Graham Leicester: Escaping the poverty trap

Nicola Sturgeon has set up an expert panel to explore 'a fairer welfare system'. Picture: Neil Hanna
Nicola Sturgeon has set up an expert panel to explore 'a fairer welfare system'. Picture: Neil Hanna
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AT THE start of 2010, Joyce McMillan wrote a powerful column in this newspaper expressing the intellectual challenge of our times.

I pinned it up on the wall in my office and have been worrying away at it ever since.

It places in a bigger, global context the current discussion about welfare cuts, this week’s Joseph Rowntree Foundation report on poverty, poor health and inequality in Scotland and the SNP’s insistence that an independent Scotland could do better.

McMillan argues that, given the challenges of the times and the absence of radical thinking in the other political parties, the SNP needs to raise its game: “To reach deep into this country’s remarkable history of political thought, and use it to move right to the cutting-edge of 21st century progressive politics, to a mature vision of where it wants Scotland to be in 2050, and a serious analysis of the negative global forces that will have to be faced down, and the positive international alliances that will have to be built, if we are to find ourselves there.”

I could not agree more. But it is not only the SNP that needs to realise how deep the financial crisis runs and how superficial and technocratic have been the responses to date. Deputy First Minister Nicola Sturgeon has set up an expert panel to explore “a fairer welfare system” reflecting “Scottish values”. Yet the group’s principal task is to provide reassurance that the existing welfare budget is affordable in an independent Scotland and to suggest how, whether and where to unpick the worst of the Osborne reforms. That does not sound very radical to me.

More promisingly, Alex Salmond surprised many last week by suggesting that rights to housing and free education might be elevated above day-to-day politics and enshrined in the constitution of an independent Scotland.

It was kite-flying on a preposterous scale. But at least his intervention moves us closer to the fundamental discussion of principle that McMillan was calling for.

Because everything is up for grabs now in our understanding of society, economy and the relation between the two. The implicit contract between the state and its citizens is everywhere under review. And the system of Western capitalism and neo-classical economics as we have known it for the past 30 years and more is struggling for legitimacy and effectiveness.

This week at Davos, delegates are gathering to discuss how to maintain a system that “continues to confer fortunes on those at the top, with little risk, while directing pain on to others”, as writer and columnist Will Hutton puts it. Western capitalism “has arrived at an apparent dead end. It is in profound trouble”, he concludes. It has lost the ability to renew itself from within.

Meanwhile, the London School of Economics, which had to write to the Queen in 2009 to explain why none of its experts saw the financial crisis coming, has just landed a £5 million grant for a new research centre to improve its performance in the future.

Its director disarmingly explains: “It became obvious soon after the start of the financial crisis that we did not have the tools to understand it, and were consequently less able to recommend policies to combat it.”

So we really are all at sea and all we discern on the horizon is a looming decade of destitution. Tinkering at the edges in these circumstances is a dereliction of duty. But if we are ready for a deeper conversation there are plenty of resources to hand.

Shortly before he died in 2010, the historian Tony Judt published his own response to McMillan’s challenge: Ill Fares The Land. It is an eloquent essay on the need to refashion social democracy for today’s world. He wrote it for his students: “The last time a cohort of young people expressed comparable frustration at the emptiness of their lives and the dispiriting purposelessness of their world was in the 1920s.”

Judt, like me, finds the determination to fashion a new way of living together in the wake of two world wars, the great depression, the general strike, the holocaust, and so on, both noble and inspiring.

As Judt says: “By 1945, few people believed any longer in the magic of the market.” With an active role for the state, the gap between rich and poor shrunk dramatically across Europe and the US. Yet it now stands at unprecedented levels. Economic policy was not based on demonising the undeserving poor, but rather on how it would impact on “the ethical coherence of the community”. It seemed unexceptional in this context for Sir William Beveridge to assert in 1942 that after the war, government should ensure “the abolition of want before the enjoyment of comfort”.

Why should we not think like this today? We would be building on firm foundations. Judt quotes liberally from Adam Smith on the moral underpinnings of a successful economy. The “giant evils” that Beveridge identified have been updated for today’s world in the Joseph Rowntree Foundation’s groundbreaking 2007 “social evils” inquiry.

Few political leaders today have the confidence to articulate the necessary grandeur of vision. US President Barack Obama did so at his inauguration this week. “We, the people, still believe that every citizen deserves a basic measure of security and dignity,” he said. “The commitments we make to each other – through Medicare, and Medicaid, and social security – these things do not sap our initiative; they strengthen us.”

Yet the paradox is he leads a nation further from realising these ideals than almost any other in the developed world. As he said, these truths may be self-evident, but they are not self-fulfilling. That takes dedicated political work over time.

Are we ready to put in that work, I wonder, to fashion a distinctively Scottish response?

I certainly thought so in 1998 when, in advance of devolution, the Scottish Council Foundation published Three Nations, an analysis of patterns of poverty and exclusion and the potential for a more productive relationship in the future between “settled, insecure and excluded” Scotland.

That report was followed by The Possible Scot, setting out a vision for the kind of person who might grow in Scotland with an enabling political, economic, social and cultural environment. We might quibble now about the language, but – like the values of wisdom, justice, compassion and integrity inscribed on the Scottish Parliament mace – if we could get anywhere near realising this vision today we would be rich indeed.

It has always been possible to act on these impulses under devolution – using powers for health, education, housing etc. To say nothing of the power to vary income tax or to pilot alternative benefits. Successive governments have put their shoulder to this wheel over the years, but the results suggest they have lacked either creativity or commitment or both.

Even so, there are many people in Scotland who have been mining McMillan’s challenge and making substantial progress for a decade and more. I hope we can now bring them together to shape a national conversation that reaps the benefit of their experience. It should be visionary, grounded and practical – and capable of nourishing the “ethical coherence” of a people whatever the result of the vote in 2014.

• Graham Leicester is director of International Futures Forum and a former director of the Scottish Council Foundation.