This article was written by Patrick Wintour, political editor, for The Guardian on Wednesday 18th June 2014 21.00 UTC
Ed Miliband will set out Labour’s first plans for cuts to the welfare system, ending out-of-work benefits for roughly 100,000 18-to-21-year-olds and replacing them with a less costly means-tested payment dependent on training.
The move is designed to symbolise Labour’s determination to reform welfare, making it more closely linked to what people pay in, as well as cutting the benefits bill.
> More closely linked to Tory policy more like. What odds on a Con-Lab coalition after the next election ? They might as well – the differences between the parties seem to have now completely vanished.
“Britain’s young people who do not have the skills they need for work should be in training, not on benefits,” the Labour leader will say. It is essential to reform welfare to bring down a “wall of scepticism” among voters who don’t believe that politicians will make the system fairer, he will argue.
> So does “reform” always have to mean “make life more difficult for those worst off” ?
Miliband’s move reflects a recognition of anger among some voters that some people are getting “something for nothing” out of the welfare system. A YouGov poll for the Institute for Public Policy Research (IPPR), the leading centre-left thinktank, published on Thursday, finds that 78% believe that the welfare system is failing to reward people who have worked and contributed to it.
> Really ? Is it supposed to be a reward ? Are these people confusing benefits with investing money in stocks and shares or something ?
The removal of jobseeker’s allowance (JSA) for those with skills below level 3 would affect seven out of 10 of the 18-to-21-year-olds currently claiming JSA, and initially save £65m.
Miliband will reveal further plans to make welfare more conditional by linking benefit payments to national insurance contributions.
Under his plans, people would only be able to claim the higher rate JSA of £71 a week after they have paid National Insurance for five years, instead of the current two. The contributory element of the welfare system has been eroded in Britain and is much smaller than in most European economies.
Labour officials said the switch in spending by abolishing JSA for young people was not designed to be punitive, but to incentivise them to train. The longer qualifying period for higher-rate JSA will mean those who qualify will be able to receive additional help worth as much as £20 to £30 a week, they added.
The Labour leader, struggling with poor personal poll ratings, will be responding to a major report by the IPPR setting out as many as 30 radical measures to rebuild public faith in politics and public institutions in an era of austerity.
Two separate polls sent further dire messages about Miliband’s personal standing, with one poll by Ipsos MORI showing a small majority of voters wanting him replaced as party leader, and another by YouGov claiming voters would be more likely to back Labour if it was led by his brother, the former foreign secretary David Miliband.
Miliband will argue that any reforming politician must deal with doubts about the ability of politics “to address the long-standing pressures on work, family and people’s sense of fair play that has been piling up for decades”.
He will admit one reason for such scepticism is that “people think the problems are huge, but they don’t believe they can be solved because of the financial problems the country faces. Many people think that in hard times, politicians’ promises are all hot air.”
But big reforms need not require big spending, he will argue. “Our country continues to confront a fiscal situation the like of which we have not seen for generations, the result of a financial crash the like of which none of us has ever seen,” he will say.
“We cannot just hope to make do and mend, and we cannot borrow and spend money to paper over the cracks.”
Writing in today’s Guardian, the IPPR’s director, Nick Pearce, goes further, saying: “Gone are the days when economic growth could generate enough resources to redistribute income without making painful choices. Even with a different economic agenda, there is little prospect of any government elected in 2015 spending its way to greater equality.”
Pearce urges Labour to reject a business as usual path in which the government “would tax a little more and cut a little less, leaving the architecture of the state untouched and the current framework of services and social security in place”.
Miliband will also back proposals for local councils to be given more control of the ballooning housing benefit budget. The report suggests the housing benefit bill will reach £25.4bn, with real terms rises expected for the next five years.
Miliband argues the IPPR report shows that even when there is no money to spend radical reform can be started in the fields of health, child care, welfare, social care and housing. But he is going to be cautious about embracing some of its specific plans drawn up over the past 18 months, including a £2bn child care package, funded through scrapping plans for a marriage tax allowance, freezing child benefit and reducing pension tax reliefs.
The report also argues that there needs to be a switch of government resources from tax transfers and credits to delivering services, something that might require abandoning the expensive target to eliminate child poverty.
It will also propose a radical devolution of power to local councils, including over housing benefit and welfare to work for the disabled. In probably the biggest proposal, the IPPR will argue that the left has to restore the contributory principle in the welfare system. Pearce argues social security for the unemployed has become a liability for social democrats. Turning the issue into a source of strategic strength will require rebuilding the reciprocity that underpins it, restoring the contributory principle and giving new life to the idea of national insurance. “Fiscal constraints should lead us away from means-tested residualisation of welfare, not further towards it”.
There is frustration among some Labour policy leaders at Miliband’s reluctance to embrace more of the report, designed to show how the left set out a redistributionist agenda in the post-crash world. It has had the support of Jon Cruddas, head of the Labour policy review.
> Well, that’s it then. Labour continue to piss all over the very people who were originally their electorate. If anyone still had any belief that they were the People’s Friend, this should finally disabuse them.
Source – Welfare News Service, 18 June 2014