Progress | Centre-left Labour politics

A good start on welfare

A year ago, people were asking, ‘Where’s the beef?’ in Labour’s ‘One Nation’ policy agenda. While we’ve yet to be served up anything resembling a fillet steak there is certainly a sense of a some sort of protein-enriched amuse-bouche in Labour’s weekly policy announcements of late.

This morning’s offering came from Rachel Reeves on the key issue of ‘social security’. Labour is being set an almost-impossible challenge. Show it can be trusted to be ‘tough on welfare’ while simultaneously abandoning, for want of a better phrase, the third way policies of past. No doubt pieces like these from Dan Hodges celebrating the failure to accomplish the impossible are already pre-written before Reeves has even uttered a word (Come to think of it, I can’t say I even saw Hodges there this morning).

His call to ‘shut up about welfare’ could not be more misplaced. Support for a system designed to tackle the giant evils of idleness and want has taken a significant dive in the last 30 years. The latest British Attitude Survey shows support specifically for spending on the unemployed is half of what it was when Labour came to power in 1997, and a third of what it was under Margaret Thatcher, at just 12 per cent.

So, in what was a well-trailed announcement, Reeves today made it clear that Labour will put restrictions on job seeker’s allowance – namely for those without the basic skills (English, numeracy, IT) who refuse training and for immigrants who have yet to make a contribution to the system. Both are populist announcements designed to send the right signals to those, rightly or wrongly, who feel that their tax pounds are being sucked up by a swath of ‘lazy scroungers’ and ‘welfare tourists.’ To reinforce the point we heard a lot of the ‘dignity in the value of work’ and ‘the clue is in the name – Labour – the party of work.’ Those in the party who will question today’s announcement would do well to heed this. Defending the state is a delicate task.

In the detail of Reeves’ speech there were some very reassuring statements for those of us who want to get Britain working again – I think she called it ‘restoring the British promise.’ Beyond the headlines four things stood out, which hopefully we will see more of. First, we were talking about social security and not welfare; second, ‘rights and responsibility’ – a core pillar of the Blair agenda is back with a vengeance, as is, third, the pragmatism of ‘what matters is what works’; and finally there was a strong hint of power returning to local and regional governments.

Trying to reframe the debate to be one about social security rather than welfare is an important step in trying to rebuild support for a system that has broadly served our nation well until now. It also moves the debate beyond dole queues and firmly onto the issue of the working poor – not least the 1.47m part-time workers who want to work full-time, but because they can’t cost us £4.7bn in lost tax revenues. Tackling the question of how we reward work is not going to be easy but without an answer we stand no chance of tackling the cost of living crisis.

Part of that answer lies in improving enforcement on the minimum wage, incentivising businesses to pay the living wage with tax breaks, tightening the legislation on zero-hours contracts and, perhaps most interestingly, proposals to force organisations and businesses to be transparent about their wage structures. The latter is a continuing part of a narrative that doesn’t just speak to citizen power, but consumer power. It suggests a belief in the power of consumer choice can be brought to bear on businesses to make different choices that will see our economy restructured – in the same way that the FairTrade Movement has persuaded the likes of Cadbury’s to adopt the standard.

By talking about social security, Labour further entrenches the ideas of reciprocity, rights with responsibilities and not least the contributory principle. Reeves told us today she is exploring the idea that a higher rate of JSA should be paid for the first six weeks for those who have paid contributions for more than four or five years. It was one of the more radical ideas floated today. Such a move would cushion the blow for those made redundant, help them get back to work quicker, and address the fact that more of us are property-owning than when the benefits system was first created. Most importantly of all it would acknowledge how much global labour markets have moved on, becoming increasingly insecure and more vulnerable to economic shock, making a job for life a thing of the past. It would make welfare what it is supposed to be: a pillar of security in place of fear, not a lifestyle.

Third, many of the solutions trailed today may not have been radical or imaginative but they speak to some of the root causes of the issue at hand. You could class them as ‘no-brainers’. The skills assessment trailed heavily in the press may already be in operation, but, as Reeves pointed out, currently only after three years. She questions why you wouldn’t do this on day one, given that over half JSA claimants don’t even have the basic IT skills to use email so necessary for even applying for a job – and who can argue with that? Such pragmatism may not be popular with core party members, but ultimately we should learn that ideology for the sake of it never makes for good policy.

This brings me on to the failed work programme which we were told will be scrapped. In its place will be a new scheme with ‘central and local governments working together,’ so that they can be ‘integrated with locally developed enterprise and economic strategies.’

This suggests that we will see more of the Manchester/Liverpool/Leeds-style city deals with more power being devolved to the municipalities. This will mean local councils being challenged to drive their own economies forward and potentially become more responsible for their claimant population. While there was little detail on this specifically, such moves that drive competition between city-regions is far more likely to drive up the national economic output than some centrally defined over-statist intervention or ‘industrial’ white paper.

In conclusion, today’s announcement was about so much more than ‘getting tough on welfare.’ It was a strong reiteration of our values – a belief in making work pay, acknowledging that rights only come with responsibilities, and that sticking to these are the only way to successfully defend the welfare state. If this is coupled with further decentralisation to the city-regions, this is, as I said, a strong amuse-bouche for a manifesto fit for the 21st century. Bring on the main course.

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Joe Goldberg is cabinet member for finance on Haringey council and tweets @joedgoldberg

 

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Joe Goldberg

is a Labour councillor for Seven Sisters ward in Haringey

3 comments

  • It was brave to post the link to Dan Hodges, since he has valid points to make. Rachel Reeves “reforms” are timid and will not have much affect (if any) on voters. But then, what does one expect from a young, career politician?! If Labour had not lost its moral principles, it would be trying to educate the public instead of going along with the “bashing the scroungers on the dole” bandwagon. It took someone like the mature Diane Abbot on This Week to point out that most benefits go on pensions, subsidising poorly paid workers with families, disabled people, rather than that which goes on the “scroungers.” and benefit fraud which is miniscule compared with the overall budget. The facts are for all to see in the Guardian 8 Jan 14. Yes, there is always someone who is going to work the system, but why should all claimants be punished and ostracised for a very small minority? I feel deeply sad about the young people, especially North of Watford, who have little chance of a good job and are made to feel the scum of the earth. Yet the obscene gap between rich and poor, applauded by people like Mandelson, which grew under New Labour, ought to be the target for Labour politicians. But then, career politicians who are the sons and daughters of affluent middle class parents find it hard to emphasise with the “underclass.”

  • ‘…amuse-bouche, main courses, fillet steaks…’ A so-called under-class family who have a [24p tin of Tesco beans] on an un-buttered, untoasted slice of white 25p Lidl bread to share among 4 [un-toasted as no ‘lekky’ on the meter] for breakfast and again as an hors d’oeuvre for a forced-candle-lit [no electricity] dinner.

    A 2015 Manifesto inclusion [decentralisation and re-educating policies are already in place] should be closing not opening more Trussel Trust ‘freebie’ shops. In the run-up to 2015 GE Labour Policy makers should beware of falling prey to the same Toriy jackboot policies IDS has espoused these last few years. Stick to Job creation and stick to the definition of charity as being something which is given expecting nothing in return. Baked Alaska for dessert, anyone? ghu!

  • “Reeves told us today she is exploring the idea that a higher rate of JSA should be paid for the first six weeks for those who have paid contributions for more than four or five years. It was one of the more radical ideas floated today. Such a move would cushion the blow for those made redundant, help them get back to work quicker, and address the fact that more of us are property-owning than when the benefits system was first created. ”

    This is a mere gimmick. The figure being talked about (not in Reeves’ speech) was around a £20 uplift for 6 weeks. Now, while Tesco tells us “every little counts”, this is negligible for someone going from anything like an average wage job who is eligible for contributions based JSA. Those people (I was one myself 3 years ago) are rarely going to be entitled to any other benefits. The extra £20 a week wouldn’t even cover their Council Tax.

    If the contributory principle is to be revived as a key differentiator it needs to be far more generous. For those who are not likely to be eligible for support for housing costs, in particular those who are property-owning, or other benefits, the thing which would make a difference is to move more firmly towards Northern European models. This could be done by allowing employees to have a reduction in their tax or NI contributions if they take out private unemployment insurance. Premiums for unemployment insurance are relatively low – I took out a policy at the end of 2010 guaranteeing £2k a month for a year at a premium of £100 a month, a fraction of my NI.

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