship on all sides – for customers, the state and taxpayers.
We sometimes talk about rights and responsibilities as if it is a balancing act which we need to perform in order to maintain an equilibrium.
But the ultimate responsibility of the state is to promote and protect its citizen’s rights. This includes the right to work.
The ultimate responsibility of the citizen is to utilise and capitalise on that right.
The contract is key. If we can get the balance right, if we can all honour the deal that we make, we will all reap the reward.