When I looked back at my submission, I was a bit worried because it mostly takes the helicopter view.
I find the term “welfare” unhelpful because of its pejorative nature, particularly in the USA, and because it is confusing. Every one of us benefits hugely from the welfare state, which includes all manner of different, often universal, services such as education, health services, child benefits, having our streets cleaned and public planning. All those services are part of the welfare state. Social security is also part of the welfare state and I am interested in seeing how we can improve people’s social security. I sometimes feel as though I am in a minority of one because everyone talks about welfare but we should be aspiring to underpin people’s lives with some social security when they need it.
In order to do that, we need to look at the trade-offs between, for example, taxes and benefits. Members will be aware from the submissions that, when there is a recession, we can respond in two ways. We can bring in more money or cut benefits and services. Alternatively, we can do a mixture of the two, which is more common, and the balance between them determines who gains and who loses. In the UK, we have seen men gaining and women losing, because men gain more from gifts through the taxation system while women lose because of the cuts in benefits and do not get so much from the tax gains. Other people can say much more about that, but that is the principle.
The other problem in the system, which has been tinkered with for 60 years, is that there are two areas that I can think of where benefits are part of the problem. Perhaps more in the UK but also in Scotland, we have used housing benefit as our response to unaffordable housing. Unfortunately, for too many people in ordinary jobs, housing is unaffordable. As one of the witnesses in the previous evidence session said, we need to look at the housing supply and whether the cost of housing can be addressed. Either we must do that or there must be an economic strategy that does not create jobs that pay the minimum wage. In effect, a high-wage economy is needed.
One of those problems must be dealt with—but not through the benefits system—to make housing affordable for ordinary people. It is not sustainable for housing not to be affordable for ordinary working people. Paying benefits will potentially stoke the flames of that. I am not for a second suggesting that the benefits should be stopped; rather, I am suggesting that we work towards a different balance in the system in relation to support for the supply and demand.
There are similar issues in childcare. It may be that support for the supply side such as is provided in Sweden, for example, would be more beneficial in the long run.
All those areas—tax, other social services, childcare, training and minimum wage protection—must be part of the context in which social security decisions are made.