The politics of ​“welfare” has distorted public perceptions of social security

When general elections come around, the question people often ask themselves is whether they feel better off than they did last time they voted. Alongside people’s experiences of public services and the general state of where they live, many will be mindful of how their level of disposable income has changed, particularly given the cost of living crisis we’ve all lived through in the last few years. This is the first parliament on record to see a reduction in living standards.

Although this crisis has been felt most acutely by those on the lowest incomes, poverty and inequality have so far not been prominent issues in the election campaign. The swing voters that parties focus their attentions on might be feeling less financially secure than at previous elections, but they don’t typically tend to be those on the lowest incomes.

Parties focus on the issues and policies they think will have the widest appeal or speak most strongly to people’s aspirations, such as fixing the NHS or supporting home ownership. Talking about targeting support at those on the lowest incomes is often seen as more politically risky and less likely to be rewarded with votes.

When social security does come up during election campaigns, it is often framed as ​“welfare” with a focus on the need to bring down costs or move people into work, rather than on whether people in receipt of support are able to meet their essential costs. At its worst, political rhetoric on this issue puts the blame on those who need support, suggesting that people are choosing ​“a life on benefits” rather than finding work.

All of this can leave the public with a skewed sense of what life is like for people who are having to get by on universal credit. Attitudes around social security have softened in recent years, with a growing number of people thinking ​“benefits are too low and are causing hardship”. But new polling commissioned by NEF suggests that most people don’t have a clear sense of the level of support people currently receive.

We asked people how much they thought the basic rate of benefits for people who are unemployed is (not including additional support for housing) as a percentage of a full-time salary on the national living wage (commonly referred to as the minimum wage). The average estimate was 48%. We also asked people what this percentage should be, and the average response was 53%. In reality, it is just 23%.

The national living wage currently stands at £11.44 an hour for someone 21 or over – if they’re working a 35-hour week on this pay they would receive £400 per week. You need to be 25 or over to receive the full standard allowance of universal credit (the most common unemployment benefit) but, even then, it only equates to just £91 a week.

When the minimum wage was introduced 25 years ago in 1999, unemployment benefits were worth 40% of a full-time minimum wage salary, but this has atrophied since to just 23% now. While this was partly caused by welcome substantial real-terms increases to the minimum wage, it is also driven by benefits, at most, only rising in line with inflation during this period.

Given the baseline of a national living wage salary to anchor their estimates, the public overstated the value of unemployment benefit by about double, but on average thought it should be a further five percentage points higher still than that level.

This is not to say that the public would necessarily support a more direct proposition of increasing unemployment benefits from £90 to £200 a week without more political leadership on the issue. And although it was explicitly excluded from the question, the housing element of UC does add a significant amount to many people’s payments. But the framing of this issue clearly makes a big difference to the public’s understanding and perceptions. Given a more tangible and, for many, more relatable benchmark of a national living wage salary, people seem to assume that benefits won’t be much less than half of what is clearly not a ​“comfortable” income to exist on.

Neither am I expecting these findings to send a shockwave through the general election campaign. Although it is worth noting that there was not a huge variation in responses based on people’s voting intention: Labour supporters on average felt the basic rate of unemployment benefit should be 57% of a full-time national living wage salary, while Liberal Democrat supporters said 56% and Conservative supporters 46%.

However, the gap between the public’s perceptions of benefit levels and the reality should give the next government pause for thought about how they both respond to and communicate the challenges those on the lowest incomes are facing. There is clearly scope to develop a new consensus about the minimum levels of support people should receive, in relation to a more meaningful benchmark than the arbitrary level of current rates.

NEF has proposed that this benchmark should be the Minimum Income Standard (MIS), which is developed by the Centre for Research in Social Policy at Loughborough University in consultation with the public. The MIS sets out what a household needs to meet a decent standard of living. We believe that everyone should be supported to meet the MIS through a Living Income. As a stepping stone towards this, we support the adoption of an Essentials Guarantee in the social security system – which the next government should implement as a matter of urgency.

Image: iStock