The UK National Reform Programme: Achieving a Balance?

1. The UK National Reform Programme: Achieving a Balance? ACW/MOC/ACV/CSC Conference Brussels 19 September 2011

2. Balancing Economic & Social Policy • Poverty and Employment in the UK: recent developments • The UK NRP – getting the balance wrong • The impact of the new Process – engaging civil society • Priorities for tackling poverty – beyond the NRP

3. Who we are • Poverty Alliance is the anti-poverty network in Scotland • More than 150 members, core funded by Scottish Government, 9 members of staff • Key concerns are around low incomes, services to address poverty, participation of people in poverty in policy development and attitudes to poverty • Currently support the Scottish Living Wage Campaign, Scottish Campaign on Welfare Reform, Stick Your Labels stigma campaign • Also active in UK networks and campaigns as well as with EAPN.

4. Recent Trends in Unemployment • After falling, unemployment has begun to rise again, now stands at around 7.9%, just over 2.5M • Work-less households now at a 10 year high (370,000) • Unemployment amongst women is at a 23 year high • Youth unemployment has also started to rise again with over 20% unemployed • Now 5.6 people per vacancy compared to 2.3 in 2008

5. Recent Trends in Employment • Performance in employment has been worse than expected, after beginning to improve from early 2010 • Employment fell by 96K in 3 months to July, the rate now stands at 70.5% • Private sector not absorbing public sector job losses – 110K lost in 3 months to June, only 41K created in private sector • Highest level of 'forced' part-time workers, 1.26 million, since 1992

6. Recent Trends in Poverty & Incomes • During recession average incomes increased. However during 2010-11 h/h incomes feel back to 2003-04 levels • Poverty amongst pensioners and children fell during recession, due to changes in tax & benefits • Poverty is predicted to increase by 800,000 by 2013-14 • Debt remains a critical problem, more than 9,000 contact CAB for help every day • Fuel poverty predicted to increase from 5.5M h/h to 6.4M in 2011

7. Key elements of UK NRP • UK Government makes very little mention of poverty or employment for those currently excluded from the labour market • Economic growth remain the key objective, alongside reducing the deficit. Emphasis is on competitive taxation system, need for investment and exports for a 'balanced' economy, and a more educated workforce. • The focus of the NRP was on five bottlenecks to growth: reducing the deficit, reform of the financial sector, rebalancing the economy towards exports, increasing fixed private investment, improving education to help human capital formation

8. The UK NRP: Poverty & Employment • UK Government set no target in relation employment: rather the objective is to increase 'employment opportunities for all' through reform of the welfare and tax system. • Main elements of the employments approach were the introduction of the Work Programme (system to provide long term back to work support) and the introduction of the Universal Credit. Both will significantly increase conditionality within the system • No target was set for poverty reduction. UK Govt will use child poverty as the target for poverty reduction. It is not clear how this fits with the EU level poverty target

9. UK NRP: The Commission Response • EC identifies various weaknesses in the UK economy: the unstable housing market, which in part explains high housing benefit costs. • Also noted that whilst the UK has a very flexible labour market youth unemployment increased significantly, and there remains problems with skills and education • The high proportion of children living in work-less households (17%) was also identified as a key problem • Despite these problems, the EC response make no reference to the lack of employment or poverty targets in the NRP

10. UK NRP: Stakeholder Engagement • UK Govt believes that the NRP was 'subject to extensive public consultation'. This is a significant exaggeration! There was no public engagement on the NRP. There was consultations on various policies within the NRP, but no discussion on the overall approach • Mechanisms for stakeholder engagement around EU social inclusion process were scrapped at the beginning of 2011. The preference is now for 'upstream engagement' • Civil society engagement with EU processes – the NRP, EPAP, Social OMC – is a very low ebb. There will need to be significant rebuilding of capacity to engage

11. The Impact of the European Semester • It is hard to identity the footprint of the European semester on economic, social or employment policy in the UK. • The UK's approach to fiscal consolidation appears to be driven by UK rather than EU priorities. • The lack of plans for poverty reduction in particular, and the absence of any Commission comment, appears to reinforce the fundamentally unbalanced nature of 'Europe 2020' • In the UK's case, it would appear that it [EU2020] is a process that can sit alongside domestic agenda's without being influential on the approach that is taken.

12. Conclusions • There is a need to accept that despite the social dimension to Europe 2020, in practice it appears to be dominated by economic growth concerns. • It is questionable how far social NGOs, Trade Unions and other civil society organisations can use EU2020 to drive a social agenda. • There is a need to build coalitions at national and EU level that are able to make demands that reflect the needs of citizens • We should remain engaged with EU2020 and the semester, but we should not be dominated by it.

13. Contact: Peter Kelly Director, the Poverty Alliance peter.kelly@povertyalliance.org www.povertyalliance.org http://thereisabetterway.org http://marchforthealternative.org.uk