In 1945, the UK’s welfare state was set up to address the want, need and misery caused by unemployment. Seventy-five years later, prior to the Covid-19 pandemic, we had almost full employment in the UK – and yet we still have massive levels of poverty and precarity experienced by people in work.
Political priorities do not currently offer a guide to addressing these challenges. We can no longer imagine that if we get everybody into the labour market, everything will be fine. That’s why we need to rethink the welfare state for the 21st century. To do this, we need to think differently: not about providing money, but about providing services.
And we must do this now. Even before the pandemic, our economy was going through a structural change. The next stage of AI and automation is going to put huge downward pressure on all kinds of jobs, particularly those that don’t have a high barrier to entry. We need new jobs that address 21st-century issues, such as de-industrialisation, the climate crisis and pollution. People need to be better educated and better supported to access those jobs.
A new welfare state of services must help build capacities and capabilities that enable people to make further choices: to continue with their education; to retrain; to move; or to take a risk. Our current welfare state doesn’t do this. It’s a hugely complex system that gives people little bits of money. Universal Basic Income has been touted as a solution. But arguing “What we’re doing at the moment isn’t working, so let’s give everyone a bit more cash” isn’t very radical, to my mind. It’s a very neoliberal idea:
So instead of giving people money, why not give them the services that use that money, for free? Two of the biggest costs for those in the lowest 30% of earners are transport and digital services. These are both essential for improving life chances. Around seven per cent of the population in the UK have no internet access. If you can’t go online, you can’t apply for a job, or get information about a job that is sent to an email address you don’t have.
Many more people have very poor access: they might have a basic phone contract. Try filling in a job application form on your mobile phone. It’s not easy. It’s not just about employment, either. One man told us that he can’t get a GP appointment because they are all online and they open for booking at 7am. The library, with internet access, opens at 11am. “What am I supposed to do?” he asked. “Break into the library?”
There’s not much point in having clever ideas if you are not sharing them with people who live next to you. So, at the Institute for Global Prosperity (IGP) at The Bartlett, we are working very closely with a number of local authorities on this idea, particularly in London.
Universal Basic Income has been touted as a solution. But arguing “What we’re doing at the moment isn’t working, so let’s give everyone a bit more cash” isn’t very radical, to my mind.
And we are designing services alongside the people who need them. Camden council, for example, is now seriously considering giving out free Travelcards to unemployed people. Another early-stage idea is to provide housing estates and communities with free internet access and data in the home: enough data for children to access education; to enable older people to connect; to allow people to apply for jobs or book GP appointments.
For example, we are currently collaborating with Poplar HARCA, a housing association in East London, on the evaluation of a small, free broadband internet pilot with 100 households. Preliminary findings from this project, and the UBS digital pilot run by the Camden CC Inclusive Economy team, show the big impact that access – or lack thereof – to internet may have on families in terms of employability prospects and formal education opportunities, increased household expenses and insecurity, access to government services, and wellbeing and social connectedness. There is also a purpose in human contact that isn’t just instrumental but is directed towards the general aspiration that we could all live better together.
These services enable people to become functioning members of society, and to build an economy of belonging in the UK, where people feel that the economy is working for them. They simultaneously address need and structural problems. This will help to build what we at the IGP call sustainable prosperity. This is all about redefining prosperity, so that it isn’t just about economics, wealth and income. It’s about all the things you need to thrive and flourish: health, social contact, aspiration and attainment.
There are big challenges, of course, and big barriers. We have to do this in a way that builds what we’re desperately lacking at the moment: social solidarity; empathy for others; and connection between us and our communities. We have seen the rise of populism, an exclusionary way of living, arising from people’s deep anxiety that they don’t have enough for themselves.
Pre-Covid, we had this attitude that you can’t just hand out money to people. And then suddenly we realised how badly we needed all our key workers, and how badly we pay all those who make our society function. For a long time, we’ve believed that the economy runs things, that the market decides. The extraction of value for the greater profit of the individual has been the dominant ideology of the day – and we are living with the consequences. But, now, we realise that we need an economy that works for us. We need a system that makes life better for all of us.