ONCE upon a time, we had to read the old classics to hear about the two kinds of people in need – the labouring poor and the undeserving poor. Dickensian scenes of the hard-working Bob Cratchit, abused by his employer Scrooge, contrasted with the feckless, drunken Bill Sykes.
But is it too far fetched to say we’re heading back in this direction? Attitudes have hardened, with sympathy for those on benefits dwindling. And not surprisingly, George Osborne has capitalised on this shift and grasped it firmly to his austerity chest – slashing housing, unemployment and disability benefits. In the Autumn Statement, he pegged the increase in benefits to just 1 per cent each year for the next three years, despite expectations that real wages for those in work, and inflation, will increase by more. As the economist Jonathan Portes shows, many benefits have been falling relative to average earnings for more than 30 years, despite a slight recent upturn as private sector wages stagnated. But that’s not what the public think.
Such a world makes politics difficult, especially for Labour. It feels uncomfortable with the idea that those on low incomes should bear so much of the strain of the current fiscal squeeze. After all, the banking debacle that led to the need for austerity had little to do with them.
Ed Miliband rightly feels he is on firm ground when he questions the cutting of benefits for those in work – the strivers and the squeezed middle. But even Labour is unsure of its touch on benefits for those out of work. Osborne’s characterisation of them as lying in bed may be misleading. But to be found on the wrong side of the vicious atmosphere on scroungers is a dangerous place to be if you want to win elections.
In such a world, the question may soon be asked, if the state under either party is not willing to care for them, who will look after the “undeserving” poor?
Perhaps this will be the future role for charity and philanthropists. For many decades, this sector felt it added value to a fairly comprehensive welfare state by filling in some gaps, funding innovation and supporting new causes. Maybe in the future, however, we will need to look to the modern equivalents of Joseph Rowntree and George Peabody to actually provide any services at all for those at the bottom of the pile.
Already many “unpopular” causes only survive by getting help from charitable organisations and sources – support for prisoners, asylum seekers, and those with severe mental health problems. Since we will always have those who cannot get by in modern society, perhaps it will fall to real charity and faith-based groups to once again support them.
Some may think this a desirable state of affairs – ending forever the moral hazard associated with the welfare system. But many of us, sitting in our warm homes with the turkey roasting, will feel that while Dickensian is a nice atmospheric phrase, it is not one we expected to see lived out again in our lifetime.
Dan Corry is chief executive of New Philanthropy Capital and a former adviser to Gordon Brown.