Two cheers for Ed Miliband’s shift on welfare. He’s missing something, though

In a speech today at Newham Dockside, Ed Miliband will tackle head on the attempts to brand Labour the party of welfare, and will say that controlling social security spending and putting decent values at the heart of the system are "not conflicting priorities".

Ed Miliband face

In a speech today at Newham Dockside Ed Miliband will tackle head on Labour’s image as the party of welfare, saying that controlling social security spending and putting decent values at the heart of the system are “not conflicting priorities”.

Miliband will say that:

“It is only by reforming social security with the right values that we’ll be able to control costs. And it is only by controlling costs that we can sustain a decent social security system for the next generation.”

For much of the press today’s speech will be the one in which Ed Miliband got real about welfare. Up until now polls have shown that the party’s message on the subject hasn’t been hitting home, with the Tories’ “strivers vs shirkers” narrative registering with voters ahead of Ed’s more compassionate message.

Progressives shouldn’t make decisions about whether or not policy is good based on what the right-wing press say, however. They should look at the substance; which is good news for Labour, because in terms of tackling some of the long term causes of social security spending today’s speech is streets ahead of anything the Tories have yet come up with.

There is some pain, however.

Miliband’s big announcement will be that a Labour government will introduce a cap on structural security spending over three years to cover the period of each spending review:

“Today I am delivering a clear statement about One Nation Labour’s principles for social security spending: the next Labour government will use a three-year cap on structural welfare spending to help control social security costs. Such a cap will alert the next Labour government to problems coming down the track and ensure that we make policy to keep the social security budget in limits.”

This will be a tough sell to the left, but we’re now two years out from the General Election and unfortunately, however many graphs and spreadsheets we put out there showing that the welfare budget didn’t get ‘out of control’ under Labour, the impression has been allowed to stick that it did, and perception is what matters in politics.

Tying the social security budget to the spending review will also act as an incentive for Labour to make good on some of the ways it proposes to bring the bill down.

Which brings us to another thing Miliband will touch on in his speech: tackling persistent unemployment, low pay and housing shortages.

One of the reasons the social security bill is growing is the cost of housing benefit due to spiralling rents and provisions like working tax credits to top up low wages. Miliband will say in his speech that as a country we cannot afford to continue paying billions on ever-increasing rents when we should be building homes instead – a measure which would counteract rental inflation:

“Thirty years ago for every £100 pounds we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit. Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit.”

In terms of work, Miliband will pledge to enforce the minimum wage, tackle the abuse of zero hour contracts and encourage employers to pay a living wage. These are all progressive measures that go further than previous governments in tackling the root of the benefits problem rather than simply throwing money at it.

Along with the limit on overall spending, the most controversial measure inside the Labour Party will probably be the pledge to restore the contributory principle to the benefits system so that those who’ve paid into the system for a longer period of time are entitled to take more out when they are eligible – for example by claiming a higher rate of Jobseekers’ Allowance than the current £71 a week.

Miliband will also promise to strengthen the route back to work for parents of three and four year olds in workless households and limit the amount of time people can spend out of work through Labour’s compulsory jobs scheme.

No doubt this will provoke howls of derision in some quarters, but it’s time the left of the party was reminded of two things: the welfare state was originally created on a contributory basis; it is the public perception that you don’t get back from the system what you put in that is undermining the values that underpin the welfare state.

Rather than viewing this proposal as a departure from the principles of the welfare state (it’s actually the opposite), the left should spend its time working to ensure that those who haven’t contributed to the system through no fault of their own – the disabled, for example – aren’t unfairly penalised by the new measures.

There was something missing, however.

One thing which won’t be mentioned in the speech are the trade unions. This is perhaps understandable considering the effort Ed has gone to shake of the ‘Red Ed’ tag, but it’s hard to see how Labour can tackle issues such as low pay, zero hour contracts and the living wage without a drive to encourage workers to join a union.

Indeed, if the Labour Party is serious about improving standards at work, it needs to  at the very least reverse the trend of plummeting trade union membership, which is at its lowest level since the 1940s – just two million private sector employees are now members of a union. As a movement one of the things we should be asking is how we can make trade unions relevant to Polish cleaners and how we can incentivise companies to allow unions into the workplace.

Relying on the benevolence of employers may work some of the time, but if Labour is going to be a one nation party and bring the benefits bill down it has to ensure that quality jobs are available all of the time and to all of the people. Without some sort of drive to raise union membership and make unions relevant again, improving working conditions is likely to prove an uphill struggle.

17 Responses to “Two cheers for Ed Miliband’s shift on welfare. He’s missing something, though”

  1. S.r. Williams

    It annoys me that New Labour have a reputation for creating ‘benefits britain’ when they:

    *Introduced ESA

    *Drafted in Atos

    *Brought in New Deal Programmes

    *Had the benefit integrity project

    *Made it increasingly harder to claim IB and DLA.

  2. Mason Dixon, Autistic

    Apparently abandoning any intention of using reason and evidence to develop policy is considered ‘getting real about welfare’. How is it the topic of social security makes otherwise intelligent people eject their mental faculties and embrace rampant delusion?

  3. Geraint

    Really sad to see Ed Miliband betray any social democratic principles he had, just for some short term gains that will mean nothing come the election. This wont attract any new voters to Labour, it will just cause Labour traditional voters to feel betrayed by Miliband and alienated again. Ed promised to be different, yet he is becoming the same old New Labour.

  4. Felix

    “Indeed, if the Labour Party is serious about improving standards at work, it needs to at the very least reverse the trend of plummeting trade union membership”

    “The 2012 increase in union membership of 59,000 was driven by arise among private sector employees,” reports the FT

    Someone hasn’t been watching the news

  5. LB

    A median wage earner would have had a fund of 627K when they retired if their NI had been invested. The state pension costs 152K,That means they have lost 475K.

    That money is the cost of the other bits of insurance such as bereavement benefits. The rest has effectively been taxed to fund other things.

    Now what do we get? We will cap welfare spending. What’s the pension payouts? Its welfare spending.

    It’s all a ploy to set pensioners against scroungers, and in the process agree to caps on their pensions. Starting with the prudent, they will see their pensions removed. Then it will work its way down.

    Very simple reason. The true state debts are over 7 trillion. They can’t pay that.

  6. LB

    As a movement we one of the things we should be asking is how we can make trade unions relevant to Polish cleaners and how we can incentivise companies to allow unions into the workplace.

    ===============

    Really. How about controlling migration who come to work as cleaners? That way, we don’t subsidise them. Cleaners will never earn enough money to pay the 11.5K the state spends per person per year. If we ban low skilled migrants, then those on benefits have a real opportunity to get a job and off welfare.

  7. macd

    perhaps we should call it ‘poll-itics’ from now on? I’ve put a few views together about the popularity driven cult of bad leadership over at Politoons, a satire and cartoon blog at:

    http://macdunlop.wordpress.com/2013/06/03/politoons-the-more-issue-number-11-3rd-of-june-2013/

    with a portrait of Mr. Miliband as a skater boy

    “The opposition and it’s double Ed sword of truce struggles to think of something to disagree with while they discuss their flagging poll ratings…”

    cheers, macd

  8. bisousbisous

    I can’t understand the ‘Red Ed’ tag more like pale pink Ed – The last labour government distanced itself from trade unions (right wing Tony ‘Blue’ Blair) and Milliband will do the same. The labour party is no longer the left wing party it used to be – Labour is as much use as the con-dems and does not represent the average working/non-working people of the UK.

  9. bisousbisous

    Well said! Don’t forget the shambles of Tax Credits too

  10. robertcp

    Trade union membership is not plummeting. It has been very stable since the 1990s and increased this year.

  11. S.r. Williams

    The last true Labour PM was Atlee.

  12. leftfootfwd

    Chart 1.1 Trade Union membership levels in UK from 1892 to 2011” shows that the trend in TU membership since 1979 is downward: http://tuscbrent.wordpress.com/2012/09/16/there-is-power-in-a-union/

  13. John Woods

    The Trade Unions had a record of excessive stupidity during the period up to 1979 when the Winter of Discontent finally sorted out the Darwinian question as to their ability to survive. They lost, and nothing I have heard since has convinced me that they deserve to return to their former glory of beer and sandwiches at No 10.
    As for Ed’s speech, I hope he will test the efficacy of it with a public opinion poll. If he does he will find out that he is not in front of a class of Harvard students who want to know. He is in front of a population that will always be dazzled by the bling of the likes of David Cameron and Tony Blair. He needs to find a way of putting the message in simpler terms and repeating terms that people can latch onto and remember that it was him who said them.

  14. jsullivan

    This is nothing but the same centrist ‘anything to beat the Tories’ crap that gutted the Labour Party of any remaining value under Blair.

    ‘In terms of work, Miliband will pledge to enforce the minimum wage, tackle the abuse of zero hour contracts and encourage employers to pay a living wage. These are all progressive measures that go further than previous governments in tackling the root of the benefits problem rather than simply throwing money at it.’

    So this is the leader of the left in the UK announcing as policy the intent to enforce a very basic and conservative law that’s already been in place fifteen years and to ask employers very nicely to pay their employees enough to not hate their lives, well that’s some great class analysis right there.

    ‘No doubt this will provoke howls of derision in some quarters, but it’s time the left of the party was reminded of two things: the welfare state was originally created on a contributory basis; it is the public perception that you don’t get back from the system what you put in that is undermining the values that underpin the welfare state.

    Rather than viewing this proposal as a departure from the principles of the welfare state (it’s actually the opposite), the left should spend its time working to ensure that those who haven’t contributed to the system through no fault of their own – the disabled, for example – aren’t unfairly penalised by the new measures.’

    Yeah, it’s a good thing there’s no systemic youth employment across europe bought on by an unavoidable crisis of capitalism, and that huge swathes of the north’s employment base weren’t leveled and never replaced under Thatcher or it might seem you’re buying into the right’s narrative of ‘deserving’ and ‘undeserving’ poor. Us lazy shirkers just need to get off our nintendos and facebooks, get on our bikes and find some work.

    ‘Indeed, if the Labour Party is serious about improving standards at work, it needs to at the very least reverse the trend of plummeting trade union membership, which is at its lowest level since the 1940s – just two million private sector employees are now members of a union. As a movement we one of the things we should be asking is how we can make trade unions relevant to Polish cleaners and how we can incentivise companies to allow unions into the workplace.’

    If you could incentivse unions in the workplace, they wouldn’t be doing their job. And in my experience one of the main reasons union membership has declined is exactly because of the new private-sector low-skill high-turnover format of labour, people transition between jobs so frequently because of redundancy, stress and desperation that workplace class conciousness rarely has time to form, and the six months probabationary period employers have over new employees is both a hard counter against any desire to strike, and essentially forces them to scab in the event of a workplace strike. Of course, I’m sure any day now Milliband is going to announce a new raft of measures to deal with these structural working class employment problems and not continue to paint himself as a slightly wet Tory.

  15. Jim Moore

    Very true but then when was it not “New” Labour given that EM, Balls, Cooper, Bryne and Co were about from the Blairite days

  16. David Richardson

    Of course, since 1979. But you are not contradicting the figures for the period since the 90s, I see.

  17. Dave Oddie

    Cleaners will never earn enough money to pay the 11.5K the state spends per person per year you say is the cost whether they are migrants or not.

    Most cleaners earn minimum wage so would have to work a 40 hour week for about 48 weeks a year to exceed your £11.5K figure (gross wage based on £6.19 an hour).

    Where I work none of them are migrants and neither are the other support staff and I know for a fact they are on minimum wage.

    Employers pay the minimum they can. The implication of your post that cleaners would get more pay if we limited migration is ludicrous. Employers won’t pay more than they have to, to British people or anyone else.

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