David Cameron wanted to be different from his Conservative predecessors, who promised to modernise before tacking right.
But he is on the same path. And though the battle over inheritance tax – where Labour shamefully capitulated – has received most attention, it is the Tory welfare proposals inspired by the Stateside ‘Wisconsin model’ which best illustrate how compassionate conservatism is disguising a new radicalism on the right.
The Wisconsin reforms of the late 1980s were taken nationwide by Bill Clinton in 1996 who, triangulating in search of a second term, promised ‘to end welfare as we know it’.
The Clinton package was a strange cocktail: more help in jobsearch for the unemployed appealed to the left; noisy moralising about marriage pleased social conservatives; and removing the welfare safety net of Roosevelt’s New Deal delighted the ‘small staters’.
Benefits were time limited – in many states to around two years. This was a lifetime limit, with entitlement calculated on a cumulative basis. If you used up your entitlement earlier in life, but were then made redundant further down the line, tough.
Eulogies in Britain’s right-wing press about how ‘effective’ these reforms were demand a heavy dose of salt. Poverty fell during the Clinton jobs boom but, as the economy slowed under Bush, poverty rose again from 8.7% in 2000 to 10.2% in 2004, with child poverty rising from 11 million to 12.5 million.
What really excites the Conservatives about Wisconsin? The clue is in the way they move effortlessly from talking about ‘getting people out of poverty’ to ‘getting people out of dependency’. What really offends them is the fact that people are claiming welfare at all.
The natural meaning of ‘dependency’ is when someone’s ability to shape their own life is undermined. But the Tories use it as a code-word to denigrate all welfare and public services. Taxation is bad, public spending is bad, and so those who use collective services are morally compromised. The appeal of the US is not its record on poverty, but its ability to bolster their minimal state ideology.
So we should worry when David Cameron talks about “five million unemployed” in the UK. This total number on out-of-work benefits includes single parents of young babies – implying Cameron thinks they should be out at work. Indeed, his beloved US welfare model requires the mother to work once the baby is just 13 weeks old.
When people say ‘Wisconsin works’, what they really mean is that welfare rolls were reduced. That has been a result of time-limiting benefits. But that also means there are now two million children in the US whose parents are out of work but receive no state welfare. Maybe charities will help them survive – or maybe they won’t.
We don’t need a British welfare debate in thrall to the Wisconsin model. The danger for the Labour government is that competing over who can talk most about ‘reform’ risks simply becoming an auction over who gets toughest on those claiming welfare. But that is an argument the Tories will always win.
Yet, if we want to reduce poverty and real dependency, we know what works: help to find work, skills training, flexible working and support for childcare.
This agenda needs deepening. A Fabian Society and Webb Memorial Trust project has just been launched which is seeking to do that. New policies are needed to help parents combine work with family responsibilities.
An ‘enabling state’ could unlock a triple whammy: more family income from work to help get children out of poverty; closing the gender pay gap by helping women pursue their work ambitions; and more time for parents to spend helping their children develop, while raising aspirations by example.
None of this is likely to excite the Tories as much as their plans to save implausible billions for tax cuts. But it would point to the alternative ‘reform’ agenda this government needs to embrace.
Tim Horton is research director of the Fabian Society. This week, the Fabian Society and Webb Memorial Trust launch a major project Fighting inequality and poverty in an age of affluence. See www.fabians.org.uk for more information
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