Good times, bad times: the welfare myth of them and us

Good Times, Bad Times challenges popular misconceptions about the welfare state in the United Kingdom. The book deconstructs the view that ‘welfare’ is exclusively about out-of-work benefits and that those who are in receipt of such benefits are somehow ‘other’ to the rest of ‘working Britain’ (a term favoured by our current political leaders). Hills challenges these misconceptions with detailed evidence demonstrating that in fact we all benefit from the welfare state over the life-course, getting back what we put into the system. The welfare system in the United Kingdom covers universal entitlements such as education, health care, pension provision, and child benefit (except for the very wealthy), and as such it is something that all of us make use of at varying points in our lives: when we have children; when we become unwell; when we need healthcare; and when we grow old.

Hills explains that whilst the welfare system is redistributive (poorer households do get more out of the system and richer households put more in), the system is also redistributive for individuals over the span of their own lives – so effectively he argues that we are all paying for own services and benefits in a kind of ‘savings bank’ (67). This is the case for all families, with even the poorest 10th of the population paying in half of what they take out. The rich contribute more because of the principles that the system was founded on: that benefits and services should go to people according to their need (as opposed to whether they can pay for it); and that the taxes we pay should be in proportion to our incomes.

Hills uses vignettes at the start of each chapter about two fictional families (the working-class Ackroyds and the middle-class Osbornes) to illustrate how the welfare state affects each family at different time points and over the course of their lives, what they give out in taxes and what they take in benefits. If you take a snapshot of the two families’ lives, for instance, the Osbornes are shown to make a net contribution to the state of around £16,000, whereas the Ackroyds have a net take-out of around the same amount. Although it looks as though there is a transfer of £16,000 from the more to the less affluent family, when you look at the situation over the families’ lifetimes, what you find is that they both end up getting around the same from the welfare state.

Hills demonstrates just how social policy can help and hinder people’s security over their lives. For instance, he discusses how social policy is driven by ‘smoothing out’ variations in incomes over the lifecycle, arguing that ‘the dominant effect of social spending in the UK is to redistribute income across people’s own life cycles’ (52; original emphasis). People pay through taxes what they may need at other points in their lives. So, for instance, under the New Labour administration between 1996/97 and 2010/11 there was a clear policy effort to reduce both child poverty and poverty in old age. New Labour increased benefits for older people, and put in place an increase in benefits and tax credits for families with children. Other working-age benefits fell. Consequently, poverty rates for older people, children and their parents fell, whilst poverty rates for working-age adults without children rose (56–57).

Since 2010, the Coalition Government have continued to protect most of the benefits for older people (such as with the state pension and protection of the Winter Fuel Payment), but have reduced benefits and services for other groups. Children have been heavily affected, with reductions in child benefit and tax credits for parents, the abolition of the Education Maintenance Allowance, and cuts to council budgets for Early Years and Youth Services. Working-age adults have been similarly hard hit, including for instance the targeting of disability and ill-health-related benefits, and changes to housing benefits and council tax benefits. The largest downward effects, Hill argues, have been on low and middle-income people of working age, and of low-income children. So unsurprisingly we have seen child poverty rates on the increase: 300,000 children in the United Kingdom have fallen below the poverty line since 2012 (Butler 2015).

In Chapter 4 Hills explores how incomes can fluctuate over a yearly period, and the consequences in terms of benefits and tax credits. Whilst some people have jobs with pretty flat incomes, receiving roughly the same each month, many others in insecure, low-income jobs can have widely fluctuating incomes. He discusses the ‘low pay no pay’ cycle and also the rise of zero-hours contracts, arguing that the current benefits and tax credits system is unable to adequately cope with these fluctuating incomes. Hills puts forward some justified reservations about the proposed Universal Credit system (which is planned to replace a range of the current means-tested benefits).

Further chapters explore changes in people’s circumstances over the medium term and the long term, and the transfer of wealth and privilege between generations, and towards the end of the book Hills discusses the impact of the economic crisis and the resulting austerity policies of the Coalition Government. He argues that the changes effected have been regressive (hitting the poorest harder). General cuts in the welfare state disproportionately impact people on low incomes, whereas tax rises impact on people in proportion to their income. As such, the decision to tackle the deficit reduction with 80% coming from spending cuts has been a deeply regressive measure.

I found Good Times, Bad Times to be an interesting book that provides a coherent argument as to why the welfare state is important and why we should seek to protect it. It is a sad indictment of current thinking, however, that the book justifies this ultimately with the argument that we personally will lose out with the erosion of the welfare state (as opposed to the argument that the state should look after everybody in our society, regardless of what they are able to contribute in taxes). Following the recent May 2015 election, it is a deeply worrying thought as to how the Conservative Government’s policy measures will further shape the social landscape in the United Kingdom. If the record of the past five years is anything to go by, then we are in for some troubling times.

Kate Mattheys
Department of Geography, Durham University, Durham, UK
[email protected]
© 2015, Kate Mattheys
http://dx.doi.org/10.1080/09687599.2015.1062223