The Labour leadership’s screeching u-turn on universal benefits


Today, in a speech at Thomson Reuters, Ed Balls will announce a shift from the party away from universal benefits, saying:

“When our NHS and social care system is under such pressure, can it really remain a priority to pay the winter fuel allowance – a vital support for middle and low income pensioners – to the richest 5% of pensioners, those with incomes high enough to pay the higher or top rates of tax?

“Labour believes the winter fuel allowance provides vital support for pensioners on middle and low incomes to combat fuel poverty. That’s why we introduced it in the first place. But in tough economic times we have to make difficult choices about priorities for public spending and what the right balance is between universal and targeted support. So at a time when the public services that pensioners and others rely on are under strain, it can no longer be a priority to continue paying the winter fuel allowance to the wealthiest pensioners.”

Yet back in January, Ed Miliband told the BBC’s James Landale that “universal benefits are an important bedrock of our society”, and suggested that pensioner benefits in particular should remain akin to the NHS – free at the point of delivery.

In fact, just over a month ago, a spokesperson told me in no uncertain terms that the party still backed the principle of universalism in welfare. After many in the party expressed concern at Ed Miliband’s suggestion that Winter Fuel Allowance would be “looked at” by the policy review, I was told:

“Of course we look at all these issues but as Ed made clear twice in the interview Labour supports the Winter Fuel Allowance. Labour introduced the Winter Fuel Allowance. He made clear in his interview in January with James Landale in January that universality is “part of the bedrock” of our system. The position has not changed.”

Evidently that position has now decisively and irrevocavbly changed. So what has happened in the last month to change minds so decisively at the top of the party? A slippage in the party’s polling? The rise of UKIP? The economy? Whatever it is, they’ve decided to go harder on welfare, and junk the universal principle while they’re at it.

The calculation has evidently been made – quite correctly – that whilst many Labour supporters and activists will argue forcefully in favour of universal benefits, but they won’t go to the wall over elderly pensioners receiving a lump sum they don’t need to pay for fuel they can already afford to line the pockets of wealthy energy giants. I’ve always been a staunch believer in the principle of universality – as I think it delivers better outcomes for those who need it most, in a way that means testing doesn’t – but defending payouts for wealthy baby boomers isn’t a fight I’m invested in.

And of course, the party has already pledged action on energy companies anyway, in a bid to reduce energy bills for older people and working families alike.

Yet there’s a genuine risk that this is the start of a slippery slope when it comes to universalism. The principle of universality isn’t worth abandoning for a measly £100 million saving, even in these times of financial constraint, and nor is today’s announcement likely to solve Labour’s economic credibility problem – laid bare by our poll – in one fell swoop. The question we should be asking today, is not whether or not this is the end of universalism, but what universal benefits might be cut next, in a bid by Ed Balls to show “iron discipline” on the economy.

And of course on close inspection, there’s much more than the end of universalism in this speech – including both arguments for short term borrowing to stimulate growth and long term cuts to government budgets. But I’ll come back to that, along with some relevant polling from our exclusive series, later this week…

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