◼ ECONOMICS Bloomberg Businessweek September 23, 201932
● Universal Credit was a good idea that became bad policy, helping crystallize support for BrexitBritain’s Botched
Welfare Overhaul
The agonizing effort to leave the European Union is
taking up every breath of U.K. politics, so most peo-
ple haven’t taken note of the 10th anniversary of
one of the root causes of the country’s discontent.
Back in September 2009, a group of research-
ers, academics, and management consultants hired
by a think tank led by a Conservative Party gran-
dee published its recommendations for simplifying
Britain’s complex social-security system. It laid the
groundwork for a big idea: Six types of benefits—
including tax credits for parents, unemployment
payments, and contributions toward housing—
should be bundled into a single payment known as
Universal Credit. Within a year, the Conservatives
had won power and the overhaul was under way.
Conceived as the centerpiece of a welfare state
fit for the 21st century, Universal Credit has instead
become a symbol of the breakdown of the British
social contract. The theory behind the plan has
been applauded by many advocates for the poor:
People would know exactly what money they
were entitled to and would be able to access itTHE BOTTOM LINE The billions of dollars in aid for farmers that
the Trump administration has approved may not be sufficient to
cement his hold of the rural vote in 2020.including 1,258 self-identified rural respondents.
Support among farmers is even higher: 67% back
Trump, up from 60% a year ago, according to a Farm
Futures survey taken from July 21 to Aug. 3.
Any waning of rural America’s enthusiasm for
Trump could doom the reelection of a president
who eked out his 2016 victory with a combined
margin of fewer than 80,000 votes in three tra-
ditionally Democratic-leaning states, particularly
after the 2018 midterms showed weakening sup-
port for Republicans in suburban areas. In Iowa,
Democrats last year wrested two of the state’s
four house seats from the GOP, leaving northwest-
ern Iowa’s Steve King the state’s lone remaining
Republican congressman.
In the northwestern corner of Iowa known
as God’s Country for its concentration of DutchChristian Reformed and Roman Catholic church
members, at least one farmer is unsure about
who’ll get his vote in 2020. Brian Kemp, who grows
soybeans and corn on 1,500 acres that have been
in his family for 120 years, supported the presi-
dent in the last election—like just about everybody
in Iowa’s 4th Congressional District, where Trump
trounced Hillary Clinton to the tune of 60% to 33%.
“I guess I’m kind of waiting to see how the trade
issue gets resolved or if it gets resolved,” says Kemp.
“Something needed to be done, it’s just unfortu-
nate it hit agriculture so hard, particularly soy-
beans.” �Mario Parker and Mike Dorning, with
Michael Hirtzermore easily. Yet the rollout, which began in 2013,
has been beset by delays and IT glitches, leaving
recipients without essential funds. What’s more,
an almost decade-long austerity drive has made
awards less generous. Just 1.8 million households
have migrated to the new system, a fraction of the
more than 7 million that were initially estimated
to be eligible.
A major improvement on paper looks more like
“Universal Discredit” in practice, according to a
November report authored by Philip Alston, the
United Nations’ special rapporteur on extreme pov-
erty and human rights. Alston, whose report was the
product of a two-week fact-finding tour of the U.K.,
found it can take up to 12 weeks for claimants to get
the money they need, meaning some have to forgo
heat and food. He concluded that about 20% of the
population lives in poverty. The U.K. government
called the report “barely believable.” The Office for
National Statistics puts the figure at 17%, while the
government says what it calls persistent poverty is
more relevant, and that’s 7.8% of the country.