Fiscal or Social? the Instrumentation of ‘Make Work Pay’ Policies in the United Kingdom

Supplementing the income of low-earning households to combat perceived unemployment traps – so-called ‘make work pay’ policies - has been one of the main areas of growth in fiscal welfare in many advanced economies in recent decades. With the exception of a number of studies of Earned Income Tax Credit in the USA, however, the reasons for the choice of the instruments through which these policy aims are pursued has been subjected to only limited analysis to date. This paper reconstructs the politics of instrument choice in the make work pay policies of the United Kingdom, where one of the developed world’s most extensive systems of targeted financial transfers administered through the tax system is currently in the process of being dismantled and replaced by an extended system of in-work social assistance benefits. The paper discusses how alongside purely technical considerations of administrative feasibility and means-end efficiency the choice between fiscal and social policy instruments to make work pay has in the British case turned on considerations regarding the relative political visibility of different instruments, their likely communicative or symbolic effects and their implications for the exercise of social control by the state. In so doing the paper illuminates some tensions in supporting the working poor through fiscal welfare that have been somewhat overlooked in existing research.