Labour has angered many of its grassroots activists with last week’s policy announcements. The party’s attempt to look ‘tough on benefits, tough on the causes of benefits’ has prompted disquiet in much of their support base, and open defection from a small section of it. On Twitter, several Labour members posted photographs of their shredded membership cards in protest. The question I shall examine is: what are the implications of the proposed measures and are they really so bad?
A charge which has been levelled against the Opposition from the day they fell from power three years ago is that they are all too willing to oppose Coalition spending cuts, and yet cannot identify where they’d find the money from to reverse them. Rightly, Balls and Miliband were worried that the point, which was well laboured (no pun intended) by the Conservative party, is undermining their effort to restore public confidence in their economic policy. Labour have often enjoyed 20-point leads over right wing governments, and yet have often lost the following election due to suspicion over their financial reliability.
Furthermore, Labour’s timidity in the debate over social security has left the Conservatives with the advantage. Britain’s left-wing political party now feels that, in order to protect the support that the state gives to the unfortunate, the deprived and the disadvantaged, it must cut universal benefits that underpin the philosophy and political viability of the welfare system.
Under Labour, Child Benefit and the Winter Fuel Payment would not be paid to households with an upper Income Tax band payer. Though this will not be a hardship for such families, there are implications for fairness. Will they not resent paying into a system that was universal and will now exclude the well-off? Is our New Jerusalem not supposed to be the fruit of our common endeavour, rather than a means of whacking the rich? Is it more effective to tax progressively or impose burdensome means-testing and the resultant administration? For there are two types of benefit that were envisaged by the Beveridge Report, which outlined the eternally valid principles that should be applied. The first is universal benefits, to be paid to all, regardless of income, when an individual’s circumstances are such that they incur additional costs that society wishes to support. Disability benefit is an example of this. Secondly, there are contributory benefits, such as pensions and, as Miliband has now proposed, Job Seeker’s Allowance. A One Nation welfare policy is that the £71 a week payment is a minimum, which will be topped up according to the claimant’s National Insurance contribution history. Those who haven’t worked, or have migrated to the country, will receive less generous payments than those who have paid into the system for years. Sounds fair to me. And its a marvellous way of sneaking a long overdue rise in benefits past a welfarephobic tabloid press. If benefits had risen with earnings since 1979, JSA would be equivalent to £131 per week. It’s a national embarassment that we let our job seekers down so badly in both financial and support aspects.
The last of Miliband’s proposals regarded housing. He rightly said that a shortage of homes is the reason for sky-high housing costs and a Housing Benefit bill of £24,000,000,000. Stopping short of going public with the rent controls plan (it is an open secret within Labour that this is likely to appear in the next manifesto- I have been told as much by the Shadow Housing Minister himself, no less) Miliband intends to initiate a huge homebuilding programme. I applaud this: I have repeatedly called for the building of at least one million homes of high architectural and environmental quality, ideally as a wave of New Towns large enough to become business and employment centres in their own right. The number of problems we could solve is incredible.
And all this, together with incentives for employers to pay the Living Wage, leaves me puzzled, as a dyed-in-the-wool socialist, as to why the Labour left is so outraged. Overall, we’ve won a number of landmark policy victories, and secured concessions on our losses. To choose this time to give up on Labour- as some are doing- is to snatch defeat from the jaws of victory.