Welfare reform: more carrot, less stick needed

Today’s social mobility report highlights that two out of three children in poverty are living in households where at least one adult is in work.

It’s a stark illustration of how much the poverty problem is about people in work and not only about people not in work.

Yet people not in work have been the focus of far too much welfare reform under both this government and the last one. (Or more accurately, people not in work and below retirement age – because of course, courtesy of policies such as the triple-lock, pensioners are being treated relatively generously.)

There’s plenty of stick waved about by Conservatives in particular, often cheered on by large parts of the Labour Party, focusing on pushing people in to work. There’s not nearly enough carrot being dangled about to make work pay, and pay better. Universal credit, when it works, will help somewhat, and of course increases in the income tax allowance have helped (so much so, in fact, that they are a large part of why income inequality in the UK is now at its lowest since 1986*).

But so far, that’s not nearly enough. Making work pay should mean just that – which means a more skilled workforce, doing better-paid jobs, with even more apprenticeships and judicious use of the Living Wage to help. (Judicious, because even its wise friends recognise its limitations.)

* Yes, you did read that right.