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".

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.

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