?by Nick Pearce
Ed Miliband used his speech yesterday to bring the contributory principle back into the heart of Labour thinking on welfare reform, which got Frank Field and Labour bloggers very excited.
Although the Labour leader didn’t mention it, it was fitting that he referred to the principle of contribution this year, since 2011 is the centenary of the great 1911 national insurance act, which brought in unemployment and sickness insurance (those were the days when a progressive alliance really did achieve bold reforms).
It is less clear, however, that the contributory principle can really serve to underpin a modernisation of the welfare state for the twenty first century. It only now covers around 10% of working age benefits, and it is being scaled back further under the government’s plans to cut employment support allowance.
Where it still has real purchase is in respect of the basic state pension, for which the earnings link has been restored. But even here fairness and equality for women have demanded an extension of the notion of contribution to cover caring activities, as well as work (while the government plans a single-tier flat rate state pension for which a contributory record would not strictly be necessary).
Moreover, it is not possible simply to withdraw public services or benefits for people who are in need. Children must be housed and educated, whatever their parents have done. Article 3 of the human rights act also places a floor under the welfare state, preventing people from suffering humiliating and degrading treatment through destitution.
Nonetheless, reciprocity is vital to public support for the welfare state and the strength of community solidarity. So Labour is not on the wrong track. But it needs to think about the notion of contribution in broader terms: not just to embrace caring and community activities, but to mean reciprocity across a range of services and entitlements, whether funded by general taxation, National insurance or hybrid state-private insurance policies. Social housing is an obvious candidate for reform in these terms, as Miliband intimated (although need as well as contribution must figure in social housing policy, and the supply of housing must be expanded regardless). Post-Dilnot, social care could become another. Other services – such as childcare – can be seen as part of the social contract, even if earned entitlement does not mediate access to them; after all, the NHS is hugely popular precisely because it guarantees universal access based on need, not worth or desert.
By talking about responsibility from top-to-bottom of society, Miliband has also refused to allow this debate to be focused on the poorest alone. While right-wing think-tanks and others want social justice to be reduced to what happens to an “underclass”, Labour’s leader is keeping the whole of society in view (on which I have more to say in the forthcoming edition of IPPR’s house journal). Quite right.
Nick Pearce is director of IPPR.
