Alexander: Welfare reform is meaningless amidst jobless recovery

Douglas Alexander used his first major speech as Shadow Secretary for Work and Pensions to criticise the Coalition Government's welfare proposals - and warned Iain Duncan Smith that his reforms will be meaningless against a backdrop of £18billion in welfare cuts and a jobless recovery.

Douglas Alexander used his first major speech as Shadow Secretary for Work and Pensions to criticise the Coalition Government’s welfare proposals – and warned Iain Duncan Smith that his reforms will be meaningless against a backdrop of £18billion in welfare cuts and a jobless recovery.

With the Government due to publish its White Paper on welfare reform, Mr Alexander told an audience at the ippr in central London today that the Conservatives only offered a “partial prescription” to the problems facing the welfare system in Britain today.

He told the audience:

“The Conservative contention is that the central problem is a failure of the benefits system to reward work. By contrast, for Labour the central and most pressing problem is the inadequate provision of work itself. Put simply, for welfare to work requires there to be work.”

This week, the Chartered Institute of Personal Development’s Chief Economist said that a further 1.6 million jobs will be lost in the coming years. The Chief Economist appeared before the Treasury Select Committee on November 3, stating that 725,000 public sector jobs will be shed by 2015-16, while the private sector will lose 650.000 as a result of government austerity measures and 200,000 job losses from the VAT increase.

Mr Alexander said these warnings demonstrated a substantial risk of a “jobless recovery“.

He said:

“A welcome but too exclusive focus on the promise of a simpler benefit system tomorrow, marginalises the most pressing priority which is work today.”

He added that Iain Duncan Smith had lost too much in its negotiations with the Treasury, and said that securing his George Osborne’s support meant a “rushed acceptance of £18bn of benefit cuts” which undermine his arguments for universal credit.

Mr Alexander told the ippr:

Long term reforms are already being overwhelmed by short term cuts. And my fear is that this Government, like previous Conservative Governments, will prove much better at cutting benefits than getting people into work.

“At the root of the Government’s deficit reduction strategy is a contradiction that should worry all of us that want to see borrowing brought down. Their strategy puts all its eggs in the basket of reducing the welfare bill, at the same time as it risks increasing the dole queue.

Labour had significant historical evidence on its side in criticising the Conservative Governments on welfare, Mr Alexander said, pointing to the 1980s and 1990s as examples – which saw a threefold increase in those reliant on out of work benefits and a doubling of social security expenditure as a share of GDP.

He said that as an Opposition party, Labour must produce credible policy that faces the problems people in work face at the bottom-end of the labour market, and their quality of life issues.

He added:

“I think we need to start by recognising that welfare and work are two sides of the same coin – and in the process face up to the increasingly twin-track nature of the UK economy.

“Because whether someone is ‘better off in work’ – in terms of their quality of life as well as their standard of living – rests as much on the character of the labour market as the operation of the welfare system.”

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19 Responses to “Alexander: Welfare reform is meaningless amidst jobless recovery”

  1. Hazico_Jo

    RT @leftfootfwd: Welfare reform meaningless amidst jobless recovery @DAlexanderMP says writes @Liamrthompson on @Le …

  2. Norvik_1602

    RT @leftfootfwd: Welfare reform meaningless amidst jobless recovery @DAlexanderMP says writes @Liamrthompson on @Le …

  3. Wendy Maddox

    RT @leftfootfwd: Welfare reform meaningless amidst jobless recovery @DAlexanderMP says writes @Liamrthompson on @Le …

  4. Rosanna

    RT @leftfootfwd: Welfare reform meaningless amidst jobless recovery @DAlexanderMP says writes @Liamrthompson on @Le …

  5. Mr. Sensible

    All this about a so called ‘Work Program’ is quite meaningless when jobs are going.

  6. Siobhan McAlister

    RT @leftfootfwd: Alexander: Welfare reform is meaningless amidst jobless recovery

  7. Pete G Drake

    Alexander: Welfare reform is meaningless amidst jobless recovery …: This week, the Chartered Institute of Pers…

  8. jeff_h

    Hopefully they’ll cut red tape for small business, that should create a few jobs, though we’ll need 200 thousand new jobs a year just to employ new arrivals to the country.

  9. merthyr_bill

    I don’t know many people round here have got a job. What’s the point? Why don’t we leave it to the Poles who seem to like it? In the meantime you can’t let people starve so any cut to benefits is just evil Tories making the poor suffer – as usual.

  10. Carolyn Anderson

    RT @leftfootfwd: Alexander: Welfare reform is meaningless amidst jobless recovery

  11. Anon E Mouse

    Mr.Sensible – Unemployment has fallen since the new government took over. Stop panicking about job losses – nothing has happened yet.

    This is supposed to be an EVIDENCE based blog – not one based on weak panic merchant SPECULATION.

    Just relax big fella – the world isn’t coming to an end.

    My advice is to join the Lib Dems and get on the side that’s winning before it’s too late.

  12. Anon E Mouse

    merthyr_bill – Since it was your party that flooded the country with Poles why are you complaining?

    Other sensible EU countries staged migrant entry. Those of us that said that was a good idea (which it was) were called racists by the likes of Harriet Harman.

    You wanted a Labour government – you got one – now stop bit bitching and get on with it

  13. scandalousbill

    “nothing has happened yet”??
    I think you are too intelligent an individual not to recognize the fact that the blurring of the distinction between full time and part time jobs did have a pronounced and upward impact on the most recent employment figures. Moreover, whether the recipients are Poles, Dutch, German or whoever, I think you will agree that they contribute to national consumer spending.

    I also think you would agree that the monies spent, whether rightly or wrongly, by the previous government, provided a significant amount of liquidity circulation within the national UK economy. (There is no shortage of economists who will argue that those in lower tiers spend a tremendously higher proportion of their income, however obtained, on goods and services, as opposed to savings or investments, etc. observed in higher tiers). You may also agree that the lower income groups will be the most severely impacted by Coalition cutbacks. This loss in spending power directly impacts the “real economy” and is separate from, but is cumulative to, the losses ensued by the CSR announced 500K public service job losses and their ensuing private sector repercussions, (an additional 500K estimate I would say is conservative).

    I think you can see that this is a double whammy effect upon domestic consumer spending and money circulation. I find it difficult to argue that these coalition initiatives would not make the UK economy even more susceptible to fluctuations in the Global market. Whether one considers the US/China currency confrontation, the very real spectre of US and other nations protectionism, further Eurozone meltdowns, etc., it would seem that the UK’s options to avoid adverse impacts from such risks, is now more limited than ever.
    The Coalition has countered with their notion of a jobs-a-plenty, business led growth. However the OBR has lowered its original estimation, Sir Green has announced a fresh closure of 300 of his retail outlets and the construction industry, major supplier of the recent GDP increase foresees a major sag in future bookings. A number of international bodies, members of the BoE MPC, including Marvellous Merv and others have raised increasing concern regarding achievement of the projected figures.
    In light of your point that this is an evidence based blog, could you kindly outline the indicators you feel will contribute to the prosperity and growth envisaged by the coalition government.

  14. Bryonny G-H

    RT @leftfootfwd: Alexander: Welfare reform is meaningless amidst jobless recovery

  15. Useless New Labour, the Tories And Workfare. « ModernityBlog

    […] Update 4: Left Foot Forward is uncritically pushing Douglas Alexander’s guff. […]

  16. Anon E Mouse

    scandalousbill – The statistics on employment are the statistics and I happen to agree with the government that the private sector will provide enough jobs to take up the (future) losses but as it stands there has not been a single job lost – in fact the unemployment figures show less unemployment.

    Yes the Poles etc do contribute to our economy in “consumer spending” but they also send money out of the country which is understandable but more importantly they take a job that a British worker could do.

    No I’m not starting a Gordon Brown “British jobs for British workers” rant but I do think that unemployed Brits should be forced to do the jobs regardless of whether they want to or not. If there is a job available and they are qualified then they should either take the job or lose benefits.

    I agree that government spending does filter into the economy but it has to be on real jobs – not the types listed in the Guardian like “Fruit and Veg Outreach Coordinators” and that type of thing.

    But on my central point of “British Jobs” we would have had 130K more from Poles in the first three months.

    I just think that with the Labour Party about to implement cuts “More savage than Thatcher” (Alistair Darling) and Housing Benefit cuts the same as those by the coalition (Ed Miliband) then why complain all the time?

    Those institutions that say we have taken the wrong course as a country are wrong – there was never going to be a “Double Dip” recession and people just need to relax and stop the doom and gloom panic stuff.

    We are where we are. The finances are wrecked (which always happens under Labour governments) (Lyam Byrne) and if I did know what would contribute to the prosperity and growth I’d take shares in it.

    But I’m not forwarding the opinion that it’s all bad news – you are. So perhaps you’d like to give me EVIDENCE that the coalition government is wrong…

  17. scandalousbill


    While it is perhaps too early to provide evidence that the Coalition economic policy is wrong, as you request, if you look at the FT coverage regarding the low yields projected for the Gilts, I think it would be difficult to say that the markets have provided a ringing endorsment of the Coalitions economic policies. As these are forward looking over the next few years, none of these assessment can realistically be attributed to Labour. I think further evidence will emerge in the coming few quarters, as the coalition policies take effect and feed into the economy.

    While I might agree that a double dip recession is not a high risk, assuming no global economic adversity, the likelihood of the UK GDP flat lining, in a similar scenario to recent Japanese stagnation, is still quite high. This is the risk of Coalition policies, and indeed, the buck stops there should these events transpire.
    I do not feel that the fact that EU Nationals working in the UK has been a net negative development as their reciprocity measure in place by treaty, Where I feel a major concern for a domestic UK negative impact is in the area of Inter Company Transfers. And I think you must agree that this policy has received a most enthusiastic endorsement from the coalition government, from Cameron to Cable. This link can perhaps give you some background on this problem.

  18. Anon E Mouse

    scandalousbill – I have close friends who are German and I come from half immigrant stock myself and I agree Cameron is a Euro-phile. He always has been and I believe he’s probably to the left of Clegg ironically.

    Apart from the fact the Tories would have torn him to pieces for the election result, he seemed all too quick to set up the coalition and personally, even as a supporter now of Nick Clegg, I think he should have run a minority Tory administration.

    My point is the simplistic one that if you import people to do the jobs the indigenous population don’t want to do, then they won’t do them. Also I feel that if people were made to work then the work ethic would kick in and they would actually enjoy it. I certainly love working, it’s part of life.

    In times of low vacancies I agree it is a hard call but the government can only play the hand it has been dealt which is not a good one.

    I do agree with a lot of your comments as well – I very often play devils advocate in this blog. Tell you what though, if Labour keep this opposing everything for opposition’s sake the British people will give them a kicking at the next election.

    I look at the fairness test and a lot of the things Labour are opposing seem eminently fair to me…

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