Analysis of the New Labour Welfare Ideology and Policy

How and why does the government’s new deal typify new labour welfare ideology?
Are there elements of new labour welfare ideology and new deal policy which find echo in welfare ideologies and policies prevailing in early periods of welfare (Elizabethan and Victorian poor laws.
Does social liberalism influencing early 20c welfare reforms and the architecture of the Beveridge welfare state still play a part in new labour welfare ideology and the new deal?
Does the new deal and its ideological underpinnings represent a radical departure from or a continuation of new right approaches to poverty and unemployment.

Outlined below is a critical review of the present government’s New Deal policy that takes into account the influence of past and present welfare ideologies upon New Deal’s development, objectives, and procedures. Originally the government had no role in welfare provision, this was left to local parish churches, almshouses, and before their dissolution, the monasteries. Each parish decided which of the poor deserved help, and which of the poor were not deserving of help. Those that were undeserving or came from other parishes had the unsavoury choices of begging, relying on charity, finding work, or simply starving to death. Those that did receive help often had to work to earn that help. There was little understanding of the causes of unemployment or underemployment. People no longer worked because they were no longer physically capable of working, trade was poor, or because they were being idle. The first legislation to deal with welfare provision was during the reign of Richard II; it was the precursor of further intervention during Elizabethan and Victorian times, and most notably in the 20th century.

From the Elizabethan Poor Laws through to the Victorian era Poor Law Amendment Act the dominating feature of welfare ideology was that welfare provision should be as limited as possible, and that people should be dissuaded from applying for poor relief payments. Welfare payments were not a right, they were restricted to the most deserving or the most desperate, and who were often made to feel ashamed that they needed help. The Poor Laws were primarily a means of social control that were administered by the parishes, and were paid for by local ratepayers (Moran, 2005 p.14). The Poor Laws had at first been used as a way to keep families together and in their own homes. However, ratepayers resented paying for poor relief which led to the establishment of the dreaded workhouses to reduce the amount of poor relief provided. The Poor Law Amendment Act made the workhouses the normal system of providing welfare, and they imposed draconian conditions on anybody unfortunate enough to need their help. People had to undertake arduous tasks in return for receiving very basic food, clothing, and accommodation; many also had to endure the breaking up of their families. The workhouses demeaned and effectively penalised people that had been unable to help themselves (Fisher, Denver, & Benyon, 2003 p.12). Although New Deal does not humiliate benefit claimants, it does make the continuance of benefit payments dependent upon them attending their New Deal placements; they even receive small top up payments. The New Deal operates on a carrot and stick principle, whilst the Poor Laws in general, and the workhouses in particular operated on the stick principle (Department for Work and Pensions, 2004, p.4).

The welfare ideologies linked to the Poor Laws attracted criticism leading to proposals to offer welfare provisions without harsh qualifying conditions, and more generous poor relief. Research into poverty by Rowntree and others helped to change public attitudes towards the poor. Unemployment, underemployment, old age, and physical incapacity rather than idleness caused poverty. Support for changing welfare ideologies was detectable within the Liberal Party, trade unions, co-operatives, and in the Labour Party. New or, social Liberalism regarded the welfare ideology of the Poor Laws as been unjust and harsher towards the poor than it should have been. Liberal governments had intervened in the economy to introduce safety standards, yet took longer to establish a minimalist welfare state. The Liberal governments between 1906 and 1914 introduced limited old age pensions, unemployment benefits, national insurance contributions, and labour exchanges. The welfare provisions introduced by the Liberals were not universal and payments were only made to those people that had paid national insurance contributions. Payments under this system were not particularly generous, yet they prevented the people that received them from having to resort to the workhouses to survive. The welfare ideology of the Liberal governments was that the government should provide minimum levels of help to stop people becoming destitute, it allowed some people to retire without having to fear the prospect of going into the workhouse. Unemployment benefits, although they only lasted for limited periods, helped families to survive periods of unemployment without losing their homes or being forcibly separated from each other by being forced into the workhouses. Labour exchanges, the forerunners of present day Job centres, allowed people to search for employment, whilst allowing employers the opportunity to recruit workers to fill their vacancies. New Deal can be argued to share things in common with the welfare ideologies linked with New Liberalism. Firstly the unemployed are encouraged to find employment as their benefits may only be awarded for a short -term period (Department for Work and Pensions, 2004, p.3).

Whilst the welfare measures introduced by the new or social Liberals took many people out of the scope of the Poor Laws, they were not universal measures that proved inadequate for reducing poverty during the inter-war period. The Labour Party became the main exponents of expanding welfare provision, although the Labour government decided to cut unemployment benefits in 1931 in order to balance the budget. Labour had to wait until its 1945 general election victory before it could implement it’s a vision of the welfare state, heavily influenced by the Beveridge Report. The Atlee government introduced universal benefits such as Family Allowance and even benefits for people on low incomes that had not paid national insurance contributions. National insurance was expanded to cover everybody, married women that had not worked received retirement pensions based upon their husbands’ contributions (Moran, 2005, p.18). New Deal sticks with the idea of universalism, as everybody that has been unemployed for the qualifying period has to go on the scheme irrespective of their past national insurance contributions. New Deal does allow people different schemes to match all past experiences and their skills. There is flexibility as long as people are willing to on the scheme (Department for Work and Pensions, 2004, p.2).

The post-war welfare state remained virtually unaltered until the Thatcher government came into office in 1979. Thatcher objected to the ways in which the welfare state operated, as it was too generous and provided little incentive for people to find work. Thatcherite economic policies were supposed to reduce the size of public spending, yet they were responsible for unemployment rising from one million to over three million (Department for Work and Pensions, 2004, p.4). The Thatcher government responded in various ways, for instance changing the definition of unemployment and switching people from unemployment benefit to incapacity benefit or income support. The Thatcher government also introduced work and training placement schemes such as Youth Training and Training for Work to improve the employment prospects of people that had been long-term unemployed. These placement schemes can be regarded as being the direct forerunners to New Deal. They too used the carrot and stick approach; in fact people received a small top up to their benefits by joining the schemes or faced losing benefits for not going on placement. People that found employment once they had finished their placements could qualify for bonus payments as well Department for Work and Pensions, 2004, p.3). The Conservatives replaced unemployment benefit with Job-seekers Allowance that placed a greater emphasis on people actively seeking employment. People deemed unwilling to search for work either lost benefit outright or had it reduced. New Labour has not removed the sanctions available to decision makers to penalise people that are not actively seeking work (Seldon & Kavanagh, 2005 p.416).

New Deal has elements that make it compulsory for people to go on the scheme. New Deal differs from previous schemes in that more groups are liable to go through it. New Labour was keen that New Deal would improve employment rates amongst the under 25s, lone parents, the disabled and the over 50s. These groups are traditionally the groups that find it hardest to find jobs. New Deal places an increased onus upon people to increase their efforts to gain a job after finishing their placements. In return, people are given extra advice on gaining jobs by New Deal advisers Department for Work and Pensions, 2004, p.4). There are incentives to help encourage people to get jobs after New Deal. For instance, if they take a low paid job they have their income boosted by working tax credits. New Deal has arguably succeeded in reducing the numbers of long-term unemployed and making people more employable. It also provides advise for people such as lone parents that had not previously been helped when looking to gain employment (Department for Work and Pensions, 2004, p.3).

Thus the New Deal has been influenced by various welfare ideologies from past and present. The idea behind New Deal is a simple one, getting people back in to work by giving them up to date training and work experience, thereby improving employment prospects. Just like the welfare provided under the auspices of the Poor Laws people have to work to gain payments, if they are unwilling to do so they lose entitlement. It differs from the Poor Laws in that people receive extra from going on the scheme and can receive extra for finding work after completing it. In other respects, New Deal is based on welfare ideologies that are influenced by New Liberalism and the welfare state established by the Atlee government. It is available to anybody that has been unemployed long enough. There are also elements that be traced to ideas from the New Right, provide incentives for those do well, and penalise those that will not take part.

Bibliography

Department for Work and Pensions (2004) Building on New Deal: Local solutions meeting individual needs, Her Majesty’s Stationary Office, London

Fisher J, Denver D, & Benyon J, (2003) Central Debates in British Politics, Longman, London

Moran M, (2005) Politic and Governance in the UK, Palgrave, Basingstoke

Seldon A & Kavanagh D, (2005) The Blair Effect 2001 – 5, Cambridge University Press, Cambridge