Penalising the poor is no way to cut the welfare bill

By Chris Williamson MP

I am grateful to my good friend Josh Eades for contributing to the debate on welfare reform when he posted his thoughts about this issue on Labourlist last week. Josh said he supported James Purnell’s welfare reforms package, but I have grave reservations. I’m not against welfare reform per se, but I believe in the universal principle and minimising means testing as far as is possible.

I agree with some of the comments in response to Josh’s article about the Beckhams receiving child benefit and Alan Sugar getting winter fuel payments. Clearly the best way to deal with cases like these is through the tax system rather than introducing a costly and parsimonious means test.

I don’t believe that penalising the poor is the way to reduce the welfare bill and I don’t believe coercion will do very much to force people into employment either. Apart from the callousness of such an approach, the fundamental flaw is that there is currently an inadequate number of vacancies for the jobless. Moreover, for many long term unemployed people, the chances of an employer offering them a job vary from extremely slim to nonexistent.

A different approach is required to assist people living in deprived circumstances to make the most of their lives, and where possible to enter the Labour market. The public sector, particularly local authorities, could and should have a massive role to play in delivering this goal. They could offer sheltered employment initiatives, with support packages built around these vulnerable would-be workers to give them the necessary skills and confidence to stand on their own two feet.

There are examples where local authorities have done just that, including collaborations with voluntary organisations to bring this about. But it needs a huge investment to scale up these schemes and to generate enough new jobs so that people can move from the intermediate labour market into permanent employment. I am sure that such an approach would go a long way to convince the public that we can create the jobs to offer hope to long term unemployed people. Surely that is better than the reforms being advocated by James Purnell, which I believe would lead to the introduction of a US style workfare programme.

The problem is this Tory Lib Dem government is engaged in an ideological blitzkrieg against public services under the cloak of deficit reduction. Local councils have been singled out for the biggest cuts and councils in the most deprived parts of the country, with higher concentrations of unemployment, are shouldering the heftiest cuts of all. Consequently, the opportunities to create intermediate jobs in this climate are virtually impossible and this is compounded by the abject failure of the government’s economic policies to grow the economy.

Without investment in public services they will continue to atrophy making it all but impossible for local authorities to develop innovative and compassionate new approaches to tackling long term unemployment. And without growth, the private sector will not be able to create the decent jobs that are so essential to the UK’s economic recovery.

So let us avoid pandering to the government’s rightwing ideological agenda, which is of course aided and abetted by sizeable sections of the print media too. Labour should continue to offer a different vision that keeps hope alive. It was Harold Wilson who once said the Labour Party is a moral crusade or it is nothing and by and large our periods in office have delivered progressive social change.

I say let us keep our nerve and argue for a better, fairer, caring country. Let us make the case for public services that contribute so much to making our society a decent place to live. Let us remind people of the massive contribution public services make to the economy through procurement of goods and services and the demand generated by public sector workers’ spending power in their local economy. Let us continue to argue that investing in our economy will strengthen rather than weaken it.

But above all, let us remember Harold Wilson’s visionary words to inspire us to offer an optimistic, benevolent alternative to the harsh, austere society being created by this Tory-Lib Dem coalition. And let us avoid blurring the dividing lines between us and the coalition on welfare reform because that will lead us down a policy cul-de-sac and end up alienating more people than it will please.