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Published on June 24th, 2014 | by Chris Cooper-Davies
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Labour have beaten the Tories at their own game when it comes to welfare reform

The Tories tell everyone they’re the party to vote for if you want welfare reform. They paint themselves as the kings of fairness and efficiency, mopping up a Labour mess which saw cash transfer benefits dished out like free school meals to people who didn’t need or deserve them in such a complicated way that resulted in many receiving so much they had absolutely no incentive to find work. Think what you will of the latter statement; it is not my intention here to challenge or corroborate it. I am simply writing, in light of the Labour’s welfare policy announcement last week, to dispel the Tory myth of welfare competency, because if the last four years of the coalition governance has shown us anything, it’s that the Tories are neither fair nor efficient when it comes to the welfare state, while Labour- despite criticism from both the left and right- are creating a counter welfare reform policy which looks more appetising by the day.

The coalition government have made two key welfare reforms. One was dastardly unfair, the other inefficient. First, they introduced the bedroom tax- probably the most unpopular government action since the Iraq war- which saw thousands forced to leave their family homes in the vain hope of downsizing to one and two bedroom properties which didn’t exist; thousands more struggling Britons pushed further and further towards the breadline; and thousands more evicted families forced into taxpayer funded emergency accommodation. The policy was so unpopular, so unethical, and so unfair its implementation in Scotland has completely failed.

Second, they attempted to simplify the welfare state, and thereby make it more efficient, by introducing the infamous ‘Universal Credit’. This flagship reform program, masterminded by Ian Duncan Smith, merged six individual benefits into one super benefit. It has proved so complicated and inefficient that four years on, after a botched implementation, it’s in serious trouble. The New Statesman sheds some light on why: ‘Millions of pounds have been wasted on unworkable IT, the project has been run by five different people since mid-2012, and it is surrounded by a deeply secretive culture. It is the subject of virtually open warfare across Whitehall.’

And on top of this, inefficiency and unfairness aside, leaked internal documents from the Department of Works and Pensions suggest the government’s self imposed welfare spending cap could soon be breached. The coalition’s welfare record can be summed up nicely, therefore, as inefficient, unfair and not even that economical.

What, then, is Labour’s alternative?

Last week, in the wake of the Institute of Public Policy Research (IPPR) report, The Condition of Britain, Ed Miliband announced Labour’s new radical plans for the British welfare state. Under a Labour government, he declared, job seekers allowance for 18 to 21 year olds with no qualifications will be scrapped. In their place, a ‘youth allowance’ will be granted provided claimants agree to undertake vocational training at AS level or equivalent. The new allowance will be the same as the current under-25s jobseekers allowance- £57 a week- but also means-tested so that those with a family income of more than £42,000 a year will not be entitled. As well as these ‘big changes’, Miliband also announced his party’s intention to increase Jobseeker’s Allowance from £72 to £100 a week for those who have been in work for the previous five years in order to properly reward claimants who have contributed to the system.

The policies come in response to a YouGov poll which demonstrated that 78% of Brits believe the welfare system is failing to reward people who have worked and contributed to it. They are also the natural progression from a pledge by Rachel Reeves, Shadow Secretary of State for Work and Pensions, last October that Labour will be tougher than the Torries when it comes to slashing welfare bill, but also fair.

There is no denying that the new policies fulfil Reeve’s pledge. Not only is it estimated that they will save £65 million for the treasury, they will also coerce young people into vocational education- vital for their success in the job market; ensure benefits reach young people who need them most; and, crucially, re-inject the fundamental contributory principle to the welfare system, which has gone missing- admittedly because of Labour- in recent years.

This, combined with Labour’s youth jobs guarantee, pledge to scrap the bedroom tax and to pause Universal Credit in order to make it more efficient and transparent, means they have essentially beaten the Tories at their own game. They’re being hard but fair, responding to popular demands for welfare reform, but also ensuring Britain’s most needy are supported by a strong safety net.

Of course, the real test will be whether they can pull off these radical reforms efficiently in government. Opinion is heavily split with some, such as Anne Perkins from The Guardian, doubting Ed Miliband’s suitability for the role of Prime Minster entirely. All that can be said in response to this is judge the policy on its substance, not its face. While Ed may lack the charisma of his brother and, indeed, his pre-predecessor he is formulating a dynamic response to one of the most controversial and complicated issues on the political agenda. Now, having beaten the Tories at their own game, I urge him to set the agenda himself with something a little more progressive.


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MA history student at SOAS

  • Harry Aagaard Evans

    I agree most of all with your last line. This needs to be followed up with something more progressive, but if Labour follow the IPPR line of ‘institutional change, not cash transfers’, it’s disputable whether or not any more progressive change will come. Condition of Britain took austerity as the starting point and went to lengths to ensure no more spending would be advocated. These things together make IPPR’s proposals look very comfortable for conservatives.

    IPPR recommend furthering/targeting the Work Programme and making paid work experience compulsory after 6 months for young people. The welfare reform that IPPR are recommending has a big effect on young people. Aside from the above policy, which places constraints of the freedom of young people, there is the one you mentioned about people getting more money from benefits if they have worked in the five years previously. This policy is twofold: claimants who have worked (‘put more in’) get more benefits, and they can also access ‘mortgage repayment aid’, allowing them to get some of their repayments covered by the fund. Given the statutory limits on the former, this already acts punitively towards young people who are unable to get these years of work under their belt, and already suffer for a reduced rate of JSA. In addition, young people don’t own houses, and so would not be able to take advantage of the mortgage repayment aid that’s on offer.

    With the exception of providing support for people in further education, the Condition of Britain is stunningly callous towards young people. Child benefit would also be frozen, and 16-17 year-olds would be pressed to undertake the National Citizen Service – a means of getting young people to engage in community service. In addition, a whole raft of proposals seeking to fix young offenders before it’s too late suggests that the IPPR are proposing policies that reinforce the idea that there is a ‘young person problem’. This is the kind of ‘welfare reform’ that you suggest is popular with the voters. I would imagine it is popular with the voters, but only because young people don’t tend to vote.

    On your last point, Anne Perkins is not being shallow, I don’t think. She makes the valid point that all the good will in the world is no good if you’re not in government. What’s more, Ed has a very united team behind him at the moment, but arguably that’s because nobody wants to waste their chance at election when they can afford to wait until next time. If Ed doesn’t win, he’ll probably have to resign. If he does, it will be with such a slim majority (if that) that other Labourites will be queuing up for an incumbency fight in 2020, which they stand a much better chance at securing a strong majority. This means that a Labour government, with no clear strong Blair/Brown characters, will likely be a messy and bloody one.

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