In-Work Support for the App Age: Rescuing the Best Idea Labour Ever Had
Photo: Rosiestep, CC BY-SA 4.0, via Wikimedia Commons
There is a particular irony in the way British politics remembers tax credits. The scheme that lifted hundreds of thousands of children out of relative poverty is spoken of, in polite Westminster company, as a cautionary tale — a complicated machine that Universal Credit supposedly swept away. Yet stand in any warehouse in Rugby, any delivery depot in Croydon, or outside a care agency in Motherwell, and you will find precisely the workers that scheme was built to protect: people in work, working hard, and still unable to make the arithmetic of rent, transport and food add up.
The Labour Market No Longer Fits the Model
When in-work credits were designed, the archetypal low-paid worker had an employer, a payslip and reasonably predictable hours. Today, some 3.6 million people sit in the 'insecure work' category tracked by the Trades Union Congress — on zero-hours contracts, agency rosters, or app-based gig platforms where a week's earnings can swing wildly through no fault of their own.
The cruel trick of this new economy is that it has taken the risk out of the firm's balance sheet and placed it squarely on the household's. Universal Credit, with its monthly assessment cycle, was designed for a monthly salary. It punishes precisely the volatility that platform work generates. A good week of deliveries can trigger a deduction; a bad week arrives too late for the system to notice.
What the Original Designers Would Keep — and Fix
Talk to those involved in the original architecture and a consistent picture emerges. What held up was the principle: the state topping up wages so that work always pays more than idleness, delivered as a household calculation rather than an individual one. What did not hold up was the taper — the rate at which support was withdrawn — which at times clawed back as much as 96 pence in the pound, a marginal tax rate no Chancellor would dare impose on a banker.
A modernised working family credit for the gig economy would need three things the original lacked. First, assessment based on average earnings over a rolling period, smoothing the volatility that app work creates. Second, a gentler taper, so that an extra shift is never punished. Third, delivery that sits alongside — not inside — the benefits system, avoiding the sanctions culture that has made Universal Credit a byword for humiliation at the jobcentre.
The Political Prize
For Labour, this is not merely policy mechanics; it is a message. The party's traditional coalition — and its newer one, in the 'Red Wall' seats and the Scottish central belt — is disproportionately made up of insecure workers who feel that no government has spoken for them in a generation. A credit that says, plainly, 'if you work, we will make sure you can live' speaks to delivery drivers and domiciliary carers alike.
Critics will reach for the old objections: cost, complexity, the spectre of subsidising employers' wage bills. These deserve honest answers — including a companion offer on employer obligations and sectoral collective bargaining, so that top-ups are a floor, not a ceiling. But the alternative, doing nothing while the labour market atomises further, is a choice too. Britain once halved child poverty because a government decided the labour market alone would not do the job. The labour market has changed shape. The idea has not lost its force. It is waiting to be picked up.
