“The crisis has worsened poverty and inequality”

The people bearing the brunt of the crisis are those who were already disadvantaged before, says Robert Urbé Photo: Andrés Lejona/Maison Moderne

The people bearing the brunt of the crisis are those who were already disadvantaged before, says Robert Urbé Photo: Andrés Lejona/Maison Moderne

We have not yet learned the right lessons from the pandemic, says former Caritas president Robert Urbé, warning of rising inequalities and political leaders who fail to take decisive action.

Since 2007, Caritas has published the annual “Sozialalmanach”, or social almanach, which aims to serve as a basis for dialogue with policy makers, civil society and the business world. The theme of this year’s 15th edition is centred around the issue of social development in Luxembourg: "Wéi ee Lëtzebuerg fir muer? Raus aus der Kris--mee wouhin?" (Which Luxembourg for tomorrow? Out of the crisis--but where to?).

Urbé, the former president of Caritas Luxembourg’s board, oversees the publication of the almanach and works within the charity’s political monitoring service.

In view of the Covid context, did the theme of ‘Luxembourg of tomorrow’ impose itself?

Robert Urbé: The central theme is almost always self-evident. Some say that the post-covid world will be different, others say the opposite. We thought that we should take this opportunity to reflect on how we really want to live in the Luxembourg of tomorrow. What are the lessons to be learned from the crisis? What could lead us to a better world?

Have we learned the right lessons from the crisis?

I don't think so. Not yet. We are still too much in 'crisis management' mode. Maybe we will be in the next few months, but for the moment we are not there yet.

Since your retirement, you continue to work in the social and political monitoring service of Caritas Luxembourg. How does this operate?

We follow what is happening in politics: bills, speeches, parliamentary questions, etc. We analyse whether it is going in the right direction, i.e. not against vulnerable people. We issue opinions on bills with proposals on what needs to be changed or improved. In recent years, very few things have been changed as a result of our advice. On the other hand, we have had some small successes. We have put our finger on a sore spot and the relevant minister has recognised that there is a problem and has reacted.

Where is the urgency to act now?

The people who have had to take the brunt are those who were already vulnerable before the crisis. The crisis has worsened poverty and inequality, especially for single parents, families with children and young people at school. Those who already had problems before the crisis have even more problems now and have suffered further deterioration. Urgent action should be taken, for example in schools, in terms of catching up. It is so inadequate.

It is time to start presenting something more substantial and more profound. Just announcing catching up in languages or mathematics is not enough. There are many children who have gaps in other areas. Part of the holidays should be used to fill in the gaps of the past months. Maybe the government is preparing something... What was done last year, in any case, was not enough.

Speaking of single-parent families, the announced tax reform has been postponed because of the pandemic. What should be done at the tax level to help the most vulnerable?

According to Caritas, it should make no difference for tax purposes whether someone lives alone, cohabits, is in a civil partnership or is married. It is important to consider whether there are children in the household or not. In order to benefit from a tax class 2, which is more advantageous than tax class 1, the differentiation criterion should be whether or not there are children in the household. This would be feasible without major changes. The government's plan to implement this individualisation of taxes without anyone losing anything is squaring the circle. Impossible to achieve.

Everything the government has done so far is going in the right direction. But it is not enough, and it will take too long.
Robert Urbé

Robert UrbéFormer chairman of the board of Caritas Luxembourg

Moreover, the government risks sitting on the matter for years. Instead of waiting for a big reform that won't happen, it would be better to ease the tax burden for single parents. If it is too difficult to change tax classes, it would be better--and even faster--to increase the existing single-parent tax credit.

A major priority at national level is housing. How can we improve the affordable housing situation? 

Everything the government has done so far is going in the right direction. But it's not enough, and it will take too long. What has been presented is not enough. There are two points to be addressed. The public developers will not succeed in filling the existing gaps. The national low-cost housing corporation [SNHBM, editor’s note] has already tripled the number of properties built. At the current rate, it will take about 30 years to close the gap between the number of households waiting and the number of available houses.

According to our calculations, there is a shortfall of some 30,000 homes. With 500 new dwellings per year, you can see that this is not progressing quickly. Private initiatives must be included. I don't think that anything suitable has been proposed that would interest private developers.

A second point is that we know very well that a lot of housing is empty, that there are building plots that are not built on. All this is due to speculation. There are only two possible solutions: one would be a tax against speculation. This could be a property tax. Knowing also that this could drag on for too long, there needs to be an equally substantial tax credit to encourage people to put their property, housing or building land, on the market; another solution would be to define the housing shortage as a matter of public goods.

Some people should be threatened with expropriation if they do not put their property on the market. But there is a lot of resistance to both measures. Politicians are reluctant to act in an interventionist way on this housing market, as it is called. In my opinion, it is not a market at all. Those on the supply side are too powerful and can do as they please. That is why it is the duty of the state to intervene in this 'market'.

The figures show that the risk of poverty and social exclusion in Luxembourg is increasing. How can we stop this growth?

This has been the case for several years. Since about 2005, you can see that poverty has been increasing year by year. There was maybe two or three times a small decrease but then it started to increase again. In our view, there are a few obvious reasons for this. To counteract poverty, the state has introduced instruments such as the Revis [social inclusion income] , formerly the RMG [guaranteed minimum income] , the cost-of-living allowance or the family allowance. Since 2006, family allowances have not been adapted to the evolution of prices, so families with children have seen their income fall.

If we played with the instruments we have, we could very well reduce poverty, without inventing anything new.
Robert Urbé

Robert UrbéFormer president of the board of directors of Caritas Luxembourg

The same goes for the cost of living allowance. It has now been increased by 10%, but had not been increased since 2009. The Revis, which was introduced in 2019, did not increase its amount either. It is well known that a large proportion of Revis recipients remain in poverty because the sum isn’t high enough. If we played with the instruments available to us, we could very well reduce poverty, without inventing anything new.

As far as Revis is concerned, a large proportion of the population entitled to it does not apply for it. Sometimes these people are also entitled to a top-up of €100 but feel that the administrative steps are not worth it for such a small amount. Others feel that the process is too complicated and that the state's intrusion into their privacy is too great. We haven't done an analysis of the percentage of non-take-up since 2007. We don't know if it is still the same percentage. But in 2007, almost 70% of households that were entitled to claim the RMG did not do so. This is huge!

The same applies to the rent subsidy, where the ministry had calculated that 35,000 households could apply for this assistance. In reality, less than 10,000 applied for it, so less than a third. This is due to the spread of information, but also to the administrative process that has to be followed. Someone who is entitled to Revis is also automatically entitled to the cost-of-living allowance and the rent subsidy. But they have to take three different steps. Why not make it easier for them to apply and get all three amounts directly?

When you bring these problems to the attention of politicians, for example with the Sozialalmanach, what feedback do you get?

In general, we are told that it is an interesting read. One or another idea ends up in policies a few years later. For a lot of the ideas, we are told that it is either too difficult or impossible to implement, using far-fetched arguments. One question concerns abuse, for example. Will there be abuse? But there will always be abuses; we know that very well! Recently, there was talk of two MPs who had managed to obtain political leave in addition to their MPs' allowances. Is there abuse or not? I don't know and I'm not going to say. But questions of abuse exist everywhere. For a small percentage of people who abuse, we should not punish everyone. We have to be more reasonable.

Which political party do you think is most committed to social causes in the grand duchy?

If I take the parties that could enter government--the three that are in power plus the CSV--in these four parties there are a handful of people who fight for social issues, and there are no big differences between them. No party says: “We don't care about poverty.” In terms of zeal to fight poverty, there may be differences, but no party is very good at it. In all four parties, there are people to work with. But there is no party that, if it were to govern alone, would give us the feeling of victory.

So it is more a question of people than of political parties. Is there a consensus at government level to take poverty into account?

On some points, there is a consensus in politics, at least for a large part of the politicians. I think that the question of conducting development cooperation policy where Luxembourg spends 1% of its gross national product on development is unanimously agreed between the four parties mentioned. On the social level, there are also such common convictions.

The question is always how far you are prepared to go. If you take measures on taxes for homeowners, you run the risk of upsetting part of your electorate.
Robert Urbé

Robert Urbéformer president of the board of Caritas Luxembourg

The question is always how far you are prepared to go. If you take measures on taxes for homeowners, you run the risk of upsetting part of your electorate. This is why some politicians are more cautious about some solutions than others. To say that they are not interested in poverty is going too far. In recent years, every government has spent time on this issue, even if they have not succeeded in solving it. Even though I have just explained that poverty has increased since 2005, it cannot be said that there was less poverty before 2013, when the CSV was in government. All parties could have done better, but all parties did something anyway.

This article was first published in French in the August/September issue of Paperjam magazine and on Paperjam.lu. It has been translated and edited for Delano.