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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