Labour and Tory welfare systems ’cause resentment’

By Ian Dunt

Labour and Conservative benefit systems designed to 'make work pay' often leave recipients feeling aggrieved and resentful, according to new research.

Academics found that Labour's working tax credit (WTC) and its projected Conservative replacement in the universal credit system are poorly understood and often psychologically hurtful to the people who receive them.

Both the Labour system and its Conservative equivalent are designed to top-up low wages to encourage the recipient to stay in work, but a survey of 36 women and 16 men receiving the payment by the Economic and Social Research Council (ESRC) and the London School of Economics (LSE) found many of them were confused as to its purpose.

"There were some important undercurrents of resentment," said Hartley Dean, professor of social policy at LSE.

"WTC does not of itself compensate for the injustices or adverse effects of a precarious and inadequately paid work.

"Paradoxically, hardly any of the people who took part in this research explicitly recognised that schemes like WTC are in effect a subsidy to low paying employers, but a lot of them felt devalued at work or locked in to menial jobs."

While the scheme was popular with recipients and they appreciated the extra income, they generally thought only 'other people' needed a financial incentive to stay in work.

The recipients' motivations to work were far more complex and varied than a simple response to a financial incentive, researchers found.

While they usually wanted to work, many complained that the jobs they were doing at the bottom end of the labour market "undermined their sense of self-worth".

There was a certain amount of stigma attached to benefit and many of the recipients felt "quite powerless" when it was explained to them how their entitlement was calculated.

"Our findings suggest that wage top-up schemes may not always be conducive to sustaining a morally meaningful work ethic among those workers who are systematically confined to the low-paid periphery of a polarised labour market," Mr Dean said.