We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
To save content items to your account,
please confirm that you agree to abide by our usage policies.
If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account.
Find out more about saving content to .
To save content items to your Kindle, first ensure [email protected]
is added to your Approved Personal Document E-mail List under your Personal Document Settings
on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part
of your Kindle email address below.
Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations.
‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi.
‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
VAT is as VAT does. The way VAT is administered determines its effects. A full discussion of all aspects of VAT administration would require a separate book. All we can do in this and the next chapter is to highlight a few issues that experience suggests are important in developing and transitional countries. In Chapter 3 we asked whether every country needed a VAT. We almost – though not quite – answered yes to this question. It thus seems appropriate to begin the discussion of VAT administration by saying a few words about the way a country that previously has not had a VAT should launch one.
LAUNCHING VAT
Experts tell us that a preparatory period of between 18 and 24 months is necessary to set up a VAT (Tait 1988). Experience confirms that this advice is reasonable. Some countries that have tried to move to a VAT more quickly have paid a substantial price for their haste and have found it difficult subsequently to get it right. On the other hand, experience also suggests that too long a preparation period may sometimes be costly. Since the window of opportunity to introduce major tax changes may be open only for a short time, countries adopting a VAT must sometimes take what may be called the ‘big bang’ approach. VATs introduced too quickly have not always worked out well, of course, and that is why experts so often emphasize the desirability of following the normal schedule mentioned.
In recent years, two important new issues have been added to the list of problems facing VAT designers and administrators everywhere – the taxation of electronic commerce and the increasing interest in the possible use of VAT in some form at the subnational level of government. As we noted in Chapter 6 with respect to financial services, what most developing and transitional countries need to do is to get their VATs working properly before they begin to worry about the first of these problems. The second issue – subnational VAT – while of concern mainly to a few large countries (e.g., Brazil and India) is sufficiently important there to warrant close attention.
VAT AND THE DIGITAL ECONOMY
Governments, international organizations, and pundits have over the last few years poured forth reams of paper on how sales taxes should be applied to ‘digital’ sales (or ‘electronic commerce,’ hereafter ‘e-commerce’). The general line most OECD countries have taken on this issue is simple, reasonable, and persuasive: taxation should be neutral and equitable for all forms of commerce, electronic or otherwise, simultaneously minimizing both compliance and administrative costs and the potential for tax evasion and avoidance (Li 2003). But what does the growth of e-commerce imply for VAT in developing and transitional countries?
VAT is a partial solution
To begin with, simply adopting a VAT (compared to any other form of consumption tax) offers a partial solution to the problems posed by digital commerce.
Few fiscal topics are more important than the value-added tax (VAT). Over the last few decades, VAT has swept the world. With the notable exception of the United States most countries around the world now have a VAT. In many developing and transitional countries VAT is the most important single tax. But should every country have a VAT? Is the VAT in place in most countries as good as it should be in economic, equity, and administrative terms? Can it handle the fiscal tasks imposed by trade liberalization and other factors in recent years? Can it deal adequately with the novel issues arising from digital commerce and decentralization? Can it be administered sufficiently effectively by the already hard-pressed revenue administrations of developing and transitional countries?
The answers to such questions are critical not only to fiscal stability in developing and transitional countries but also to their growth and development. Are the VATs now in place in most of these countries the efficient, simple revenue-raisers they are often purported to be? Or are they so inequitable that they may exacerbate social tensions and hence undermine the political equilibrium reflected in a country's fiscal structure? Does VAT provide a feasible way to tap the informal sector? Or may it end up expanding the range of such activities? In this book we consider these and other critical questions about the design and performance of a tax that in recent years has become the mainstay of the revenue system in most developing and transitional countries around the world.
In Wasted lives, Bauman (2004a, p 7) argues that a consequence of late modernity is that “the problems of human waste and human waste disposal weigh ever more heavily on the liquid modern consumerist culture of individualisation”. This results in the absence of outlets for ‘safe disposal’ of surplus and redundant populations, including ‘unwanted’ immigrants, and specifically asylum seekers, who are not specifically ‘invited’ by national immigration policies. It also includes minority ethnic groups who do not sufficiently assimilate their cultural differences into harmlessness, or preferably out of existence, leaving intact the idealised homogeneous national culture. This problem of ‘human waste disposal’ fuels alarm about global over-population involving mass movements of people, playing a key part in the diffuse ‘security fears’ in emergent global strategies and, consequently, the logic of power struggles (Bauman, 2004a, p 7).
The main objective of this chapter is to share reflections and analysis prompted by these observations on diffuse security fears. In particular, we examine the contribution of social policy to the presence of harmonious intergroup relations in terms of both equality and diversity through consideration of the ‘family’ of related ethnic, equality, immigration and integration policies. Socially just citizenship at both the level of the individual and the cultural group is, we contend, a necessary condition for democratic sustainability and ‘perpetual peace’ (Kant, 1795). The chapter builds on the work of the Equality and Social Inclusion in Ireland Project, funded under Strand 2 of the Peace II/SEUPB North–South Programme, carried out in Belfast and Dublin Ireland over the period 2004-06 (see www.qub.ac.uk/sites/EqualitySocialInclusionInIreland-HomePage).
Arguably, one of the most significant legacies of the Enlightenment for modern social and political thought has been the Kantian belief that the universal community of human kind is “… the end or object of the highest moral endeavour” (Bull, 1977, p 27). This view is rooted in the belief that all human beings are fundamentally the same – or at least have the same moral standing in terms of the idea of the universal brotherhood of humanity. This view is shared by both the political right and the political left. It is not, however, without its dissenters (see, for example, Nussbaum, 2005, on recognition of other species).
In 2006 significant policy reforms were developed in the areas of child support, pensions, and more generally for recipients of out-of-work benefits. In each case the government set out agendas for reform that would have major long-term consequences, although with little happening immediately. To what extent, therefore, has New Labour been laying down new foundations for social security in the future? How far do the reforms imply a break with the past, and in what ways do they represent a continuation of key New Labour themes?
In this review we focus on the three main areas of reform, after setting out the relevant context. A later section more briefly discusses other policy developments taking place in 2006.
Background
Britain has long had a complex system of social security, with complex benefits (and tax credits) based on a range of different principles of eligibility (McKay and Rowlingson, 1998). Among its key features are a flat-rate system of contributory benefits, a high reliance on means-tested benefits to alleviate poverty (often set at levels exceeding contributory benefits), and universal benefits to meet some of the costs of children or disability. Over time, and particularly during the 1980s and 1990s, the emphasis on the contributory side of benefits was much reduced. These became a less important part of social security, which shifted towards income testing as the basis of eligibility.
Since Beveridge, social security has also tried to preserve people's incentives to provide for themselves. This has been particularly true for pensions. Voluntary private arrangements, through employer and personal pensions, have long been available for people to provide a higher level of retirement income. Where people are able to make their own provision, this is encouraged through generous tax breaks on the contributions made, and National Insurance rebates for those contracting out of the State Second Pension (previously the State Earnings Related Pension Scheme [SERPS]).
Policy since 1997
Academic discussion of social security under New Labour has tended to focus on their earlier years in office. The government's approach has been analysed as having strong degrees of both populism and pragmatism (Powell, 2000). It has also been notable for a strong emphasis on the role of paid work, and economic concerns more generally. A recent commentator described social security under New Labour as having become a “work-focused benefit regime” (Kemp, 2005, p 30).
As in previous years, this volume of Social Policy Review is organised into three sections. Part One reviews developments in key areas of social policy during 2006: education, health, housing, adult social care, children's services and social security. The introduction of a chapter on children's services for the first time this year reflects the substantial transformation that has taken place in recent years in the organisation of social services. The emphasis on partnership working has resulted in the reappearance of services organised around the characteristics of particular client groups, replacing the Seebohm vision in which local authority social services departments were responsible for providing a service that offered support to all vulnerable groups.
The chapters in Part Two are by authors who presented papers at the annual international conference of the Social Policy Association held at Birmingham University in July 2006. Because the conference produced a large number of papers on a wide range of topics, the selection criteria for the chapters in Part Two were not simply to fit them to some synthetically derived theme, but reflect an attempt to represent this breadth. The selection has been made primarily on the basis of the interest and topicality of the material presented, while equally demonstrating the vitality of the discipline of social policy. The chapters have in common a focus on the less often discussed and ‘difficult to research’ challenges encountered within empirical research.
The theme for the chapters in Part Three is migration and social policy. This is an issue that has provoked substantial debate and is high on the political agenda both nationally and internationally. The chapters in this section connect with, and expand on, key contemporary policy debates in the field of migration – recent enlargement of the European Union and the scale and impact of migration from new member states, in particular Eastern Europe; the challenges brought about by the migration of older people not only in terms of their ability to access adequate and appropriate welfare services, but also to the existing systems of welfare provision and the principles on which they were built; and finally migration processes as the management of complex and multiple life courses with a particular focus on children.
Part One: Current services
A number of common themes emerge from these reviews of developments in key social policy areas in 2006.
In the past decade, immigration and net migration into the UK have increased substantially. At the same time it has become more diversified, not only in terms of countries of origin but also the different forms of entry, statuses and rights conferred by the state. There are also large variations in the proportion of female nationals among the many nationalities present in the UK, with an average of 48.6% in 2006 (Salt, 2006), rising to over 60% for the Philippines and a number of European states, but falling to below 40% for those from Bangladesh and Iran. In the most recent flows, the largest nationalities, such as Polish, Indian, Lithuanian and Slovakian, currently dominating labour migration, have relatively low proportions of women.
Although women are present in all flows, each form of entry reveals very different proportions of females. Asylum seekers are the least feminised group of entrants (30% of principal applicants and 53% of dependants in 2004) in contrast to family migration, which is around two thirds female. The third major route is labour migration where the proportion of females varies considerably by nationality and sector of employment. However, the UK's global position and relatively open labour markets, due in part to its colonial links, have meant that, unlike many other European states, female migrants are to be found across a range of employment sectors and sites, both skilled and less skilled (Kofman et al, 2005).
Immigration policies contribute to shaping the gendered nature of these flows. The intersection of gender with other social divisions such as nationality, education, and economic, social and cultural resources in conjunction with immigration policies also create a complex matrix of stratification. The gendered outcomes and stratified rights and access to settlement and citizenship are not necessarily overtly enunciated but result from the ways in which the criteria relating to different forms of immigration are applied. So too do gendered representations of particular forms of migration impact on the development of policies. Asylum seekers are largely seen as young mobile men while family migrants are primarily women, less interested in joining the workforce than men (Kofman, 2004).
There has, however, been no comprehensive study of how policies influence the arrival and settlement of women migrants even though (often outmoded) gendered assumptions underlie policy.
In the UK, as in many other European Union (EU) member states, discussions about the merits of EU enlargement have been dominated by concerns about the scale and impacts of migration from new member states to older ones. Relatively little is said about the economic and political advantages that EU enlargement can bring to existing and new member states. In contrast, public debates on enlargement seem to be dominated, almost fixated, by fears about immigrants from new member states and the impacts they will have on UK labour markets, public services, welfare provision and crime.
In the lead up to the accession of 10 new member states on 1 May 2004, the UK government came under public pressure to limit the right of free movement for workers to protect the UK. In the event, the government resisted these pressures and was one of three existing member states that did not impose restrictions. Two years later, faced with similar pressures to restrict the access of Romanian and Bulgarian workers when their countries joined the EU, the UK government changed its stance and decided to introduce restrictions.
This chapter examines the context in which these two different policy decisions were taken as a way of drawing out some of the complexities and contradictions of migration policy making in the UK. It begins by looking at the environment in which the 2004 decision was made and then reviews the empirical evidence on the scale and impacts of migration from the new member states. It then asks why, in the face of the apparent benefits of a liberal approach, policy makers changed their minds on Romanian and Bulgarian workers. The chapter concludes by considering some of the broader political challenges around migration.
May Day panic
Under the treaties governing the accession of the 10 new member states joining the EU in 2004, existing member states had the option of restricting the access of workers from new member states to their labour markets. This ‘transitional’ period of up to seven years was meant to ease any potential problems associated with the movement of large numbers of people from poorer new members to richer existing members. In December 2002, the UK government announced its intention to allow workers of the eight Central and Eastern European accession states (A8) unrestricted access to its labour market as soon as they joined the EU.
This chapter examines the rapidly unfolding story of children's services reform in the UK in 2006. Those working in children's services are responding to multiple drivers of change inhabiting a fast-moving policy landscape. Major reorganisation is under way in response to the 2004 Children Act, which implemented the structural reforms put forward in the Every Child Matters Green Paper (DfES, 2003). The 2004 Children Act seeks comprehensive reform across the range of services for children aged 0-19 years and their families and has been described as constituting “the most radical transformation [of children's services] since the 1948 Children Act” (Hudson, 2006, p 86). The timing of such radical reform has been explained as the cumulative effect of huge concern over child protection failures (Laming, 2003), and ongoing policy agendas aiming to ‘modernise’ public services and reduce social exclusion (Parton, 2006). With imminent implementation targets and several new policy announcements in 2006, this chapter sets out to examine reform in two stages. First, the main tenets of the evolving national policy framework are summarised. Second, there is a discussion highlighting five key implementation concerns – competing policy agendas, realising the outcome-led approach, accountability gaps, joining up services and developing partnership working and resources and capabilities for implementation and development.
Children's services reform 2004-06: national policy framework
The Every Child Matters Green Paper sought to reduce the risk of child protection failures, by re-orientating children's services towards improving children's “lives as a whole”, their “outcomes”, “well-being” and “life chances”, “maximising the opportunities open to them” (DfES, 2003, pp 6-7). The Green Paper defines children's well-being in terms of five objectives that are to guide service review and reform: enhancing children's health, safety, contribution to society, enjoyment and achievements, and economic well-being (DfES, 2003, p 14). To advance these outcomes for children, several proposals were put forward envisaging more integrated, accessible and responsive services focused on prevention and supported by enhanced accountability, organisational reform, joined-up working and workforce development.
Integrated, preventative and responsive services
Every Child Matters proposed a comprehensive review of children's services, placing “children's needs at the heart” of provision (DfES, 2003, p 9). The Laming Report (2003) attributed the failure to protect Victoria Climbié from harm as a consequence of fragmentation between the ‘hard end’ of crisis intervention and the ‘soft end’ of general universal services for all, as well as a lack of clarity about professional responsibilities.
Sixty years on from the end of the Second World War and the establishment of the post-war welfare state, more than 25 years on from the election of Margaret Thatcher's government and changes that reduced the size and role of public sector housing, and almost 10 years on from the election of a new Labour government, housing policy in Britain has home ownership at its heart. At the same time asset ownership is a more central element in the government's whole approach to public policy. Policy actions taken in 2006 confirm this direction and the importance of housing in the new asset-based welfare state.
Contrasting origins
Housing has been represented as the wobbly pillar under the post-war welfare state in Britain (see, for example, Malpass, 2003, 2005). During and after the Second World War the legislation and reorganisations that transformed the political and social rights of citizens and established the modern welfare state had less overt impact on housing policy than almost any other area. Although squalor was identified in the Beveridge report (Beveridge, 1942) as one of the main targets for the new welfare settlement, and although housing and housing costs were inextricably linked to problems of ill health and poverty, there was no dramatic reorganisation of the way that housing was provided or managed. There was no nationalisation of the housing service comparable with changes in health service provision and the state did not emerge as a monopoly or near monopoly provider of services comparable with health or education. While the changes were not so dramatic and local authorities continued to be the lead agencies for the government's direct provision of housing, the role of government in housing provision was, however, considerably increased. New towns and a new land use planning system combined with more generous subsidies for local authority housing meant that the state built new high quality housing that was superior to most of what was available in the private sector. At the same time rent control brought the bulk of the market within a managed system. Although it had not been so obviously reorganised, the private as well as the public sector operated in a very different way than in the past.
Any account of education policy in 2006 has to be dominated by the content and process of the 2006 Education and Inspections Act. Within the Act almost all of the key themes of the New Labour public sector reform project are played out in and through education policy, building on, extending and reworking previous policies and previous legislation. The Act was also a significant moment in the history of Tony Blair.
In the run-up to the 1997 General Election Tony Blair (1996) announced ‘education, education, education’ as his key priority. In 2006 education policy may have played a not insignificant role in bringing his leadership of the Labour Party to an ignominious end. The Prime Minister has made an enormous personal investment in education policy and he himself has made many key policy announcements rather than the Secretary of State1. Education is a recurring theme in his speeches and press conferences, he makes many visits to schools and personally praises and rewards ‘excellent’ teachers. The 2005 White Paper (DfES, 2005a), the 2006 Act and the compromises that became necessary to achieve Party support were clearly identified with this commitment and his credibility. Blair also often speaks about education from the point of view of a parent.
In their review of English education policy in 2005 (and again here the focus is very directly on England) Dyson and colleagues (2006), borrowing a phrase from Tony Blair (2005a), posed the question as to whether that year marked a ‘pivotal moment’ in the New Labour programme of ‘fundamental and irreversible’ educational reforms. They went on to conclude, while acknowledging the significance of what had been ‘achieved’, that 2005 was pivotal in a different sense and that the fragility of and tensions within New Labour education policy were becoming ever more apparent. These tensions and fragilities are again very much in evidence in education policy in 2006 and serve to highlight both the extent and the limits of New Labour's reform agenda. Nonetheless, the longer-term significance of the 2006 Act, especially the provisions relating to trust schools, should not be under-estimated.
More broadly the Act exemplifies both New Labour's overall project of education reform (and public service reform generally) and concomitant changes in educational governance (and New Labour's governance strategies generally). It is also possible to see in the Act facets of New Labour's agenda around citizen behaviour and responsibility.
The implementation in 1993 of the 1990 National Health Service (NHS) and Community Care Act was one of the most fundamental upheavals social services in the UK had ever experienced, introducing splits between the purchasing and direct provision of care services for adults, and implementing a ‘quasi-market’ in social care (Le Grand and Bartlett, 1993; Lewis and Glennerster, 1996). These reforms aimed to control public expenditure, facilitate joint working between health and social care and empower service users. This legacy remains a powerful driver in social services: policies designed and implemented by the New Labour government since 1997 have never strayed too far from these themes. Within the policy discourse of ‘modernisation’ efforts have been concentrated on addressing problems associated with the implementation of the legacy of the 1990s changes, rather than changing the vision or the discourse of the policy itself (Newman, 2001).
Adult social care services have always struggled with the sometimes conflicting aims of community care policy. Analyses of the implementation of the 1990 changes have shown how frontline workers have become compelled to prioritise the overarching aim of controlling expenditure, acting as gatekeepers and rationers, rather than facilitating user empowerment (Lewis and Glennerster, 1996; Rummery, 2002a). Development of the mixed market in care has resulted in an increase in the proportion of services being delivered by the independent sector, without any evidence that this has necessarily increased choice and control for service users (Hardy et al, 1999; Tanner, 2003; Clarke 2006). In some respects the gatekeeping and mixed market elements of community care policy started in the 1990s have continued unabated under New Labour, albeit under the discourse of modernisation rather than the discourse of new managerialism (Newman, 2001).
Where New Labour has differed significantly from the previous Conservative administration is in the emphasis given to joint, or partnership, working with health. This has moved from a marginal activity to the mainstream of business for both organisations, with the removal of structural barriers to integration at various levels with the 1999 Health Act, to various organisational changes, performance objectives and cross-cutting policy initiatives since. Adult social care organisations have, sometimes with good reason, been wary of increasing pressure to work in partnership with health.