The origins of Universal Credit

By Bernadette Meaden
October 15, 2018

As Universal Credit (finally) approaches the top of the political agenda, now seems a good time to reflect on how it was devised.

Iain Duncan Smith’s think tank, the Centre for Social Justice, assembled a working group to find solutions to poverty in Britain. The name the group was given is pretty revealing - the ‘Economic Dependency Working Group’. Compare this with, say, the Commission on Economic Justice, and we get an idea of where it was coming from. In 2009 this group produced the document ‘Dynamic Benefits’, which contained the genesis of Universal Credit. 

It is interesting to consider the composition of this working group, which devised a new benefit system for millions of Britons on a very low income.

The Chairman of the group was a partner and former head of the London office of Oliver Wyman, the international management consulting firm. Of the 16 other members, almost all had a background in Conservative politics, conservative think tanks, business, or finance. Of the 17, three were women.

Of course, nobody’s ideas and understanding are necessarily limited by their background – they can have empathy and learn from others with lived experience. But on the evidence of the policies which emerged, this group’s understanding of life on a low income remained extremely limited. So many of the design features now causing such havoc are clearly a result of this gulf between the experience of Universal Credit's designers and the lives of the people who would need to claim it. 

If we read the preface to Dynamic Benefits, written by Iain Duncan Smith himself, it’s clear they were probably also operating within a pretty tight remit and rather narrow parameters. The preface, titled ‘Breaking the Dependency Spiral’ is worth quoting at length. The desire to change people, change their lifestyles and behaviour is clearly the driving force. I have highlighted a few words and phrases.

“The Centre for Social Justice (CSJ) was established to find and promote solutions to deep-rooted poverty in Britain. As leader of the Conservative Party I frequently encountered significant social breakdown and dysfunctionality across the country. I met people trapped by dependency and left behind by society. This emerging underclass lives in communities consistently defined by five characteristics, which become the pathways to poverty: family breakdown; educational failure; drug and alcohol addiction; severe personal indebtedness; and economic dependency – caused by intergenerational worklessness. The CSJ has published more than 350 policy solutions to reverse this breakdown – breakdown which costs society more than £100 billion a year – and move people out of poverty. At the heart of these solutions is recognition that the nature of the life you lead and the choices you make have a significant bearing on whether you live in poverty. Policy-makers regularly fail to understand this, instead viewing poverty through a financial lens only.”

Now I don’t read Tatler or Hello, but I imagine you could find many wealthy families who have experienced at least one of those ‘pathways to poverty’ yet remain wealthy. Independent researchers have been unable to find evidence of intergenerational worklessness, although I believe it isn't unheard of amongst the aristocracy. As the previous Duke of Westminster said when asked what people should do to get rich, “Make sure they have an ancestor who was a very close friend of William the Conqueror.” Given that piece of luck, even if you took every one of those ‘pathways to poverty’, you’d be unlikely to find yourself choosing between heating and eating.

The sheer, dangerous wrong-headedness of Iain Duncan Smith’s analysis and approach is difficult to convey, but is becoming ever more manifest in the homelessness, foodbank use and mental health problems the resulting welfare reform policies have produced.  For Duncan Smith, it’s the choices you make that have a significant bearing on whether you live in poverty – the record number of working families living in poverty have simply chosen the wrong jobs, clearly. And meanwhile, the poorest families get poorer as a result of tax and benefit changes.  Very little personal choice involved there, unless we include the way people voted.

We can see how Iain Duncan Smith’s back-to-front way of seeing things developed from his famous ‘Easterhouse epiphany’ in 2002. Easterhouse, a Glasgow council estate, was a classic example of how a community can fall victim to economic forces and decisions over which they have no control. The estate was built in 1954 to house people displaced by Glasgow’s slum clearances. It was badly built and badly located, with poor transport links and for many years no police station, schools or shopping centre. Residents were then hit by the collapse of major industries like shipbuilding which provided decent employment, and not surprisingly, things went downhill.

Yet Iain Duncan Smith concluded that people in places like Easterhouse were poor because of the social problems associated with poverty and deprivation – symptoms were seen as causes. They were poor because they had made bad choices - not because they had been failed in multiple ways by successive governments. For him, what needed fixing was not structural  - what needed fixing was lifestyles, people's choices.

This fatally flawed way of thinking, which seems to imply that people or even whole communities can simply go wrong, fall into ‘worklessness’, fecklessness or 'welfare dependency' independent of any outside economic forces, pervades welfare reform. And so, years later, we have Universal Credit, designed to change the behaviour of the working and non-working poor via sanctions, to teach people on very low incomes, already watching every penny, to budget.

In closing, all those ‘pathways to poverty’ can and should be challenged robustly, but let’s tackle just one for now – educational failure. If all the workers Iain Duncan Smith might consider ‘educational failures’ suddenly stopped working, this country would grind to a halt. So if educational failure is their pathway to poverty, that is one of the many injustices in our economy, not the just deserts of those people.


© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden


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