I received several emails and text messages last night from Labour activists and even a few MPs, all saying variants of the same thing – “What’s in Ed Miliband’s speech in the morning? Am I going to hate it?” The media previews of the speech, beginning early this week, has had many Labour activists dreading what Miliband might say today. This morning’s papers also give a somewhat lop-sided take on what the speech is likely to be focussed on – which may, it must be said, be due to the party’s desire to get the words “tough” and “welfare” in the same headline.
So let me set your mind at ease – Ed Miliband is not accepting the Tory narrative on welfare, quite the opposite. This is a speech about getting people to work, making sure that faith is restored in the benefits system, stopping welfare bills spiralling out of control year on year (without brutal but populist attacks on scroungers) and – perhaps most importantly – building more homes, which our most recent LabourList/Survation polling shows is popular with the public.
Lets take each of the key strands of the speech one by one:
Cap structural social security spending over three years to cover the period of each spending review
Much of the media previews of Miliband’s speech have referred to this cap, and – somewhat unhelpfully – conflated it with the Tory welfare cap. Except whilst the Tory cap is about setting a limit on welfare spending for individuals, Labour’s is about long term structural welfare spending in total. That means it actually has a chance of cutting welfare costs, rather than just on screwing the poor. For example, if Housing Benefit is meant to be X over 3 years, but after one year it’s clear that the real total will be X+£500 million, them the government would need to find ways to get the Housing Benefit Bill down, by dealing with the cost of
landlord subsidy housing.
Enable local councils to negotiate lower rents, build homes and cut housing benefit costs – rather than paying for the costs of our failure to build
It’s perverse that some (Labour) councils want to cut rent and build homes, both of which would reduce Housing Benefit costs, yet are currently restricted from doing so. Miliband is going to outline how changes could be made right now that would free up those councils to build, or bulk purchase, in a way that would actually save the taxpayer money in the long term.
Srengthen the route back to employment for parents of three and four year olds in workless households so they can get ready to come off benefits
If you can work, then you should – that’s the principle behind Labour’s compulsory jobs guarantee, so no real surprise there. It’s also the principle behind the Labour Party (clue is in the name), an argument that Ed is going to make himself today. There is going to be a particular focus on one group who often find it tough to get back to work – unemployed parents of young children. Spending on childcare for these parents could pay significant dividends if it helps reduce unemployment. There will also be talk of improving tests for disability (the party has widely acknowledged that ATOS tests have been a failure) with a move away from “dividing line” tests that exist only to determine whether or not someone receives a benefit.
Tackle low pay so that taxpayers’ aren’t left picking up a growing bill
A renewed focus on the Living Wage, a crackdown on abuse of agency workers and taking a serious look at the farcical world of “zero hours” contracts. This is like a Labour activists checklist of ideal workplace legislation, and all of it would slash the welfare bill by cutting down on taxpayer subsidy of businesses paying poverty wages. I’d expect this focus to be popular with the unions too.
Restore the principle of contribution by making people pay into the system for longer to qualify for an improved level of JSA
There’s always a catch isn’t there? Whilst I’m broadly supportive of a return to contribution in the welfare system (as I’ve outlined before – it’s our best chance of a system people have faith in, and, actually, better benefits), a system that sees young people who have never had the opportunity to work (thanks, in part, to the failures of politicians) sticks in my craw. However, as Labour is also committed to a compulsory youth job guarantee, it’s fair to say the party is taking youth unemployment seriously. But if youth unemployment didn’t fall under a Labour government, we’re going to have some very angry – and poor – young people on our hands.
On the whole though, the proposals outlined by Miliband are positive. They focus on the genuine cost of welfare (both in terms of government spending and lost potential) rather than buying into the shameful “scrounger” rhetoric of the government. And it’s another clear nod from Ed Miliband that he realises, even in straightened times, that he’s going to have to make big changes to the British economy to right the structural wrongs that have left too many languishing in dole queues, stuck in poor quality and expensive housing and trapped in poverty (even if they’re in work).
Ignore the media spin. Ed Miliband is getting tough on welfare spending, but he isn’t getting tough on those who struggle to survive on welfare thanks to persistent government failure.
And that’s an important distinction…