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Time for a New Social Contract – Policy Options for a More Equal Society

Colette Bennett outlined Social Justice Ireland's policy options for a new social contract at our Social Policy Conference 2020.  Below is an extract from her paper.  

Most people pay little or no attention to the Social Contract that underpins their relationship with the State.  Yet the Social Contract is very important as it sets out the, often unwritten, agreement whereby the citizen contributes to the common good – economically, socially and culturally – on the assumption that the State will ensure a minimum standard of living, essential social services and infrastructure, and the protection of basic rights. 

Moments of great upheaval often see people raising major questions concerning what was simply taken as ‘given’ previously. The Covid-19 pandemic has provided such a moment.

The initial response to these new challenges showed a solidarity that is not always obvious in the usual day-to-day experience of most people.  But it also shows up the inequalities that are built into our society.

The economic lockdown imposed the greatest cost on many of those already worst off.  Thousands of jobs have been lost in hospitality, leisure, and related sectors which are characterised by a high incidence of low pay and, often, precarious working pratices.  Many of those who are still working and risking their lives such as carers and healthcare support workers, as well as shelf-stackers and cleaners, are also among the lowest paid in our society.

Government clearly acknowledged that the basic welfare payment of €203 is too low when it set the Pandemic Unemployment Payment at €350 a week.  If it is too low for those becoming unemployed, then it is too low for those already unemployed.  It is well beyond time that every person in Ireland was guaranteed an income which provided a Minimum Essential Standard of Living as set out by the Vincentian Partnership for Social Justice[1].

Once Covid-19 has been defeated, all countries will face a major challenge: to decide if the experience of recent months and our response to it should shape the future of our society.  We must learn from this experience and tackle the inequality and exclusion that we’ve failed to address heretofore. 

What we see clearly now is that the healthcare services that struggled in normal times are being provided with significant additional resources that, we were told, couldn’t be even considered prior to the pandemic.  What was claimed to be impossible then is taken to be the only sensible course of action today. 

All this suggests there is something profoundly amiss with our Social Contract. Once Covid-19 has been addressed successfully it is crucial that we face up to the radical reforms that are required if we are to reverse the prevailing thrust of policy-making over the past four decades which has failed to eliminate the inequality and exclusion that blights our society.  We need a social contract that is underpinned by a commitment that Government will work at all times to produce five key outcomes simultaneously. These are:

1) a vibrant economy;

2) decent services and infrastructure;

3) just taxation;

4) good governance; and

5) sustainability. 

Working to achieve one or two of these outcomes, rather than all five simultaneously, would simply lead to further inequality and exclusion. 

We need the investment in infrastructure and services to develop a thriving economy.  We need just taxation to fund this.  We need good governance to ensure people have a say in shaping the decisions that impact them.  We also need to ensure that everything that is done is sustainable; environmentally, economically and socially. 

This will require new approaches to the world of work and a recognition of much of the work done in society that goes unpaid, under-recognised and undervalued.  It will also require recognition that our tax and welfare systems are not fit for purpose in the twenty first century.  The social welfare system and the income tax credits system should be replaced by a Universal Basic Income which would be far more appropriate for today’s economy.

A new Social Contract will also require us to give climate action the priority it urgently needs. The response to Covid-19 shows that society can be mobilised quickly and effectively to address a real and present danger.  Climate change represents such a danger, but the policy response so far has been wholly inadequate.  We now know that we can respond quickly and effectively to major threats. An effective response to climate change must figure prominently in the new Social Contract.

Even at the earliest stages of this pandemic, the critical value of having an effective public sector was illustrated. The focus of recent decades on constantly reducing the role of the public sector has been shown to be wrong.  Countries with a functioning public sector that caters for essential health services for all have been shown to be better equipped to deal with the pandemic than those without, including Ireland with its two-tier system of healthcare.  We cannot return to a two-tier healthcare system when this pandemic has passed.

Some might think this is not the time to focus on issues such as the future of the Social Contract. History says otherwise. Before World War II had concluded, plans were already being laid for a major re-structuring of societies. In 1941 President Franklin D. Roosevelt and Prime Minister Winston Churchill issued the Atlantic Charter, which led to the establishment of the United Nations. In 1942 the Beveridge Report, with its commitment to a universal welfare state, was published in the United Kingdom.  In 1944 the Bretton Woods conference put together the post-war financial architecture.

Now is the time for creative thinking about what society should look like when the pandemic has passed.  Business as usual is not acceptable.  We need a new Social Contract.

The full paper is available to download here.