EXPERT COMMENT: Gordon Brown wants £3 billion for the ‘austerity generation’. But the UK needs a more enduring solution

In this article originally written for The Conversation*, from Northumbria University, Elliott Johnson, Senior Research Fellow in Public Policy, Daniel Nettle, Professor of Community Wellbeing, and Matthew T. Johnson, Professor of Public Policy, discuss the interventions required to tackle poverty and inequality in the UK.

Former prime minister Gordon Brown has called for a rescue plan for some of the UK’s most vulnerable young people. There are, he said, 3.4 million children born after 2010 who are in poverty and whose development has been affected by the austerity policies of Conservative-led governments.

The interventions he recommends include an expanded Sure Start programme in partnership with foundations and corporate investors, support for unemployed and low-paid people to find higher-paid jobs and an extension to the government’s household support fund that is set to end in October.

It’s true there is a cohort of young people who haven’t had the forms of support that existed before austerity. It is also true that they need government support to avoid falling into, or being unable to escape, serious social issues like poverty and ill health. There is an intuitive case to be made for early years interventions like Sure Start, more effective employment support and emergency funding for people facing destitution.

But the lesson we should take from the austerity years is that these kinds of piecemeal, ad hoc measures are extremely vulnerable when the government inevitably changes and any progress is, consequently, easily reversed. This is because targeted spending to help a relatively small proportion of the population often breeds resentment. Our research shows it can even result in the beneficiaries being framed as an undeserving out-group by hostile politicians and media.

Having criteria for financial support makes systems difficult to administer and creates disincentives for economic, social and health-promoting activity. After all, there are good reasons to stay sick when getting well may mean being forced into harmful, poorly paid and insecure work. And means testing ignores those who are under intense financial strain but don’t fall into outdated definitions of poverty. It also requires extensive bureaucracy to classify claimants.

As repeated attempts to overhaul sickness and disability benefits show, having stricter criteria does not reduce the number of claimants.

Our research has found that it’s far better to have a broader approach that provides security to the whole population through policies that the government can’t afford, politically, to take away. The safety net needs to be there when people fall, not when they’re trying to get up again.

Basic income, in which every permanent resident is regularly provided with cash even if they are in work, can achieve this. It is both affordable and politically feasible. We have even shown that schemes with lower payment levels are more effective at alleviating poverty than the policies pursued by Gordon Brown during the New Labour governments and the measures he is calling for now.

Stress and poor mental health

Crucially, aside from reducing the stigma and exclusion caused by targeted payments, universal systems provide a secure and predictable income in ways that are almost as important to people’s wellbeing as the amount of financial support.

It is this lack of predictability and security that has been so damaging to young people (and indeed a large number of people under 55). Put simply, financial insecurity has brought about rapidly rising rates of stress and associated health conditions among those too young to access pensions and age-related benefits to help with things like housing and energy bills.

Financial insecurity was already rising before austerity measures were introduced. One of the architects of the last Labour governments, Liam Byrne, has declared New Labour economics “history”, denouncing its contribution to wealth inequality in Britain.

It is not just a small group of young people who should be targeted with a £3 billion investment. Everyone in the UK has been the victim of an increasingly dysfunctional economic model. It is a mistake to believe that its effects are restricted to those born after 2010.

In the UK, the social security necessary for people to take risks and build the enterprises, activities and services we need is a distant memory for adults. Young people respond with incredulity to things like the education maintenance allowance that Britons used to enjoy. 

As such, a £3 billion investment will make little difference. It might seem like a small budget is less likely to arouse public opposition. But because it’s so little and because it is inadequate, it is necessarily reversible and likely to be cut. It’s just not enough to make a big impact. It is also targeted at young people in poverty, a group likely to be lower on the agenda for some older voters, whose interests often appear to be the central focus of the main political parties.

Policies like universally available early-years support and nursery and pre-school access, combined with basic income, are common sense and pragmatic. Our modelling suggests that only a broad programme of investment that reaches everyone in the country can produce the economic transformation the UK needs. It is common sense to strive for a long-term plan that gives adults the social security to care for and provide opportunities for “austerity’s children” and for those younger people to realise the potential they clearly possess.

If the UK wants a bright future, it has to to act now.

*This article was originally published by The Conversation. Please see here for republishing guidelines.