Welfare Reform As Moral Imperative

Philip Booth FAITH MAGAZINE November - December 2014

While many see the UK Government’s welfare policies as an “attack upon the poor”, Philip Booth argues that welfare reform can actually benefit the most vulnerable in our society.

Interventions by Christian clergy in welfare debates are commonplace. Indeed Cardinal Nichols argued this year in an interview for The Daily Telegraph that the welfare safety net had been torn apart. He was encouraged to speak out after listening to the experiences of his own priests. Not all concern with poverty expresses itself as a defence of Western-style welfare states, however. Pope Francis has spoken with great concern about poverty and inequality. He argues that this is a problem of justice that should not be solved by the permanent provision of welfare. Rather he would like all who can to have meaningful work so that they can provide for their families.

Nevertheless, in the Western world, the problem of poverty is generally seen by Catholic commentators through the prism of the welfare state. This is as true in the US as it is in the UK. Occasionally we hear Catholics recognise that there is a need for reform of the welfare state on the grounds of its unsustainable cost. However, we rarely hear an ethical critique of the whole principle of an all-embracing welfare state controlled by a government that spends nearly half of national income on it.

Yet the welfare state is a relatively modern institution and it is confined to perhaps 20 to 30 countries. In past times, the Church was the great provider of welfare. Substantial welfare states providing free healthcare, education, pensions, income transfers and often housing have only grown up in the last 60 years. The Church was often sceptical when welfare states were introduced and the social teaching of the Church certainly does not lead directly to the acceptance of the state as the main provider of welfare.

Indeed, there is a paradox at the heart of the welfare debate. Arguably, Catholic social teaching anticipated all the problems with state-provided welfare. However, as governments attempt reform, the Church is a continual critic from the sidelines. Perhaps the Church would play a more constructive role if it articulated and tried to bring to fruition its vision of a welfare society buttressed by the principles of solidarity and subsidiarity in the pursuit of human dignity and the common good. In doing so, the Church could ease the transition from all-embracing welfare states to something more human and more compatible with her social teaching.

Our National Religion

Possibly, the most intractable part of the welfare state is the National Health Service. Indeed, Nigel Lawson has described it as the nearest thing that the British have to a national religion. Should we treat it that way as Catholics?

There is a tendency to assume that, without the NHS, there would be no healthcare. But, in fact, it is the British model that is highly unusual. In Germany, for example, 51 per cent of hospitals are not government-owned: and this is not untypical of European countries. Ironically, the hospital celebrated in the 2012 Olympic ceremony – Great Ormond Street – was founded well before the NHS, as were most of our famous hospitals.

Although Catholic social teaching demands that all can access healthcare in order that human dignity and the common good are served, it does not demand a state monopoly. In 1947 we chose not to adopt healthcare systems similar to those in continental Europe, where the state assists organisations that develop organically within the community – including Church organisations. Instead, we chose a healthcare system in which the state is the sole supplier and financier. As well as questioning this from an economic perspective, we might also want to question whether we are comfortable with how the state uses its power within the system to impose its own values. Ethical boundaries are often crossed that should not be crossed.

Indeed, we should perhaps reflect on the fact that, when the NHS was formed, the then Archbishop of Westminster, Cardinal Bernard Griffin, fought for and obtained exemptions for the small number of Catholic hospitals arguing that it would be a “sad day for England when charity became the affair of the state”.

Assisting the Poor – the Problems of Welfare

But the focus of welfare debates today tends to be that part of the welfare state that provides income transfers to the less-well-off. As we hear in the reading from the Acts of the Apostles on Divine Mercy Sunday, the communities that formed the early Church shared goods providing for all in need. In Deus Caritas Est, Pope Benedict describes how, in the first few centuries after the resurrection, the Church was known for its acts of charity. Today an observer of the Western Catholic Church would note that it is perhaps best known for its campaigning for the state to take money through taxation from one group of people and distribute it through large bureaucracies to other groups of people – an act which is very far from the love, concern, compassion and sacrifice that are the hallmarks of charity.

What are the main economic effects of the welfare system? Sadly, we have created a welfare state which could not be more effective in discouraging family formation and work if it were deliberately designed to do so.

In the UK, nearly 20 per cent of children grow up in workless households and nearly 30 per cent grow up in families in which nobody works full-time. The welfare system encourages individuals to work at least 16 hours a week – though it has become more complex recently – and there is a big group of people who work exactly 16 hours a week. The UK has the highest proportion of households with children in which nobody works, despite having one of the best-functioning labour markets in general in the EU. We also have the joint highest level of single-parenthood and by far the lowest level of employment among single parents. Astonishingly, workless households tend to have more children on average than households with an adult in work.

These things matter. They matter very much. Two essential requirements for human flourishing are marriage and work. Solidarity begins in the family, in which we share goods and look after the sick, the young and the elderly. If family formation does not take place at the most basic level of parents marrying, where will the virtue of solidarity be nurtured?

The Welfare State and Marriage

The tax and benefit systems penalise marriage harshly. In a sense, the welfare state has tried to replace the traditional role of the male within families. The state will provide materially for the upbringing of children, instead of the father, while the mother looks after the children. In some cases the state provides the care for the children while the mother works to provide the income. Either way, one of the main functions of the family has, in effect, been nationalised. Indeed, making the male unnecessary was the explicit objective of many of the feminist supporters of our modern welfare state. Is it any wonder that so many young men seem aimless and have such short-term objectives in life?

The impact of these problems on poverty and human flourishing more generally is substantial. Only 2 per cent of households with children that have one adult working full-time and one part-time are in poverty – and that is despite the UK’s extremely high housing costs caused by planning policies. On the other hand, the absence of an employed adult in the family increases the chances of a child growing up in poverty considerably.

To establish a welfare system that strongly penalises families has no moral basis and ignores human nature. The Church, on the other hand, does not ignore human nature in her social teaching. From Rerum Novarum to Centesimus Annus, the role of the state in supporting the family – normally in non-intrusive ways – is paramount. The Church has also stressed the importance of institutions of welfare arising from within the community itself rather than promoting huge government bureaucracies that consume nearly half of the national income as the dominant providers of welfare.

Indeed, our welfare state is radically individualistic despite being most strongly supported by socialists. The deal is quite simple. If you cannot provide for yourself by your own efforts, the state will provide you with sufficient income for you to stand on your own two feet – without support even from the father of your children. Family support, support from other families, support from within communities through charity and welfare institutions, and so on, are assumed away. We talk about charity being a last resort as if the provision of income, health and education from the state should be the norm. This should be lamented by Catholics.

The Legacy to our Young

A further problem is the inter-generational injustice of welfare states. We are bringing up a generation of children that will have huge debts. These comprise not just the debts regularly discussed by the Chancellor of the Exchequer, but also the unfunded health and pensions liabilities arising from the post-1940s settlement. Credible estimates of these are at least five times the official government debt. Our younger generation will struggle to pay the taxes to fund the welfare promises that have been made to the older generation. This problem is partly caused by a low birthrate, of course, but that low birthrate is itself encouraged by the welfare state.

A Secular Welfare State or a Christian Welfare Society?

Reform is both an economic and a moral imperative. Reforms that ensure that those who can work do work should be welcomed. Unconditional welfare is very difficult to justify from the Catholic perspective – all should have the opportunity to contribute to society through work. A life of worklessness has nothing to recommend it. Of course, we should be careful to ensure that reform is handled sensitively.

When it comes to marriage things have, if anything, got worse since the coalition government came to office. And it is depressing to hear Nick Clegg being so critical of small attempts at reforming the tax system to reduce slightly the bias against marriage in the tax and welfare system as a whole.

Overall, we need a welfare policy that is pro-work, pro-family, pro-charity and pro-community. In particular, we need to reduce taxes on families, something that can only happen if government spending is reduced. When Rerum Novarum warned of the weight of taxes on families, Pope Leo XIII could never have dreamed that the state would spend half of national income. As well as the great riches of that document, in Centesimus Annus, John Paul II warned that the crisis of welfare states was caused by the state taking functions that belong to society – an important distinction. In Deus Caritas Est, Pope Benedict explained how human needs cannot be met by remote bureaucracies but find their fulfilment in loving personal concern. And there were also many lessons for welfare reform from Caritas in Veritate. But one thing is clear. The current settlement cannot easily be defended from the Catholic perspective. Furthermore, when it comes to reform, this government is only scratching the surface.

Philip Booth is the editorial and programme director at the Institute of Economic Affairs and editor of ‘Catholic Social Teaching and the Market Economy’, the second edition of which was published in May 2014.