Welfare Policy

Defining welfare policy

Welfare policies are usually implemented through the welfare state. Let's consider definitions of both.

Welfare policy research in sociology

Sociologists are interested in welfare policy because it is related to several societal structures and processes, such as the role of the state, poverty, inequality, the redistribution of wealth, class issues, and more.

Research often focuses on the impacts of social welfare policy on, for example, the social mobility and life chances of working-class groups and individuals.

The impact of welfare policy on families

Welfare policy can significantly impact both the day-to-day lives and the overarching choices, health, careers, and outcomes of families, especially for poorer and working-class families. This is because, due to a range of factors, these families may struggle to provide for themselves and their children without the assistance of the government.

To better understand why and how this is, let's now examine the different types of welfare policies that have been implemented: universal and means-tested welfare benefits.

Social welfare policy: universal and means-tested

Welfare is not provided equally and in the same manner to everyone. Let's look at the difference between universal and means-tested benefits and some examples of each.

Universal welfare

This refers to welfare services that are accessible to every legitimate citizen of a country, regardless of whether their income is low enough to "qualify" for them. They are implemented in order to reduce poverty and enable everyone to participate in the ordinary functions of life.

Universal welfare benefits were introduced because means-tested benefits (explored below) are for only the very poor, and have a significant stigma attached to them. Welfare that is available to all ensures that people who have jobs and work very hard do not end up in poverty due to not qualifying or feeling comfortable claiming benefits.

This system of welfare is favoured by Social Democrats. It fosters collective responsibility through the state's redistribution of taxes, thereby taking care of people in society. Universal benefits like state pensions, healthcare and education are accessible to everyone.

Sociologists such as Anthony Giddens (1998) consider "social equality” to mean social inclusion, and believe that everyone should be encouraged, through state welfare if necessary, to participate in the society in which they live.

Examples of universal welfare policies

• The NHS

• Free state education

• Some social care services

• Personal Independence Payment (which has replaced Disability Living Allowance for adults under pension age)

• Attendance Allowance (for those of pension age)

Criticisms of universal welfare systems

Universal welfare provision is considered harmful to society by some theorists. New Right thinker David Marsland criticises it because in his opinion:

• it limits personal freedoms and the amount of choice available

• it is "abused" and does not actually help those who most desperately need aid

• it creates an "underclass" of poor people who engage in crime/illicit activity and do not participate in "normal" social rituals

• it creates a "dependency culture" where people are trapped in poverty and dependent on the state for survival

Fig. 1 - Free state education is an example of universal welfare.

Means-tested welfare

In contrast to universal welfare provision, some benefits are means-tested - they are contingent on the amount of income and capital an individual possesses. What this means in practice is that means-tested benefits are only available to people who can demonstrate that their income and wealth are below a certain level.

This approach is preferred by the New Right and is based on notions of individual responsibility and "self-help". As a concept, self-help differentiates between the "deserving" and "undeserving" poor. Welfare that is means-tested is granted to people who are "poor enough" to "deserve" welfare aid. Those who are not should simply work to lift themselves out of poverty.

New Right logic dictates that by examining each individual's financial situation, money is saved from being given to people who are "too lazy" to work. This frees up taxpayers' money for more worthy causes such as hospitals, schools, and people who are in genuine need.

Examples of means-tested welfare benefits

• Income-based Jobseeker’s Allowance

• Income-related Employment and Support Allowance

• Income Support

• Pension Credit

• Tax Credits (Child Tax Credit and Working Tax Credit)

• Housing Benefit

• Council Tax Support

• Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)

• Universal Credit

Criticisms of means-tested welfare systems

• Since means-tested benefits are reserved only for the poorest in society, people who earn slightly above the minimum threshold to "deserve" help but are still struggling financially are stuck living in poverty. This is known as the poverty trap.

• The poverty trap can actually contribute to a "dependency culture" because people may prefer to live on benefits than to work (and earn very little while receiving no welfare).

• The stigma associated with proving one's income levels are "low enough" and receiving means-tested benefits can lead to people not claiming what they need.

Welfare policy examples

The history of the welfare state in the UK and associated welfare policies is long and very complex. We will go through examples of some of the major policies implemented by the different governments after the Second World War, collated by Robert Page (2007).

Post-war Labour welfare policies, 1945–1951

After it won the general election of 1945, the Labour Party was tasked with repairing a nation ravaged by war. It focused on eradicating the 5 "Giant Evils" in society (Want, Disease, Ignorance, Squalor and Idleness). Labour's philosophy was to implement policy measures that would help people in the UK "from the cradle to the grave." Among the laws that they passed were:

• The National Insurance Act 1946

Under this scheme, every citizen who made the required flat-rate contributions was entitled to claim a range of flat-rate benefits at the time of need. This included unemployment benefits, sickness benefits, dependants’ allowances, maternity payments, retirement pensions and a death grant.

• The National Insurance (Industrial Injuries) Act 1946

This act meant that the state, rather than employers and private insurers, assumed responsibility for compensating employees who were injured at work.

• The National Assistance Act 1948

This was passed to provide means-tested welfare aid for those who did not qualify for National Insurance benefits.

Mixed party welfare policies, 1951–1979

The period between 1951 and 1979 has often been called the era of the "post-war consensus" - a period in which both Conservative and Labour governments recognised the importance of a mixed economy and welfare state.

Modern Conservative welfare, 1951–64 and 1970–74

The modern Conservative party, after being defeated in 1945, now accepted the importance of the welfare state and of balancing social welfare and Conservative non-interventionist principles. Nevertheless, they did not enforce any significant reductions or increases in state welfare provision - certainly not to the point of reaching a consensus with Labour. Some aspects of their approach were:

• The introduction of NHS charges

• A contraction of the school building programme

• Modest increases in social security expenditure

Revisionist Democratic Socialist Labour policies, 1964–70 and 1974–79

At this time, Labour still affirmed its commitment to social equality and the elimination of poverty. They also recognised, though, that they needed to pursue a more economical, growth-led approach to avoid deeply unpopular measures such as austerity.

Unfortunately, Labour was severely impacted by a number of economic difficulties that reduced their ability to pursue the revisionist Democratic Socialist approach. A number of their policies include:

• Less stigmatising benefit procedures were introduced in the process of claiming social security, moving to a more ‘rights-based’ service.

• Increase in National Insurance benefit levels - earnings rules for widows were abolished and earnings-related unemployment and sickness benefits were introduced.

• Improvement of comprehensive secondary education.

Neoliberal Conservative welfare policies, 1979–1997

This era is regarded as very influential in the development of welfare policies in the UK. This is because it constituted the first real challenge to the post-war welfare state. Conservative governments, influenced by neoliberal and New Right ideologies, systematically criticised and crippled the welfare state.

Up until this period, the welfare state was viewed as an essential pillar of post-war British society. Now, it was being blamed for contributing to economic failure, inefficiency and deep societal problems. This led to serious cuts in welfare expenditure, such as:

• The 1980 Housing Act was introduced, which reduced the amount of social housing available for public use by putting council houses up for sale

• The implementation of the 1980 Education Act limited the duties of local authorities to provide schoolchildren with meals and transport

• There was more emphasis on means-tested benefits, and grants to people in poverty were replaced with loans

• Charges for dental and eye issues as well as prescription charges were either introduced or increased

• Grants for students were replaced with loans

• The CSA (Child Support Agency) was introduced to force absent fathers to assume financial responsibility for their children

Fig. 2 - Dental charges were increased by the Conservative government.

New Labour welfare policies, 1997-2010

After two decades of not being in power, the Labour Party rebranded itself as ‘New’ Labour, indicating its desire to follow a different path from previous post-war Labour governments. It was clear that they needed to reposition themselves on economic and social issues in order to win back the nation's support.

New Labour, therefore, decided to enforce policies that would reconcile welfare with work - embracing the economy and free-market principles. Influenced by Anthony Giddens' (1994) conception of a "third-way" approach between socialism and capitalism, the party set out to "modernise" the welfare state through:

• The New Deal (1997) (renamed Flexible New Deal in 2009), was a scheme to help unemployed young people find work. Additional programmes to target lone parents, disabled people and those over the age of 50 were also implemented one by one.

• The statutory minimum wage (1997) (renamed the National Living Wage in 2016) was a minimum level of pay businesses must pay their employees, set up by the government.

• Working Family Tax Credits (eventually displaced by two separate tax credits, the Working Tax Credit and the Child Tax Credit in April 2003) were introduced

• The National Childcare Strategy was designed to supply more affordable childcare for children up to the age of 14