On 17th February 2010, the Coalition Government unveiled a bill that promised to bring about ‘the most radical shake-up of the welfare system for sixty years’. We’ve been here before. At least since Thatcher’s social security reforms of the mid-1980s, ‘the most radical reform of welfare since its inception’ has featured somewhere in the first year programme of most new governments. And since the 1990s, ‘making work pay’ has been the mantra of all parties, none more so than (New) Labour, which is one reason why that party’s response to the latest proposals has been so muted.
The story of ‘radical’ welfare reform is one of repeated disappointments. And one of the key reasons for this is captured in ‘This is the Road’, just possibly the savviest political cartoon of the twentieth century and itself now more than sixty years old. It’s worth taking a look at. I reproduced the cartoon in the preface to my book Beyond the Welfare State?. Anyone who understands this cartoon is at least half way to understanding the politics of the welfare state.
‘This is the Road’ is the work of David Low, best known for his scathing account of the rise of fascism and its appeasers. The cartoon dates from the opening weeks of 1950 but it’s brilliant and economical insight into the politics of the welfare state could have been published, to the same telling effect, at almost any time in the last sixty years. Sat in the driving seat, smiling confidently, with a trademark cigar and sporting the top hat and coat of Mr. Micawber, is Winston Churchill. The signpost at this particular cross-roads points to both ‘tax cuts’ and ‘the welfare state’. Somehow the democratic politician must reach both destinations though they seem to lie in quite opposite directions.
Sat on a gate in the background, dressed characteristically if improbably for the Turkish bath, is Low’s stock character Colonel Blimp and his longsuffering Low-like sidekick. The good colonel is offering advice to his friend with his usual confidence: “A difficult trick? Certainly not, sir! It’s just a matter of clever steering”. Throughout the post-war world, the challenge for governments in Britain (and beyond) has been to deliver tax cuts (or, at the very least, a rise in real disposable personal incomes) while also delivering a (just as popular) growth in the provision of public services. Bashing the unemployed can buy you a little political credit but running an economy with mass unemployment is expensive however mean you are. And sacking nurses and doctors is suicide politics.
Can the circle be squared? It can – if you can deliver enough economic growth. A growing economic pie can give you an increase in personal incomes and a growth in your tax take at the same time. And what does it take to deliver this magic recipe? Clever (economic) steering. Governments (and economic advisers) of all persuasions have tried to make this trick work. In the 1950s and 1960s, perhaps in the later 1980s and in the early 2000s, it looked comparatively easy. In the 1970s and maybe in the early 1990s, it looked pretty tricky. It certainly looks very difficult right now.
A government that manages to deliver both lower personal incomes and a depleted welfare state is headed for deep trouble. The Coalition may have a couple of years to get its own show back on the road. If that doesn’t work, we could be looking at a very spectacular car crash. It was the genius of David Low to have spotted this fully sixty years ago.