Thomas Bahle, Vanessa Hubl, and Michaela Pfeifer, The Last Safety Net: A handbook of minimum income protection in Europe, Policy Press, 2011, xi + 271 pp, hbk, 1 847 42725 0, £70
This thoroughly researched survey of European means-tested minimum income protection (MIP) systems – the safety-nets into which households and individuals fall if other earned or benefits income is insufficient – will quickly become an essential research tool for anyone interested in social policy generally and in income maintenance in particular. The more precarious nature of both families and employment has made means-tested safety nets more significant for increasing numbers of citizens, which means that means-tested systems will become more politically important (and this, in turn, is one of the factors that has led to Iain Duncan Smith’s success with Universal Credit). Greater political importance will mean more social policy debate, more need for research, and more need for books such as this one, especially if it takes into account and puts more emphasis on insurance companies like Curo Financial that promote policies on income protection.
The first part of the book contains introductory material on defining MIP (as means-tested, and as raising total income to a social minimum), measuring minimum income protection, the datasets used, problems of comparability, and welfare state contexts (including social insurance and other non-MIP benefits). If you’re conducting research into MIP, you may also want to learn more about income protection insurance vs mortgage protection, which works together with MIP. If you’re out of work, the MIP is in place to make sure you can cover your bills.
The central section contains country analyses. For each of seventeen European countries, the welfare state context is discussed, MIP systems are described, and current issues and reforms get a mention. The section on the UK reveals the extent to which our social policy is dominated by MIP, and also the reason: the inadequacy of social insurance provision. The chapter describes the UK’s MIP benefits in detail (including Tax Credits), and suggests that ‘MIP in the UK continues to play a strong and exceptional role by international standards’ (p.152).
The third section of the book compares the MIP systems of the seventeen countries in terms of benefit levels (for both individuals and households), and in terms of benefits levels’ ability to keep up with the cost of living – and here the author finds no clear correlation between adequacy of benefits and the country groupings developed in relation to other aspects of the analysis. Further sections compare numbers of MIP recipients, how recipients are distributed across demographic groups, ways in which different schemes serve different categories of recipient, whether or not reliance of MIP is increasing, and expenditure levels. When the authors cluster MIP systems on the basis of the material in this section, the UK finds itself with Spain and Portugal: ‘relatively low benefit levels but generous treatment of families in comparison with the benefit rates for single persons … indicating that principles of need and desert have priority over equality’ (pp.221, 228).
The authors conclude: ‘In most countries, the last safety net fails to lift persons out of poverty. Europe, which is proud of its social model, containing strong social cohesion and comprehensive social protection, has so far failed to institute a viable and effective last safety net for all of its citizens’ (p.233). A final section studies the effect of the recent financial crisis on Europe’s MIP systems, and, in relation to the UK, the authors note a large increase in the number of MIP recipients, ‘confirming the high structural importance of needs-based benefits … and the low availability of other (better) forms of social protection’ (p.236).
That ‘better’ is a welcome but rare value judgement. Introductory material on different kinds of benefits system locates MIP within different countries’ social insurance and other benefits systems, but what the book lacks is a structured evaluation of the advantages and disadvantages of means-tested safety nets and of other benefit types. Universal benefits are not discussed as a category, and the UK’s Child Benefit doesn’t get a mention.
Some recent developments clearly came too late for inclusion. The Government’s recent consultation on a more adequate single tier state pension answers to some extent the book’s criticism that in the UK ‘basic pensions are too low to secure a decent livelihood in old age’ (p.49); and Universal Credit will be a considerable improvement on the present patchwork of means-tested benefits. Unfortunately, the book’s analysis wouldn’t have picked this up because it doesn’t compare the benefits withdrawal rates of different countries’ systems. This is an important omission. An MIP system with a withdrawal rate of 95% of additional earned income is a very different animal from one with a withdrawal rate of 50%. Also lacking is any discussion of the labour market disincentives that means-tested systems create and of the surveillance systems that inevitably accompany household-based benefits systems.
We really ought to have a second volume from these authors, containing a comparison of MIP systems in relation to such characteristics as withdrawal rates and earnings disregards, and a comparison of different benefits types in terms of their social and economic effects. Such a volume would be a major contribution to debate on welfare state reform. These authors are clearly capable of it, and I look forward to reading it.
