Government intervention and free market policies

Topic: BusinessComparative Analysis
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Last updated: March 27, 2019

Government intervention and free market policies have been the two contrasting approaches to social policy and the welfare state since the end of the Second World War. Massive intervention has been more commonly advocated by the Labour party and has been used by the Conservatives on occasions. Free market policies were not really implemented until 1979 with the emergence of the New Right. However, despite this differing approaches crime and poverty in Britain has continued to rise throughout the 20th century. Education is an area of social policy that can be directly linked to crime and poverty.A good education can instil discipline and good morale principles turning people away from crime and by giving people a good start in life. Both intervening and free market approaches have been used by governments in regard to education.

The establishment of the tripartite system in the 1944 Butler Education Act was massive government intervention as was the establishment of the comprehensive system in 1964; both were introduced under Labour governments. Since 1979 Education has become more centralised, a move introduced under the New Right Conservatives.The introduction of the national curriculum set minimum standards in schools with the curricula being set by central government. Local authorities’ part in education was also weakened through the establishment of Local Management Schools and the free market approach of ‘market forces’ in schools through league tables looked to make schools more competitive. Thatcher’s changes were implemented in the 1988 Education Reform Act. Under New Labour there has been a continuity of education ‘market forces’ with further emphasis being placed on league tables and teacher performance through performance related pay.Blunkett’s ‘Head Start’ programme offering free early education to 3 and 4 year olds has been Labours main attempt to combat social exclusion through education, in the belief that an early education can counter the effects of a deprived upbringing as poverty is clearly linked to crime. However, despite these differing approaches and measures basic problems such as truancy remain.

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Truancy can be directly linked to youth crime and as of yet no government has significantly clamped down on it and the youth crime culture that surrounds it. In fact, youth crime has continued to rise.Attendance in inner city comprehensives is poor and the issue of weapons in schools still exists.

Petty crime such as graffiti is still widespread and can often lead on to harder crimes. So in education both intervening and free market approaches have been implemented with efforts to combat youth crime but with little affect on reducing crime. Social security is another area of social policy where there is a clear link to poverty and in turn crime. Old Labour and the Liberals ideology mean they believe in high social security benefits, helping people out of poverty and reaching greater equality in society.However this approach has come under attack from the New Right who argue that a dependency culture is developed and people enter into a poverty cycle, this belief has held continuity with New Labour. The dependency culture is the problem that due to excessive social security benefits, most notably unemployment benefits mean that the unemployed have no incentive to return to work and become reliant upon benefits.

Excessive benefits also create a poverty cycle; this is the problem that even if people did return to work they would be marginally better, or even worse off if they remained unemployed due to excessive benefit payments.This yet means there is little incentive to work and can breed idleness. It was Norman Tebbit the Tory Chancellor who stated that the unemployed should ‘get on their bikes and look for work’.

By reducing social security benefits Thatcher implemented a free market approach as the unemployed were forced back to work due to the ‘fear of poverty’ and therefore introducing heightened competition. Under Thatcher unemployment benefits were scrapped in place for job seekers allowance. However, during the 1980’s a period of Tory dominance, crime levels nearly doubled.Tory measures have proved ineffective in reducing crime and rather than pushing people back to work they appeared to have pushed people into life of crime. Under New Labour a balance between intervening and free market policies has been struck with regard to social policy. They have held continuity with the attack on the dependency culture but have implemented an intervening approach through the New Deal, in helping people back to work, rather than forcing people back to work through the ‘fear of poverty’.

The new deal offers support and services to encourage people back to work such as literacy and IT courses and even offers childcare support. This programme has been effective in reducing unemployment levels and overall levels of crime have dropped by 25%, however 93% of crime is not cleared up due to the vast amount of crime that still goes unreported. Poverty is still a problem within Britain, particularly within inner cities, these are areas where New Labour have invested a lot of money in attempts to regenerate communities and restore a sense of social responsibility amongst the individuals living within these areas.The Liberals argue that there is a clear link between poverty and crime and by attempting to remove poverty crime levels as a result will drop. This intervening approach has seen youth crime in particular targeted as well drugs, as it is recognised by both party’s that a significant portion of crime in Britain is drug related.

In conclusion, social policy is an area where governments can have the most significant affect in attempting to relieve poverty and reduce crime levels.Education and social security are two policy areas that have had both free market approaches and intervening approaches towards them in efforts to reduce crime and poverty. Thatcher looked to use education to give a good sense of ‘right and wrong’ and discipline; whilst New Labour continued this they also introduced the ‘Head Start’ programme as a means of combating social exclusion at a young age. Social security had a free market approach under Thatcher, which had a disastrous affect on crime levels which nearly doubled during the 1980’s.New Labour continued Thatcherite free market principles but where more intervening in doing so through the establishment of the New Deal.

As a general trend crime has increased throughout the 20th century but in recent years it has fallen by 25% and petty crime has also fallen. However, crime detection still remains very low at 24% and the fear of crime high. Crime and poverty will remain a problem for governments in the future and it appears that whether or not intervening or free market approaches are used in regard to social policy crime and poverty shall always exist.

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