Universal Credit transforms the way the state interacts with workers on a low income. Alongside more stringent requirements for out-of-work claimants to engage in job-seeking activity, it may – controversially – involve the introduction of “in-work conditionality” to claimants on a low income, placing responsibilities on individual workers to increase their earnings.

The traditional distinctions drawn by policymakers between strivers and skivers, workers or shirkers, are now blurred as both unemployed people and low-income workers come under the DWP's remit. But the big question is how will this change the way the state interacts with people in work? In this chapter, we focus on how the government might support this group. After briefly outlining this policy shift, we review recent developments in this new, experimental, policy area and consider whether or not we are on the right track not only to support people into, but also to progress in work.

IN-WORK BENEFITS: FROM TAX CREDITS TO UNIVERSAL CREDIT

Alongside conditionality for people who are out of work, many countries also seek to incentivize employment via in-work benefits. As with active labour market policies (ALMPs) for the unemployed, in-work benefits also vary in design. They are also typically combined with other “make work pay” measures including minimum wages, and have the twin aims of incentivizing employment and reducing in-work poverty (Clegg 2015). Particularly since the 1990s, and against a backdrop of “deindustrialization and labour market flexibilization”, in-work benefits saw considerable expansion across advanced welfare states – as the carrots to the sticks of conditionality (Clasen 2020: 2).

In-work benefits have made a significant difference to the incomes of low-income working households (Ray et al. 2014). They have also been historically popular across political divides. However, while they are “a response to … the growth of low-wage jobs and atypical types of employment”, they may also support it (Clasen 2020: 10). Policymakers express concerns about both the sustainability of growing in-work benefit expenditure, and the extent to which it subsidizes part-time and/or poor quality work (Clegg 2015).

The UK has been a keen innovator of policymaking in this area as it explores the possibility of extending behavioural conditionality to working social security claimants. The Social Security Advisory Committee (SSAC 2017) described this as a “ground-breaking” move with “no comparable precedents”, and marks a fundamental shift in the reach of conditionality to those in work.

In 1969, Johan Galtung introduced the concept of “structural violence”. He urged that we consider how and in what ways violence could be construed as more than the physical act of harm from one body to another, and how the very society we inhabit acts to prevent people from realizing their full potential. In establishing this expanded concept of violence, Galtung offered a definition which is strikingly resonant today: “if a person died from tuberculosis in the eighteenth century it would be hard to conceive of this as violence since it might have been quite unavoidable, but if he dies from it today, despite all the medical resources in the world, then violence is present” (Galtung 1969: 168). What of today? December 2019 saw the emergence of a new, highly infectious disease targeting the lungs and other organs to devastating effect. Alarm grew in the scientific and medical community as to both its severity and transmissibility, with the rise of outbreaks in care homes and hospitals flagged to the UK government as early as January 2020 (Blanchard 2020). This failed to translate into political action. Two years into the pandemic and more than 150,000 people had died from Covid-19 in the UK alone. Many of these deaths were avoidable.

Ignoring warnings from officially appointed scientific experts, in the early days of the pandemic the UK government chose not to mandate testing older people for Covid-19 when discharged from hospital back into residential care. The consequences were severe: 40 per cent of the 48,213 people who died from Covid-19 in the first wave (mid-March to mid-June 2020) were care home residents (Scobie 2021). As late as 3 March 2020, Prime Minister Boris Johnson was boasting about shaking hands with “everybody” in a Covid-19-infected hospital (Weaver 2020). But as the pandemic unfolded, the rising rates of infection and mounting death toll forced action. Escalating messages to “shield”, avoid public transport and practice good hygiene and social distancing gave way to national lockdowns. However, preventative measures to halt the spread of the deadly virus all favoured the more privileged segments of society. A new hierarchy of employment emerged, with those occupations deemed as essential operating at the coalface of the pandemic and bearing the brunt of the risk.

The gradual retreat of Beveridge's attack on want, squalor, ignorance, idleness and disease has been cloaked by the principle of fairness: “Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits?” (Hamnett 2013: 499), to quote the Conservativeled coalition's George Osborne as a compelling example of the political appropriation of the concept of fairness. Such pronouncements are deliberate efforts to incite anger towards the lazy benefit scrounger living comfortably off the back of your hardearned taxes in order to justify scaling back or cutting benefit payments in general.

The Labour Party, too, were guilty of maligning benefit recipients, building their approach to welfare reform on the USA’s “Welfare to Work” legislation that made benefit provision conditional on job-seeking (Hamnett 2013). With the introduction of austerity, this approach escalated. Cutting and capping benefits while tightening eligibility criteria forced many into low-paid, precarious work. At the same time, public services were scaled back or lost. We saw examples of this in Chapter 4: cuts amounted to 750 closed youth centres, 4,500 youth work jobs lost, temporary closures of maternity units and severe wait times for mental health support. For the working-age group, the structural violence of austerity has been condemned as social murder: more people died from malnutrition, more homeless people died on the streets and for every 10,000 work capability assessments completed there were six more suicides (Grover 2019).

The reach of this violence extends far beyond the working ages. Although many older people, through the pension triple lock, were protected against any real-term loss to their state pension and assured that it would, as a minimum, increase in line with inflation, austerity was just as lethal for the less advantaged pensioners. The impact can only be construed as structural violence, which is present when violence is “built into the structure [of society] and shows up as unequal power and consequently as unequal life chances” (Galtung 1969: 171). It is evident that our welfare state is now failing. It is failing our children, it fails our workforce and it is failing our ageing population.

According to the Office for National Statistics life expectancy calculator, I currently have an average life expectancy of 88 years with a one in ten chance of reaching 100.

It's strange how little we talk about the fact that half of the 14 million people in poverty in the UK are disabled or live with someone who is. Nearly four in ten working-age disabled people live in poverty, more than twice as high as the rate for non-disabled adults. Comparing the UK with other European countries shows that we are failing our disabled fellow citizens to a greater extent than most other countries (according to official Eurostat disability statistics). We have a higher proportion of disabled people at risk of poverty and social exclusion than all the other northern European countries aside from Germany, which equals us. The gap between poverty rates for disabled and non-disabled people is also particularly high in the UK.

Disabled people tend to have lower incomes than non-disabled people, with higher costs, pulling them into hardship. Carers are also much more likely to be trapped in poverty than those who aren't caring for other adults, in large part because they need to balance paid work and unpaid caring, which restricts the hours and jobs they can do. Young carers are also disadvantaged where their school education or chance to gain more qualifications as an adult have been constrained by their caring role. Of the nearly 4.5 million informal adult carers in the UK, almost a quarter are living in poverty. Three factors drive this: limited access to good jobs, higher costs and inadequate social security.

ACCESS TO GOOD JOBS

Work is how most people escape poverty, but disabled people are far less likely to be employed than non-disabled people and they’re paid less when they are in work. Just over half of disabled people were employed in 2019, compared to 82 per cent of non-disabled people. That gap has closed slightly in recent years but incredibly slowly. Work generally needs to be full time to be a reliable route out of poverty, but disabled people are more likely than non-disabled people to work part time: 32 per cent compared to only 20 per cent.

Running parallel to the struggles over the city was a struggle in the halls of power which pivoted around a redefinition of the very purpose and method of governing. This pivot has been examined through various terms – “neoliberalism”, “free enterprise” or “marketization”. But all of them reference a principle called “public choice”: the market rather than government is the most efficient mechanism by which to maximize social welfare. Part of this principle implies that administrators should govern as if the state – local and national – is a business.

In 1976, Oxford economists Roger Bacon and Walter Eltis published Britain’s Economic Problem: Too Few Producers. In the book they argued that the growth of government employment was at the expense of capital. They dubbed this swelling of the state as the “British disease” – a “shift of employment from industry to services, and public services in particular”. The disease, they argued, “had no equal in any other large Western developed economy” (Bacon & Eltis 1976: 12). As a solution, the authors promoted a pro-business approach, which trusted industry and commerce – rather than the state and administration – with the generation of wealth.

Concerns about state spending pulled at the seams of governance. Many on the Conservative right saw a necessity for huge cuts, using private enterprise to replace state inefficiencies As Labour formed a government in the wake of the oil crisis and recession, there was growing acceptance that drastic economic measures would soon need to be taken. Some in government argued that nationalization had not gone far enough. Still, the public mood was shifting as the economy suffered.

Housing and land became key areas of contestation. To reduce costs and generate revenue entailed freeing up and repurposing prime real estate, especially in cities and conurbations. The local state was marshalled to increase the price of land and property as more and more of the nation’s wealth became bound to property markets.

The politics of redevelopment from the Edinburgh clearances onwards has always produced dual effects – on the one hand, destroying substandard homes, on the other hand, providing good homes at a higher price.

A piece of advice: if you’re going to live through a deep recession, do your very best not to be a young adult. If you must be young, don't be Black (or Pakistani or Bangladeshi). If you insist on being both young and Black, try your very hardest to have welloff parents.

I remember being told years ago that children and young adults are much less likely to be seriously hurt by a fall than older ones. They’re more flexible and more resilient than older adults whose bones are more brittle and muscles less elastic. The younger you are the more quickly and easily you bounce back. Sadly, the opposite seems to be true of young adults and recessions.

In 2011, a young man called Marc took part in the Poverty and Social Exclusion research project in the UK (Poverty and Social Exclusion 2013). He was 19, lived in Redcar in North Yorkshire and had been looking for work for two years. He’d applied for hundreds of jobs and been on umpteen employability schemes but had no luck. In his area there were 5,490 people on jobseeker’s allowance and looking for work but only 460 vacancies. He lived with his sister in charity-supported housing but only had four months left on his tenancy there. Marc talked about his hopes for the future and his struggles both materially and with his mental health: I’ll probably want in my life just to be stable enough to feed myself and my kids, cos my Mum couldn't when … she couldn't afford to feed herself when she was feeding us …

Some days she couldn't afford to feed us and herself so she would feed us and she would starve herself for two days. Just things like that. That would really affect someone. I wouldn't want to bring up someone like that. I would struggle. I don't know how she went through it at all …

I’ve been searching for work for two and a half years, near enough three, and it's coming up clueless at the moment. Must have been hundreds, hundreds of jobs I’ve applied for in the past two/three years. Bar tending jobs, cleaning jobs. Everything you can probably think of, even fixing lampposts …

In this concluding chapter, we return once more to North Kensington, London. It should have become clear by now that many of the historical, political and theoretical threads of this book lead to the fire at Grenfell Tower, in the Lancaster West Estate. In the Introduction, we claimed that squalor is inextricably bound to mortality and an ever-increasing proximity to death. The Grenfell Tower fire, we suggest, is the form that twenty-first-century squalor takes – and might take again. Those who consider themselves far removed from the stereotypical figure of squalor – criminal, impoverished, living off benefits and in broken social housing – might now need to reassess their proximities.

FIGHTING FIRE

With an unprecedented swing in the 2017 snap election, Labour candidate Emma Dent Coad took London’s Kensington constituency. Dent Coad’s incredibly close victory was cheered on by participants of several local movements campaigning for public space under the Westway, for the retention of local amenities, and for housing justice in general. Amongst the crowd gathered outside the Town Hall was Ed Daffarn of the Grenfell Action Group who was busy encouraging electoral observers to investigate the local council. With Dent Coad’s victory the press began to pay attention to this working-class community in the heart of London, which, despite waves of gentrification, remained embedded in the wards of North Kensington.

Days later, Ed Daffarn barely survived Britain’s deadliest residential fire since the Blitz. The scale of the crime has now become clear to all, with the Grenfell Tower Inquiry revealing a widespread knowledge of the risks of the cladding system and insulation. Arconic, Celotex and Kingspan were well aware of the combustibility of their products, but they still marketed them as safe.

As we have noted, the government as well as privatized regulatory bodies knew that the products sold by corporate crooks and killers presented a significant threat to life. They allowed the ambiguous classification of Class 0 to hold for products they knew to be combustible, because they did not want to “distort the market” by specifying what was safe or unsafe. Deceiving themselves wilfully, they did not even plan for the eventuality of serious cladding fire, despite evidence from a number of domestic and international incidents.

Mexico witnessed a profound transformation from the 1930s onwards that changed its social and economic structure. It became a more urban, increasingly educated society and with longer life expectancy. The economy grew more sophisticated and eventually became a major trading partner in the North American region. This chapter will chart the stages through this long process beginning with the period of rapid growth stimulated by domestic demand and import substitution. The shortcomings of this development model began to falter in the 1960s and created a series of contradictions that were not possible to overcome immediately and not without major structural change. Until that eventually happened, Mexico relied on foreign debt and oil revenues to maintain its rapid rate of growth, but that only made the contradictions more profound so when the debt crisis exploded in the early 1980s, the fall was even deeper. The structural reforms of the 1980s and 1990s that followed a decade of stagnation, further changed Mexico’s economy and society. Some sectors and regions developed much more than others, the successful ones linked to foreign trade and the US economy, while others more isolated remained less developed and lagged behind. There were no effective policies to ensure a more balanced growth. Those changes were accompanied by an incipient and slow democratization process, that is still on its way today.

THE GOLDEN AGE OF IMPORT-SUBSTITUTION INDUSTRIALIZATION

For many countries the Second World War was the starting point of a long-lasting policy of import-substitution industrialization. The isolation of those economies forced them to look inwards and promote domestic industry with protection and sometimes subsidies. That was not the case of Mexico. Owing to its geographic location, Mexico continued to trade with the United States throughout the war and was able to grow at a rapid pace. As the world conflict ended, the Latin American economies, despite further isolation succeeded in growing fairly rapidly during the postwar period (Bulmer-Thomas 2014: ch. 8). Mexico implemented a policy of import substitution industrialization late in the 1940s, which fuelled its continued growth.

The combination of well-regulated market capitalism and active government redistribution have led to enormous rises in living standards and reductions in poverty over the last two centuries (Ortiz-Ospina 2017). Changes to how production was organized and the rise of industrialization led to an explosion of expertise, innovation and productivity (as well as the continued exploitation of people in many parts of the world which had been colonized or forced to feed the economic success of dominant powers). People in countries that embraced market capitalism are able to enjoy living standards, comforts and leisure unimagined by their predecessors and still far out of reach of vast swathes of the world's population. These gains were not simply the result of untrammelled markets however. They also rested on the growth of governmental ambition and reach. GDP has grown massively in the last century but, equally importantly, government spending as a share of national income has also shot up since the 1930s: from under 10 per cent in the UK at the start of the twentieth century to over 30 per cent by the end of the century (Brien & Keep 2018).

Ironically, given that their proponents tend to be locked in conflict, it seems to have been the combination of globalization and public spending, especially on social safety nets, that have delivered better living standards and lower poverty. We have talked a lot so far about the safety net side of this equation, but what about the markets side?

At the heart of market capitalism is the idea of the active consumer. The market organizes itself to meet the evolving needs of its consumers, competing for their custom and innovating to get an edge over the competition either by reducing prices or improving the goods or service being bought. Since poverty is about someone's resources not meeting their needs, reducing costs can free people from poverty if it means their resources can go further. When food prices are low, more people can feed themselves. If the cost of heating falls, more people can afford to keep their homes warm. Over a decade of research on living standards and the cost of meeting our basic needs, Loughborough University's minimum income standards programme has offered striking examples of the power of this to improve people's lives (Hirsch et al. 2018).

South Korea’s industrial giants, the chaebols, were indeed one of the major engines of economic growth as we have discussed in the previous chapters. Also illustrated is that the economic contribution of chaebols, however, was made only possible by the state’s intervention and support. In this chapter, we delve into the transformation of this so-called developmental state–business relationship from its formative years to post-crisis changes in an effort to explain how such a heretic system of market capitalism has functioned – with exceptional performance – during the miracle period, and why this system began to show schisms and finally has fallen prey to more full-on neoliberal global capitalism in the late 1990s. Further, we will review what has happened after the crisis and how, despite such a colossal shock, the South Korean government and chaebols have rebuilt the economy, maintaining a still cosy but economically efficient relationship. More specifically, we expound upon the overall changes of state– business relations from the combination of “commanding dependency” and “dependent manipulation” to that of “hollowed commanding” and “bargaining dependency” as a result of the success of “late industrialization”. The post-crisis transformation of the state– business relations under the growing influence of globalization and democratization will also be defined as “politicized coordination” and “cooperative politicking”.

IDENTIFYING THE STATE–BUSINESS NEXUS

Despite the potential for misconceptions, the Korean economy had never been a fully market-oriented one even following periods of economic liberalization in the 1980s and 1990s. For example, most of the daily necessities, including flour, charcoal briquettes (yeontan), noodles, bus and taxi fares, bath house fees and petrol/diesel prices were strictly controlled by government regulation. Now, in the era of neoliberal globalization, such explicit controls may not be available but the government is still implicitly controlling major items, which has a significant effect on price levels, including but not limited to transit fares, highway tolls, tuition of private educational institutions, telecommunication charges, realtor commission, credit card transaction fees, poultry prices and, amid the Covid-19 recession, delivery application commissions. These cases demonstrate that South Korea’s government has persistently interfered with the private sector but the ways in which it intervenes and its policy goals to achieve by the interventions have been dynamic over time.

Finally, it's time to talk about the twin elephants in the room. First, taxes: how we raise the money to pay for the public services we all rely on and which are crucial to slaying the poverty giant. Second, housing: housing costs are a central driver of poverty, locking people into poverty even as wages rise. Too many people in poverty are trapped in overcrowded, damp, unsafe homes. High costs and insecurity pull increasing numbers into homelessness. These two issues are linked. The structure of our tax system helps to shape both the housing and labour markets. How we raise money is as important as how much we raise and how we choose to spend it. Increasing the supply of housing is vital but not sufficient. We also need to change the structure of the housing market and the ways in which housing operates as an asset as well as a home.

In 2018, David Willetts (a Conservative MP and minister in the 1990s and again in the Coalition government from 2010 to 2014, now in the House of Lords, colloquially known as “Two Brains”) gave a speech in which he delivered some home truths to his fellow boomers (Willetts 2018):

It doesn't require two brains to know that he was right, or that actually achieving this shift is a political nightmare. But the argument that regularly breaks out about wealth taxes and inheritance needs to be understood in the broader context of how both our tax system and the shape of our national wealth have changed over the last few decades, and the pressures which make it imperative that we grasp the nettle of redesigning our approach to both.

We have already seen that disabled people are much more likely to live in poverty compared to non-disabled people, that this is closely linked to the prejudice that still exists against them and that their social security support has been eroded in recent years. Two other dimensions of equality that are intimately connected to poverty are ethnicity and gender.

RACIAL INJUSTICE: THE INVISIBLE POVERTY TRAP

In 2020, the persistence and consequences of racial injustice were put into stark relief by the combination of the shockingly unequal impacts of the Covid-19 pandemic and increased activism and awareness sparked by the murder of George Floyd and the rise of the Black Lives Matter movement. People from Black and South Asian groups suffered disproportionately high death rates from Covid-19, as did people from deprived backgrounds. This shouldn't have been a surprise. Health inequalities are longstanding and stubborn: people from poorer backgrounds have higher rates of illness and shorter, less healthy lives than those who are better off. The accumulated stresses of poverty, the impacts of unhealthy housing and poor-quality work, and less access to health and other services all combine to produce this pattern. The Covid-19 pandemic followed the same path, disproportionately hitting people who already had poor health, lived in overcrowded homes and did jobs that meant they were at higher risk. That led to disproportionately high deaths among people from some Black and minority ethnic groups because of the higher proportions living in poverty, in bad housing and in low-paid, insecure jobs which couldn't be done from home.

If you live in a Black or minority ethnic family, your chances of living in poverty are much higher than if you live in a white family. A fifth of people in white families live in poverty, compared to more than a third of those in Black and minority ethnic families. The patterns vary across different ethnic groups of course: more than half of people in the Bangladeshi group live in poverty, nearly half of Pakistani people and four in ten Black people. By contrast, a quarter of those of Indian heritage do: still higher than the fifth of white people but a much smaller gap.

The most important reason for the higher poverty rates is inequality in our labour market.

If we accept that productivity plays an important role in creating the potential for higher wage growth for low-paid workers, and that better management is key to improving this, the next question has to be how might we achieve this?

It turns out that there is already an answer to this question ready and waiting in the form of “Good Work”. Gaining momentum in recent years as a response to growing insecurity in the labour market, the Good Work movement offers both a view on the practices that are necessary to improve workplaces, and examples of practical action having been taken to increase standards across the economy. In this chapter, we chart the progress of the Good Work movement and consider what else needs to be done to get the UK out of its low-pay, low-productivity rut.

Policy interest in “good” or “decent” work is not new and indeed pre-dates the Beveridge Report. Established in 1919, the International Labour Organization (ILO) brought together governments, employers and workers in order to set labour standards, develop policies and devise programmes that promote decent work for all. In 1944, the ILO's Declaration of Philadelphia set out the key principles for the ILO's work after the end of the Second World War. The Declaration states clearly that “poverty anywhere constitutes a danger to prosperity everywhere”, and includes commitments to promote programmes that willachieve living wages and “ensure a just share of the fruits of progress to all”. It also highlighted the importance of job satisfaction, well-being, and “the cooperation of management and labour in the continuous improvement of productive efficiency” (ILO 1944).

But although the notion of good or decent work has been with us for a while, its profile in policy debates has grown more recently in the UK context and internationally as job opportunities have polarized, working conditions have worsened and work has become increasingly precarious (Osterman 2013). In addition to low pay, poor quality insecure work (including zero-hours contracts and bogus self-employment1), a lack of progression opportunities for low-paid workers and low productivity are all now high-profile issues on the UK policy agenda.

Alongside political pressure resulting from the high profile rise of zero-hours contracts and poor working conditions in the gig economy, policymakers have increasingly become interested in promoting “good work” as part of efforts to improve productivity outcomes.

November 2022 marks 80 years since Beveridge's landmark report appeared. His proposals capitalized on the spirit of a population ravaged by war that was ready to work together to secure improved labour standards, economic advancement and social security for all. He was explicit in the importance of universality, refusing to be drawn by “sectional interests” and advocating for what truly was revolutionary. Rebuilding the country after the war was going to require an interlocking attack on all five giants. The report's “Assumption B” – that there would be a comprehensive national health service for all – underpinned the whole endeavour. But what of Assumption B today?

In 1942, the leading cause of death was “Other Myocardial Degeneration” (as defined by the International Classification of Disease). In other words, heart disease. It accounted for 8.1 per cent of all male deaths and 10.6 per cent of all female deaths. Cardiovascular health more broadly – other diseases of the heart and of blood vessels – accounted for an additional 8.8 per cent and 7.3 per cent of deaths for males and females, respectively. Among the remaining top ten leading causes of death were respiratory diseases such as bronchopneumonia and tuberculosis, strokes and cancers of the stomach for men and breast for women. Heart disease, lung disease and cancer remain global killers. But the giant of Disease evolved and so must our attack on it. Table 8.1 unpacks in more detail just how different that attack might need to be, comparing leading causes of death by age group and gender in 1942 and 2020. The burden of mental health is acutely visible in the prominence of suicide as a leading cause of death for younger ages today, but that is just the tip of the iceberg. And, were we interrogating data from 2019, for example, the toll of dementias in particular, but also cancers and heart disease, would also be visible. But more striking, given that once assumed transition through the age of receding pandemics, is the cost of Covid-19 in accounting for 12.9 per cent of all male deaths and 10.3 per cent of all female deaths.

There can be no greater signal for the need for change than the impact of a global pandemic in which millions lost their lives. But a revolution is needed when so many of those deaths were because of the toxicity of the social structures which characterize contemporary British society.