Does Labour dare to renew the welfare state?

“The nation wants food, work and homes. It wants more than that – it wants good food in plenty, useful work for all, and comfortable, labour-saving homes that take full advantage of the resources of modern science and productive industry. It wants a high and rising standard of living, security for all against a rainy day, an educational system that will give every boy and girl a chance to develop the best that is in them.”

These were the aims set out in the 1945 Labour manifesto. Labour won that election with a landslide, in large part due to its strong, clear commitment to founding a welfare state after the second world war.

That government went on to implement the most comprehensive set of social security policies in UK history. Based on the recommendations made in the Beveridge report, these policies still form the basis of the welfare system in the UK today.

Those aims outlined in Labour’s 1945 manifesto would not sound out of place now. In fact they would sound just as, if not more, radical now nearly 80 years later. The present-day Labour party won control of the government in the recent election, but received only 34% of the vote – hardly a thumping electoral mandate. And their commitment to a welfare state is significantly paler than that of their predecessors.

Keir Starmer’s government is promising to provide more affordable and social housing, make the minimum wage a living wage, and reduce energy bills. But if Starmer truly wants to “fix the foundations”, as he so often says, we need to let go of austerity politics and aim for nothing less than genuine social security for all – just as Labour envisioned in 1945.

So how do we turn that end goal into a workable plan?

How can we meet people’s basic needs?

If our aim is to build a system that meets everyone’s basic needs, we first need a clear understanding of what is meant by basic.

One helpful reference point is Abraham Maslow’s hierarchy of needs. At its base are our physiological needs. To stay alive and healthy, we need good medical care, clean air and water, warm clothing, and nourishing food. To be safe we need shelter, protection from violence, and stability.

Above our physiological needs are our social and psychological needs. Humans need love and belonging to participate as active members of our communities. They need respect and self-esteem. At the top of the pyramid are empowerment and self-actualisation, which we need to reach our full potential.

These are all complex processes that operate in transaction with the world around us, and through our relationships with others and ourselves. They cannot be provided to us, they must be acquired with us. They require us to have freedom and the means to try and fail.

It is inefficient, ineffective and unethical to leave each individual to fight for basic resources alone

Translating these conceptual needs into basic resource provision is best done in dialogue with the public, so that the end result reflects what different communities view as ‘essential’, ‘basic’ and ‘fair’. To make matters even more complicated, what surfaces as ‘basic’ is not only context and community dependent, but also changes over time.

This is why, when it comes to social welfare systems, genuine participatory democracy and adaptive policies are so important. Items once rarely used or not yet invented become necessities, like phones, computers and the internet. In many places, being without those items leaves individuals at a severe disadvantage. Policy must adapt to deal with that and this can only happen when people are able to speak up about their unmet needs, and be heard.

Services or cash?

A functioning social security system is one that rises to this challenge of meeting people’s basic needs by default, once they have been defined. It needs both a comprehensive set of public services and cash payments. There are very few serious objections to this amongst experts and researchers, but there are serious questions posed about the balance between the two.

What’s most efficient? What will give the biggest pay-off with the least investment? How do we truly reach the goal of universally providing the basics?

To meet people’s physiological and safety needs we should turn to building public services. The scope of these services is well covered by the elements that usually comprise a universal basic services proposal: healthcare, education, legal services, shelter, food, transport and internet.

It is inefficient, ineffective and unethical to leave each individual to fight for these resources alone. Public investment funded by taxation is by far the most efficient way to maintain infrastructure like roads or railways. And we have a strong template for how we can build out national infrastructure in the NHS.

To ask those whose most basic needs are unmet to hold out until we have built the infrastructure would be arrogant and cruel

The UK’s health service is free at the point of use. It is also constantly innovating and iterating to ensure it offers services at the highest standards available. The recent history of the NHS certainly shows how challenging it can be to maintain nationwide infrastructure as the political winds change. But its basic ethos and mode of operating is a good starting point for designing systems to deliver other material needs.

Strong public infrastructure, as described by a universal basic services model, would go a long way towards providing people with freedom, time and cost-effective living. Getting that right would greatly lower the amount of income people would need to achieve a minimum standard of dignified living.

Cash benefits, meanwhile, should articulate with this service provision to guarantee a dignified life and at least partially balance inequalities of circumstance. Earned wages on top of this provision should be sufficient for some luxuries and long-term investments.

Both services and cash payments would need continuous fine-tuning over time. But balanced correctly they would accomplish what the 1945 Labour manifesto hoped to achieve.

We can’t wait for perfect

While a combination of basic income and basic services would be the perfect way to meet many of our core needs, it would require decades of work to roll them out to an adequate standard – even if there was the commitment to begin that process today.

We are starting from a reality where social security infrastructure is a long way from meeting people’s needs. To ask those whose most basic needs are unmet to hold out until we have built the infrastructure would be arrogant and cruel.

In 2020, the Lancet, a leading medical journal, reported that the introduction of Universal Credit led to an increase in psychological distress among service users. Reports from the Department of Work and Pensions have shown that benefit levels are too low to cover the cost of essentials. Policy in Practice’s report ‘Missing Out’ showed £19 billion of support goes unclaimed each year, with reasons including administrative complexity, fragmentation of support, and stigma.

A shift to a more adequate and less conditional set of cash transfers is an interim solution that can be implemented relatively swiftly. This involves pitching benefits to the realities of the cost of living to eradicate poverty. Removing conditions from welfare payments would create a system that supports rather than traumatises people when they need it. Building in a universal basic income payment creates a more efficient system that everyone is enrolled in and an income floor that no one can fall beneath.

We need participatory democracy to build services that can truly be considered universal. So we must provide people with the financial security and time required to express when their needs are unmet, as well as creating systems to receive and act on this information.

These actions in the short term would address the current, catastrophic failings of our social security system in parallel with the first stages of rolling out improvements to public services.

True social security for all requires a comprehensive set of public services and a guaranteed income that in combination are sufficient to meet our basic needs. It’s always been possible to come up with a workable plan. What’s been lacking to this point is a sufficient, sustained political commitment to creating universal social security.

Our responsibility now is to hold the new Labour government to account to this commitment. Prioritising the unmet needs of the most let down in the short term and delivering true social security in the long term.

Explore the rest of the series

This series looks at the specific challenges that campaigners face when arguing for universal basic income in highly individualised and neoliberal contexts like the United States and the United Kingdom, and how they work to overcome them.