On a national scale, the shuttering of childcare services in the early days of lockdown represented an unprecedented labour transfer. When childcare services and schools shut down, collective childcare arrangements became domestic childcare arrangements.Parents with school age children had to learn how to home-school, and many were forced to keep up with their regular workload on top of new care work as children re-entered the home. Amid the government’s initial advice on visiting private homes, essential workers were hard pressed to find daily child-minding. Childcare proved to be a major blindspot for both governments across the UK, as well as governments around the world.
Over the past few months, Common Wealth has hosted a series of interviews to investigate the policy ramifications of Covid-19. Now, we’re extending that series beyond the boundaries of the virus, to focus on politics, policy, and the big ideas that are shaping our world after the pandemic.
Common Wealth spoke with Christine Berry, an author and independent researcher based in Manchester, who works on neoliberal economics and new left policy. She’s a fellow at the Next System Project and co-author of People Get Ready!, which was named one of the Guardian’s top political books of 2019.
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Josh Gabert-Doyon: I wanted to start off by asking you about the politics of childcare during Covid-19. There was this assumption from policy makers that parents would be able to work from home and handle childcare duties after schools and nurseries were closed, and that proved not really to be the case. And now we’re seeing a push for people to go back to the office without safe childcare provisions. What are you expecting to be the long-term effects of this policy approach?
Christine Berry: This is something that's close to my heart because I have a one year old, who I've just put down for his nap. I think it's going to be a massive unfolding crisis over the coming months in childcare, which is completely predictable but which policymakers don't seem by and large to be really doing anything about. Firstly, on the side of households and parents that are having to try and juggle work with childcare, without schools and nurseries necessarily being open as normal or open in a way that parents feel comfortable with or that they can access. Particularly as the furlough scheme winds up – because the government did belatedly confirm that childcare was a reason that you could be furloughed – and employers are less and less inclined to be understanding, I think there's going be a lot of people, disproportionately women, pushed out of labour market altogether. Either because employers take the opportunity to get rid of them or just because they can't access appropriate childcare and they feel that they have to give up work to look after the children or because childcare is just simply unaffordable, given all the other economic pressures that families are facing. That's one side of the coin. And then on the other side of the coin, there's also a massive crisis looming of childcare provision. A lot of nurseries are really struggling at the moment because, again, as with so many issues, it's really an intensification of issues that were already there before the crisis.
Our childcare system already wasn't working. It was already both too expensive for families, but also the financial model wasn't really sustainable for providers either. Most providers need to be full for their finances to work and but a lot of families and parents, either because they've lost their jobs or their incomes have fallen or just because they don't feel safe, are not returning their kids to nursery. That's blown a hole in a lot of nurseries' finances. Some estimates are saying that as many as one in four early years settings might not survive the year. That's going to become a self-reinforcing cycle. If settings start to close, then more people, disproportionately women and disproportionately in deprived areas, are going to be pushed out of work because they won't be able to access childcare anymore. People like NEF have been pointing this out and making very sensible proposals, things that could be done to essentially bail out the childcare sector, and to support parents. IPPR also published a paper on this right at the start of the crisis. These issues have been obvious and have been very plain to see right from the beginning, but nothing seems to be being done about them. The one thing that hasn't changed in the crisis is that childcare is still invisible. It's regarded as a private issue. It's just not a political priority.
JGD: When it comes to the types of measures that you would want to see put in place, when it comes to bolstering childcare infrastructure and instituting emergency childcare measure, what sort of policies should we be looking toward?
CB: NEF have a proposal for a childcare infrastructure fund. That proposal, in essence, is that government would step up the amount of amount of payments that they're making and the amount that they're covering of the costs of childcare providers. And in exchange for that would be conditions to try and drive up the quality of early years care. With these emergency measures of cash injections to prop up the childcare sector, what is most interesting to me about that is whether you can do it in a way that moves us towards a more sensible, basically more socialised childcare model. A model where both parents have better access to affordable or free early years childcare and where the kind of unpaid work that parents do in the home in terms of childcare is better supported. And also, that we look at ownership models in the childcare sector as well. At the moment in childcare provision, it's the classic story: it's dominated not only by private providers, but with a very, very big market share for a very small number of big nursery chains. And there are, I think, some interesting questions about whether off the back of this we should be trying to revive public provision, and also supporting cooperative provision, there are some really interesting experiments going on in cooperative childcare between parents and childcare workers. Particularly if we're in a situation where a lot of these private providers are struggling and likely to fail, rather than just a bailout, as is going on in in other parts of the economy, where government is pumping in cash in exchange for not very much. I think there are some interesting questions about whether the need for a bailout could be used as an opportunity to start thinking about ownership models and transitioning the childcare sector towards ownership models that work better for childcare workers and for parents.
JGD: You’ve written about the way that the rentier economy has been propped up during this crisis. For those who might not be familiar with that term, what’s the rentier economy and what has Covid-19 taught us about rentierism?
CB: Maybe we need to find a better term than rentier because it's not one that's pretty readily understood by a lot of people. My understanding of the term rentier is basically people who make money by virtue of owning assets rather than by working. So, the money that they make is not a reward for work or effort that they're putting in. It's just money that they make by virtue of controlling assets that other people need and that they can charge on for access to. Most obviously, that includes landlords who can charge rent, hence the term "rentier", because they own the house that you need to live in, but all kinds of other activities too. Energy companies, utility companies that have control of natural resources, or banks that control the money supply and can charge interest on loans because people need access to capital.
And I think what Covid-19 has shown us or at least what the response to Covid-19 has done is basically to intensify the pre-existing issues in the UK economy in terms of disproportionately being weighted towards rentier interests, and this is a long-standing problem that the UK economy has had, that income from wages has stagnated for many decades now. And we've seen an increase in concentration of asset ownership and the concentration of power and wealth that goes with that. The problem with the Covid-19 response is that it has basically largely insulated or shielded those wealthy, asset-owning interests from having to take a share of the cost of the crisis.
Disproportionately the cost of the crisis is being borne by low income working people, often people who may already have been in debt, and now in many cases are being pushed further into debt. Again, the most obvious example of that is rent in the private rented sector. There was a bit of a row about this a few months ago about whether rents should be suspended or frozen, and they haven't been because the view has been taken that you essentially can't ask landlords to take a hit on the rent that they're entitled to by virtue of their contracts with their tenants. The result of that is basically to say that rent is sacrosanct. Small businesses are suffering because they're losing customers because the lockdown workers are suffering because they're losing wages, even if they're lucky enough to be furloughed, they're still losing 20% of their wages, but you must still pay 100% of your rent, landlords are completely entitled to continue taking 100% of their rent through this period. If people can't pay, then rent debt is accumulated and people have to pay those arrears back at the end of the crisis. It's assumed that they will need to pay that money back.
So, what you're seeing, or what you're going to see, is really this widening of the pre-existing gap in wealth and power between people that own assets and people that don't. It will also be exacerbated by some of the economic repercussions of Covid-19. A lot of people are concerned that because house prices and property prices are falling at the moment, what you'll see is a lot of buy-to-let landlords swooping in to buy more properties, because they will have the cash to do that because they've been largely insulated from the effects of the crisis. Measures that the government have taken like this stamp duty holiday are only going to make that more likely. And then what you'll see is an even greater concentration of ownership of housing and property, more people stuck in the private rented sector, at the mercy of their landlords. And obviously in the extreme, we're facing an eviction crisis very, very soon, if nothing is done to redress that issue.
I could go on and on this, this pattern has been replicated basically, right across the economy. And I think it's going to really prolong the recession. Because what you're seeing is wealth being stacked up in the bank accounts of the asset-owning wealthy, both corporations and individuals where it's not going to be spent or invested, probably. And meanwhile, people that would be spending money into the economy - people who spend most of their incomes - are going into debt and won't be able to even pay for basic essentials. That's going to be a massive drag on demand, I think it's one of the reasons that we're not going to see this “V-shaped” bounce back that people were talking about at the start of the crisis.
JGD: Was there anything about the crisis that surprised you or changed your understanding of the rentier economy?
CB: Oh, that's an interesting question. One area where I think is slightly more complicated, at least is, is the area of banks and bank lending. Because looking at the kind of rescue packages and the recovery packages that the government has put in place, I would argue and have argued that one of the effects of that has basically been to insulate banks, as a form of rentier interest, from the effects of the crisis.
Take the small business interruption loan scheme that was introduced at the start of the crisis, one thing that a lot of people didn't understand about that was that it was underwriting loans for banks, not for businesses. If a business can't pay back the emergency loan that they took out, they still go bust, but the government then pays out to the bank, the money that they would have got from the business. So, it's a kind of indirect subsidy to banks. But I think what does make the situation a bit more complicated than that is that I don't think you can say straightforwardly well, banks aren't taking a hit because of the crisis, or they aren't paying any of the costs of the crisis, because obviously, they're also going to see a much bigger level of defaults on loans that they made before the crisis and outside of that scheme. And a lot of banks are expecting to make bigger losses and are having to set aside provisions to meet those losses. As to whether we'll be facing issues again as in 2008 with bank solvency, I think that still can't be ruled out if the recession goes on for a really long time.
With banks, I think it is a slightly more complicated picture. But what you still can say with banks is that the interventions that government has made amount to a subsidy to banks. And so, if banks would have survived the crisis anyway, without that [recovery support], then it's a subsidy. And if they wouldn't, then it's an implicit bailout. I think that it's much more subtle than 2008. And people won’t necessarily realise that that's what's going on. But if it's the case that the losses banks are taking because of the recession are so great that the only thing that's keeping them afloat is the fact that they can claim the money back from the government from all of these loans they've made during the crisis, then that is an implicit bailout.
JGD: I know that you’ve done a series of participatory workshops during lockdown. For people who aren’t familiar with participatory policymaking – what is it and why is it important to be doing participatory policymaking right now?
CB: I personally think it's super important, both on a point of principle and on a point of strategy, if you're on the left. My politics, as I think the politics of Common Wealth, are very much about democracy and based on the idea that we need to democratise the economy and particularly democratise ownership of some of these wealth creating assets that I've been talking about, that are currently monopolised by a small group of people that make a lot of money from them. If your politics are about democracy, and if you place value on the idea of democracy, both in terms of everybody having access to a fair share of society's wealth, but also having a say in decisions that affect them, then you just have to do your politics that way as well. It makes no sense to build an agenda for democracy from the top down with a small clique of lefty activists and thinkers.
This brings me on to the strategic side of things. I think that is one of the reasons why the Labour Party lost the election in 2019. By no means the only one, but I think as a movement, we didn't do enough and perhaps didn't have time to do enough to really build that politics or something that was driven from the ground up and that people felt a part of, rather than something that a bunch of politicians that they didn't really trust were promising to deliver for them from on high, which, as we saw, didn't really work and people ultimately, at least, not nearly enough people voted for. So I personally think that one of the lessons that I drew certainly from the experience of last year, is that if we believe in a politics that is at least in part of our democracy, we just have to put our money where our mouth is and try and go to the widest possible group of people that we can and to build solutions that are built by the people affected by the issues. This is somewhat more difficult to do during lockdown than maybe it was before, but I think it's really vital that we still try.
JGD: With participatory policymaking work, it really shifts our understanding of how policy is communicating, and the sort of translations that go on between the real world and policy, in drawing out the experience of people and turning it into law, or procedure. How do you approach that sort of translation?
CB: It's an interesting question. As I understand your question, it's partly about how do you combine tacit knowledge or people's experiences of systems and of using and inhabiting systems on a day to day basis with the more technical knowledge that's required all kinds of expertise that's required to design or redesign those systems that are kind of policy level? And I think, definitely that the two things aren't mutually exclusive. Often people talk about participation or democracy as if it's in opposition to the idea of expertise or control by experts. And certainly, we don't want a technocracy and I think, in large part certainly on the economy, what we've had is a technocracy for the last 30 or 40 years. But actually, I think one of the things that's interesting about the Covid-19 crisis is that it's pushing us on some of these questions or illuminating some of these questions about how we need a more intelligent relationship with expertise, actually.
Firstly, I think people need to have access to a plurality of different experts, right, because experts disagree on these technical questions. And those technical questions are always in some part political as well. So, I think part of dispersing and reducing the power that's attached to expertise – and we've seen that in the in the debate over public health Covid-19 – is the need for people to be able to interrogate and scrutinise expertise. And I think we have moved from this very crude at the start of the crisis discourse where, anyone that was questioning the decision not to lock down was being told that they were just an armchair epidemiologist that didn't know anything, and if you didn't have PhD in epidemiology, then you should just shut up. I think people realise now that it is important that the lay person is able to understand and scrutinise these debates between experts. That's part of it, but then I think also even on the most technical and the most complicated questions, there are still questions about what do people ultimately want those very technical and complicated systems to do for them? And how can you design a system that does that? Banking, again, is a good example. Banking and finances are very complicated, often, deliberately so, I think. I've done lots of policy work in the past on how you could design new forms of public and community banking that would work better. But if I was to do that work again, now, or if I had the chance to do more of that work in the future, I would definitely want to do it in ways that evolved in co-designing those new institutions, the people that are actually going to use them, right. So small businesses, the elderly people that rely more on bank branches in rural areas, what do they want their experience of interacting with that institution to be like, what isn't working about it for them at the moment? What do they need it to do for them? And I think if you do that, then also people will feel more part of those ideas and are more likely to go out and advocate for them. But also, you're more likely to build something that is actually going to do the job that you want it to do. I don't think there's any issue that's so technical, that the discussion can't be enhanced by involving people that are actually interacting with that system.
JGD: There’s been a lot of talk about government intervention during the pandemic. Some people would say that new left economic policies have been co-opted, in some ways. What’s next for new left economics as they become more mainstream? What’s next for these ideas?
CB: I guess it depends what ideas you're talking about. I think we're in a bit of a funny moment at the moment in UK politics where it's quite difficult to disentangle what's actually going on or to predict what might happen next. There's been a massive shift in the Conservative government's rhetoric over state intervention and Boris Johnson talking about being Rooseveltian and all the rest of it. But often that rhetoric, if you scratch the surface, hasn't actually been backed up by action. It took a few weeks for the IFS to work out that all the big announcements actually involved any new money, they were all just moving money around from things that had previously been planned. So, the idea that we're seeing this new era of fiscal stimulus and state interventionism is much more rhetoric than reality. That's one thing that we need to contend with. And I think it's still very possible that we're going to see essentially another round of austerity, once the immediate crisis in the government's mind starts to abate, but it probably won't be badged as such. So, we're in a different world from when the political discourse was dominated by the need for austerity, but beneath the surface, I think we're still going to see a lot of the same policies. Having said that, it is still obvious that the crisis is forcing the Conservative government to be much more interventionist than they naturally would like to be. And it is shifting that window of possibility in terms of the role of the state. But I think, in some ways, the way the left needs to respond to that is actually to have a more sophisticated understanding of what a progressive economic position would entail. And the debate needs to be not just ‘is the state intervening or not?’, ‘is the state spending?’ money or not’ but ‘who is it benefiting?’ and ‘how is it intervening and for what purpose?’.
This is why I keep banging on about rentier power or whatever better word we're going to find for this. If you actually analyse and pick apart the ways that the government has been intervening, it's exacerbating power and wealth inequalities between the asset-owning wealthy and the working poor, it's not reducing them, and oftentimes, it is essentially an implicit bailout for those interests. The 2008 bank bailouts were state intervention. State intervention in and of itself isn't necessarily progressive; the state can intervene basically to prop up an unequal and unjust status quo by subsidising already wealthy private actors. And that's not progressive. And that is what you're increasingly going to see the government doing, what you won't see it doing is challenging those concentrations of ownership and those imbalances of power. I think those are the more interesting, new economic ideas that have been developing and percolating on the left in the last few years. Those are the ones for me that we really need to focus on developing. I would say that because I was interested in them anyway. But I genuinely think that that is where this political moment has to, has to push us, if we don't want to get trapped in this sort of weird Kafkaesque debate that's not really a debate anymore about austerity. A sort of role reversal, where the Tories are saying that they're not doing austerity anymore, when actually, they are. I mean, of course, we need to challenge that, but I think it's not enough anymore just to challenge that only within its own terms.