Ed Miliband, a new direction and John Rentoul

By Toby Flux

The difficulty Ed Miliband is likely to face trying to drag Labour in a new direction was ably highlighted by John Rentoul’s IoS column yesterday. The bitterest of Blairites, Mr Rentoul argues that Ed Miliband has consistently chosen the wrong policy path since becoming leader and is consequently making it easy to be a Tory.

To back up this claim, Mr Rentoul cites numerous policy areas where he argues that Ed’s instincts are wrong, including housing benefit reforms; the cut to child benefit for households with a higher-rate taxpayer; the living wage; and increased student tuition fees.

On housing benefit, Mr Rentoul argues that it’s “old Labour” to oppose changes which will result in forcing the poor from their neighbourhoods, but does so apparently thinking that housing benefit is provided to only the feckless (with the unwritten expectation that his readers already believe that people on benefits are part of an underclass where not working is a life-long lifestyle choice). He argues that the policy of cutting housing benefit to those on other benefits was (New) Labour well before it was a Conservative wet dream, citing James Purnell in 2008 as support.

In this Mr Rentoul parrots the attack lines adopted by right-wing commentators such as Guido Faukes, and Tory politicians such as Sir George Young who have wasted no time in throwing Purnell’s comments (and Labour’s manifesto on the subject) back in our face.

What unites them all is the belief that it should be impossible for a person on benefits to live in housing a working person can’t afford, which on the face of it sounds both reasonable and fair. The problem however is that the sentiment ignores the fact that housing benefit isn’t a benefit paid to enrich the feckless, but a subsidy to landlords to ensure the poor – whether working or not – are able to afford sky high rents.

Part of a better solution is not to cut back on housing benefit for the working poor or those on benefits, but to offer incentives to the aspirational so that when they find work, or better paying work, they don’t lose 100% (or more) of any housing benefit they receive (in much the same way we provided a £40-a-week bonus to any lone parent going back to work.)

Mr Rentoul however is woefully out of touch with the real world of people living below his pay scale. In this world even those on middle-class salaries find it hard to live in housing they can afford, and many of them wake up each day with the nagging concern that the next bout of restructuring might leave them suddenly looking for another job. The prospect of living on £65 a week was mitigated by the safety net of housing benefit and support for mortgage interest payments. Now, at a time when unemployment is likely to rocket and remain high for many years to come, unemployment could very well mean having to take the kids out of school and join the exodus from areas with work to more affordable housing where work is scarce. Nice.

Similarly, support for universality in the payment of child benefit, even if it means a millionaire mother is entitled to it, is an important notion which Ed Miliband is right to support. While cabinet ministers, the super-rich and corporations use their money to avoid paying taxes, those who play by both the letter and sentiment of the rules and contribute at the higher rate deserve to be fully included in society. If the likes of Mr Rentoul don’t understand this, try replacing ‘Child Benefit’ with ‘state education’ or ‘the NHS’ when they make contrary arguments. (Unless of course Mr Rentoul et al really do believe that it’s OK to say “it is ridiculous for Labour to support state education and the NHS for higher taxpayers”.)

Next up is the living wage. Why not just have a policy of increasing the National Minimum Wage to living wage levels, asks Mr Rentoul rhetorically, rather than provide tax breaks to employers who opt to pay the living wage to their employees? The clue is in the word ‘national’, John. The living wage is a campaign which seeks to shame employers into recognising the higher costs of working in expensive areas, such as London. It would help transfer some of the burden of subsidising the working poor from the state (in top-up housing benefits and tax credits for instance) to employers. It’s about providing more balance between benefits and employment. It’s about providing, say, newspaper columnists’ cleaners and chidcare support the ability to get to work by train and not on buses which take twice the time but cost half as much.

Then there’s tuition fees and the muddle on the Labour frontbenches about supporting, or not supporting, a graduate tax instead. Whilst I agree that the muddle badly needs sorting out, it should be done by enthusiastically embracing a graduate tax and rejecting the New Labour dinosaurs who think it’s ok to leave graduates saddled with the debts associated with an even more entrenched market system in higher education. (Of course I assume that the argument that there’s a national social good in educating the next generation to degree level, irrespective of their parent’s income, has long been consigned to history thanks to those who have pulled up that particular ladder after they enjoyed grants to get their own degrees.)

The disincentive effects of the rapidly rising cost of higher education is already being felt in households across the country, despite being masked by ever increasing demand across the board for the university experience. The talented poor already baulk at the potential debts and some have undoubtedly decided to forego university as a result. That situation can only increase as tuition fees more and more closely reflect ‘market rates’. My niece, who looks set to be a higher-rate taxpaying lawyer in a few years time, would never have been able to have escaped her Welsh village to study law at university under such a regime, and in time it will become obvious to even Mr Rentoul that many, many more of our current schoolchildren from modest backgrounds will have their future choices determined for them, despite the waste of talent which will result.

If all this seems a little harsh on Mr Rentoul, take heart that it’s not just him I am taking aim at, it is all those in the New Labour camp who continue to fight the battles of the past who are in my sights. Having contributed to the demise of a Labour PM they despised, they apparently think it ok to undermine his replacement. There are however a couple of glaring clues which should tell them that they’re out of touch – New Labour lost the support of the public well before Gordon Brown became PM and, although they can’t bring themselves to accept it, the unequivocal New Labour candidate lost the Leadership election. We’ve all collectively moved on, and it’s not our problem that they can’t.

Labour needs to put the nasty triangulation of New Labour behind it, not least because as new NEC member Luke Akenhurst argues, it won’t work as an election strategy this time. We need to develop policies which unite all working people, even those who we ask to pay higher rates of taxes, in a vision for an aspirational and fair Britain. A Labour which has no time for the intentionally idle any more than the businessman (or cabinet minister) who thinks it’s alright to work the system to avoid paying his fair share of taxes. In short, ‘the next generation’ must be about the state being there when you need assistance (whether it’s for childcare, or housing, or a helping hand into higher education), but also that work should always pay more than not working, without starving the unemployed onto the streets.

All of these things are possible, and I sincerely hope Ed Miliband sticks to and expands on the rhetoric he used during the leadership election to build a party with mass support. Accepting that the likes of John Rentoul will be left fuming in a corner of the Independent’s offices as a consequence is a price worth paying.

Toby Flux is the editor of Labour Matters.