John Hudson

Today’s New York Times carries a piece on the latest reforms to the US Medicare programme. They are based around the introduction of drug discount cards, ‘a 19-month stopgap measure to provide discounts of 10 percent to 25 percent for Medicare participants who have no other prescription drug coverage. In addition, low-income participants are eligible for subsidies of $600 a year’.

Several features are of note:

(1) As part of Bush’s drive to increase the marketisation of welfare services, some 73 competing plans are available ‘each providing different savings on different medications, and all subject to change’. The obvious by-product of this is - as the NYT report - confusion in the face of this complexity.

(2) In an attempt to help potential recipients manage this complexity, e-government applications have been thrust forward. The medicare website offers a tool for interrogating the different schemes. It allows medicare recipients to compare prices offered by the different programmes for their prescriptions and a similar service is available from a freephone call centre service. However, its critics - including some of the companies behind the cards - have complained that the pricing information is inaccurate - and that some schemes are absent altogether. Meanwhile, the NYT claims that:

For many retirees, it is too much.

“I’m 85, do I have to go through this nonsense?” asked Florence Daniels, a retired engineer who said she received less than $1,000 a month from Social Security, of which she paid $179 a month for supplemental medical insurance. She gets drugs through a New York State program, which provides any prescription for $20 or less. To make ends meet and afford her drugs, she said she bought used clothing and put off buying new glasses. Some of her friends travel by bus to Canada to buy drugs; others do without, she said.

Ms. Daniels did not use the government Web site to compare drug cards, in part because she cannot afford a computer. “I’m trying to absorb all the information, but it’s ridiculous,” she said. “Not just ridiculous, it’s scary. If there was a single card and it was administered by Medicare, and it got the cost of drugs down - wonderful, marvelous. But with these cards, the only thing we know is that we’ll have to pay money to other people to administer what we can get and can’t get.”

(3) In any event, the information is likely to be of limited use in some cases, for card providers are at liberty to change their prices - and the drugs they supply - at any time, while medicare recipients are only entitled to change their card once a year. As one medicare recipient told the NYT: “What if I chose one? They could drop my drugs two weeks later.” In such cases, perversely, the e-government application could do little more than inform the service user of how they are missing out: information would be far from empowering.

(4) Given this, according to the NYT report, many in need of assistance are likely to reject the plan out-of-hand, not least because better deals are often available on the internet, particularly if drugs are ordered from outside of the US.

My hometown (Sunderland) - and the North East of England more generally - has been receiving some interesting - and conflicting - coverage in the past few days.

Of particular note is the fact that Sunderland has been nominated for the title of ‘World’s Most Intelligent City’, a ‘prestigious international award’ - according to the Scotsman - that is administered by the World Teleport Association. The Sunderland Echo report that the city has reached the global shortlist of just seven cities:

because of its unprecedented success in emerging from the demise of heavy industry and establishing itself as a world leader in IT technological advancement.

As they put it (heavily paraphrasing a press release from the Regional Development Agency ONE North East):

In 1991, the city was ranked in the bottom 10 per cent of “depressed districts” after the closure of the coal mines and shipyards. Unemployment had peaked at 30 per cent. Today, thanks to developments like Doxford Park – which is now home to 8,000 workers and a range of blue chip companies – Sunderland is at the forefront of developing new technology.

Yet, just a day earlier, another of the region’s papers - The Sunday Sun - led with the headline ‘Worst Region in the Country’, reporting that:

The North is more deprived than any other region in the country, according to the most detailed study ever carried out by a British Government into the problem. Published last week, the huge survey by the Office of the Deputy Prime Minister painted a depressingly familiar picture. It concluded that the North is the most deprived area when it comes to employment, education and health. Most depressingly it found that almost a quarter of England’s most deprived areas were in the North.

The study - the Indicies of Deprivation 2004 (produced by Oxford University’s Department of Social Policy & Social Work for the ODPM) - ranked Sunderland 22nd in its list of the most deprived local authorities, with many neighbouring authorities appearing in the top 25 too. The raw data (available for download from the ODPM site) show that the rhetoric greeting Sunderland’s nomination for the ‘World’s Most Intelligent City’ is somewhat misplaced for it is still easily within the top 10% of most deprived authorities in England. Moreover, matters are worse still when we consider the vaunted regeneration of the labour market, for the city is within the top 2% of authorities with respect to employment deprivation (defined as ‘involuntary exclusion of the working age population from the world of work’).

Which is the more accurate portrayal? In his research on the ‘creative class‘, Richard Florida suggested a link between urban regeneration in US cities and their creative potential and developed a ‘creativity index’ to demonstrate this. Last year, Demos applied a simplified version of his approach to the UK’s 40 most populous cities: Sunderland came in bottom. Meanwhile, as the tables below from the North East Regional Information Partnership web site show, the skill level in the North East remains some way below the national average and it has a significantly lower proportion of its workers in the professions and senior management than the national average.

At the same time, however, Demos has suggested more recently - in its report Northern Soul - that, elsewhere in the North East:

Newcastle and Gateshead are reversing the ‘brain drain’ of graduates and professionals to the south-east. Improved quality of life, affordable houses and the cultural buzz symbolised by projects like the Baltic art gallery and the Sage music centre are all key reasons why Newcastle and Gateshead are attracting people.

Many of the problems Sunderland faces are common to its neighbours: the skills and employment tables above clearly encompass the region as a whole (or lump the three cities together as Tyne & Wear), while Newcastle came in just one place below Sunderland in the Indicies of Deprivation (23rd) and Gateshead just a few places further down the table (30th). All are well within the 10% of most deprived local authorities in England.

What we are seeing in all three cases is the difficult transition from industrial to a post-industrial/informational/knowledge economy - call it what you will - and one that poses real dangers in terms polaring the gap between those at the core of the new economy and those on its periphery. Demos’ Northern Soul report acknowledges the ‘dangers of a two-speed economy’ arguing:

Despite the shining symbols of change on the Quayside, the post-industrial transition has not been a seamless process.The reality is that Newcastle and Gateshead continue to have serious economic problems with far higher unemployment than the national average…. both Newcastle and Gateshead, in common with every core city north of London except Manchester, continue to lose population in net terms… Set against these figures are some significant gains in the new economy, in particular the creative, cultural and leisure sectors…. These apparently contradictory trends are indicative of the type of two-speed economy that is coming to characterise many post-industrial cities. In Newcastle and Gateshead, as in many other parts of the country, these trends are most clearly reflected in a polarised property market where the pattern of hot spots and cold spots is becoming pronounced.

Worryingly, new research from the USA suggests that creativity and inequality run hand-in-hand - a member of Florida’s team having found cities that rank highly on the ‘creativity index’ also display high levels of income inequality. Certainly this was one of Castells’ worries in relation to the shift to a network society:

Because of this structural divide [in the workforce] in terms of informational capacities, and because of the individualization of the reward system, in the absence of a determined public policy aimed at correcting structural trends, we have witnessed in the last 20 years a dramatic surge of inequality, social polarization, and social exclusion in the world at large, and in most countries, particularly, among advanced societies, in the USA and in the UK.

However, the key here, surely, is the phrase ‘ in the absence of a determined public policy aimed at correcting structural trends’. It seems inevitable - and, indeed, right - that once powerful industrial cities such as Sunderland and Newcastle should look to reposition themselves as ‘nodes’ in the knowledge based economy; as the Demos report notes:

In common with other formerly strong industrial centres, Newcastle and Gateshead underwent immense and traumatic change.Twenty years ago, 50 per cent of all men were employed in the four heavy industries of shipbuilding, mining, steel and engineering. Now the figure is just three per cent. As the jobs seeped away during the late 1980s and early 1990s, Newcastle and Gateshead became socially and economically depressed places to live, stripped of their former industrial identity but with little to put in its place.

However, it is vital that this economic repositioning is accompanied by clear reflection on what the implications of the new economy are for the welfare state: to think about how we ensure the transition to the knowledge based economy is an opportunity for promoting social inclusion as well as increasing prosperity. If Sunderland lands the title of ‘World’s Most Intelligent City’ - the winner will be announced on 11th June - then it needs to put still more of its considerable brain power towards devising - and advocating the need for - more robust social policies for dealing with its continuingly high levels of deprivation.

Writing in today’s Guardian, Yvette Cooper - the Social Exclusion Minister - argues that tackling social exclusion will not, alone, promote social justice and that the Blair government needs to go a step further by addressing inequality too.

This is very interesting - particularly given the lengths Blair went to to avoid recourse to the language of equality rather than inclusion when interviewed by Paxman during the 2001 General Election campaign. The Guardian interpret it as a signal that the government’s anti-poverty drive is being stepped up and report that Brown & Prescott are holding special meetings with all departments ahead of the 2004 Spending Review to ensure that their programmes will address issues surrounding poverty, social mobility & generational inequality.

A survey conducted by Amicus has found that a phenomenal 40% of UK workers have no pension provision outside of that provided by the state.

Two articles in the Guardian this week (

The Guardian published David Goodhart’s Prospect essay Discomfort of Strangers yesterday. In it he discusses what he believes to be the ‘progressive dilemma’: that solidarity and diversity conflict.

While I think there may be some truth in this, the welfare state literature certainly hints at some important weaknesses in his argument. In particular, he could learn much from a closer reading of Swedish history. Much of his argument rests on an ‘America v Sweden’ claim: diversity and minimal government or homogeneity and solidaristic social democratic government. As he puts it: ‘You can have a Swedish welfare state provided that you are a homogenous society with intensely shared values’.

While it is true that Sweden is an ethnically homogenous society it is a gross oversimplification of its history to therefore suggest its generous welfare state results from ‘intensely shared values’. Indeed, as Peter Baldwin has demonstrated the Swedish welfare state didn’t emerge from a ‘oh - we are all the same, let’s be nice to each other and share our wealth’ altruism - could politics ever be so other than in a childish imagination? - but from the same intense political bargaining and conflict found in the USA or, for that matter, anywhere else. Working class were pitted against middle class, urban against rural, industrialists againsts trade unionists, employed against self-employed.

Where Sweden differed from countries like the USA & UK - as Esping-Andersen has argued - was in the way its political institutions favoured comprise and consensus politics over adversarial winner takes all politics. A proportional voting system and a strong parliamentary system of government have allowed the progessive core to dominate the political system and produced the gradual move towards a socialist system of which the Fabians would have been proud.

Goodhart says it was Conservative MP David Willetts who first drew his attention to the progessive dilemma. If the UK had a more progessive constitutional settlement the chances are Willetts and Co would be talking of a different progressive dilemma: how to break the Lib Dem-Labour coalition’s stranglehold on power given the fact that some 2/3 of the UK electorate persistently back progessive parties at elections.

Schr