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.”
19 Responses to “Alexander: Welfare reform is meaningless amidst jobless recovery”
John McArdle
“Take Time to Listen and Learn, Douglas Alexander” by Sue Marsh
6th November 2010: http://diaryofabenefitscrounger.blogspot.com/2010/11/take-time-to-listen-and-learn-douglas.html
Posted by John McArdle:
http://www.facebook.com/pages/Black-Triangle-Anti-Defamation-Campaign-In-Defence-of-Disabled-Claimants/117145668332176?v=info
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.
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
scandalousbill
Anon,
“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.
Bryonny G-H
RT @leftfootfwd: Alexander: Welfare reform is meaningless amidst jobless recovery http://bit.ly/9TaXQO