Labour and the sick note

Peter Hain on the Tories' plan to force the unemployed into work will fail. Plus the

In opposition, the Tories show they know little about dealing with the problems of poverty and worklessness that they helped create when in power. Their response to Labour's radical new approach to welfare, with its emphasis on creating skills, has been to become cheerleaders for the reactionary, discredited Wisconsin model of welfare reform, with its emphasis on unemployment and forcing all who can work into jobs.

As Gordon Brown signalled in a major speech on 26 November, employability rather than unemployment is the new challenge.

Over the past decade, huge progress has been made in reversing the Conservative legacy of entrenched unemployment, child poverty and benefit dependency, which tripled the numbers moving to Incapacity Benefit and cemented the "sick note" in the foundations of the economy.

Yet, behind the headlines of Iain Duncan Smith's much-quoted "compassion" for the poor, the Tories still believe poverty and disadvantage are self-inflicted and that the way to get the most vulnerable across the high wire from benefits to work is to remove the safety net. That is why they have latched on to the sink-or-swim philosophy inherent in Wisconsin.

From the late 1980s onwards, as governor of Wisconsin, Tommy Thompson (a Republican, and until recently a presidential hopeful) introduced a system of state-funded welfare. Over time, this meant abolishing "cash assistance" for anyone without children; lone mums with children as young as 13 weeks were forced into work; a cap was put on the benefits caseload regardless of demand; there were time limits on entitlement; and the whole system, including determining welfare eligibility, was privatised.

The result was that between 1994 and 2004, both absolute and relative child poverty increased, with disproportionate impact on black and Hispanic communities. Thousands of families with no work and no welfare were left to rely on charity. Benefit entitlement and distribution had to be taken back under state control when major contractors became plagued by fraud.

It is not surprising that the Tories would ignore the social impacts of such a policy. But behind the claims that Wisconsin reduced unemployment benefit claims to the state by 80 per cent is the fact that the private contractors used were incentivised to redirect people on to federally funded sickness benefits, which increased by roughly 40 per cent during the same period.

The actual reduction in benefit claimants was 15 per cent, a lower reduction than we have achieved in the UK in the past ten years. We have also proved that you can significantly decrease the numbers of families on benefits and still cut both absolute and relative child poverty. Indeed, that has been our motivation.

Although we have got 2.8 million more people into jobs and taken a million off benefits since 1997, there are still far too many on welfare. This is not good for them - people stuck on benefits suffer very high levels of illness and de pression, and their children underachieve. And it is certainly not good for the economy.

Our approach is driven by progressive values of full employment, opportunity for all and social justice. The old definition of full employment was measured in terms of low unemployment, which William Beveridge defined as a claimant count rate of 3 per cent or less. We have hit that every month since 2002. Our new approach defines it in terms of high employment; we aim for 80 per cent from the current 74 per cent.

To achieve that, we need to do still more to help those with disabilities, single parents and the long-term unemployed into sustainable and rewarding jobs: British benefit claimants becoming British workers in British jobs.

It means calling time on our "sick note" culture. Incapacity Benefit still accounts for more than half of the 4.5 million people of working age in Britain on an "out of work" benefit. In the past, they were in effect written off, more likely to die or retire than work again. Yet, with the right help, the majority could work, and the jobs are certainly out there for them among the 660,000 vacancies.

From next year I will replace Incapacity Benefit with a new Employment and Support Allowance. It will include a more rigorous medical assessment and place the emphasis on work, identifying what someone can do, not what they cannot. Roughly half of those who take the assessment are likely to be deemed able to work. We will require people to discuss with a personal adviser what they can do to increase their chances of getting a job when the time is right.

Rightward drift

It won't be easy: the longer people have been out of work, the more expensive, intensive and specialist is the help they need to get back into work and to make sure they can stay there. This requires considerable investment upfront and savings don't come back for some years.

Which is why David Cameron's October announcement that, at a stroke, £3bn can be found to fund tax cuts is fantasy. This is another black hole in Conservative spending plans. Pinning their colours to the mast of Wisconsin leaves the Tories' welfare policy in disarray, more slick spin than substance, and underlines their rightward drift on social policy.

Meanwhile, we have signed up more than 200 firms and organisations to our Local Employment Partnerships to help recruit the long-term disadvantaged jobless - youngsters, over-fifties, the disabled and lone parents. We will ensure they get the right training to be "job-ready". In return, employers will give them a fair shot at the job through a guaranteed interview or a work-trial.

There will be disabled people and lone parents for whom work is not an option, and I will ensure that they will be protected. But most lone parents want to work, not least because while on benefit their children are five times more likely to be in poverty, with a hugely increased risk of physical and mental illness.

Comprehensive and affordable childcare will be vital (increasingly there is provision in schools from breakfast to 6pm). We are encouraging employers to be more flexible and help employees balance work and family responsibilities. More than 80 per cent already do something towards this and our commitment to extend the right to request flexible working will boost this percentage further. We have also announced skills support for people on benefit, as there is evidence that welfare claimants frequently lack the skills to fill the jobs available.

There is a consistent vision of welfare running from Beveridge through Attlee to Gordon Brown: that a fair, prosperous and, above all, cohesive society can only be built on a system of social justice in which everyone who can work is expected to contribute to, and share in, national prosperity, while those who can't are protected.

There were times in the past century when these principles were neglected, with oppor tunities to work in effect denied to millions. Unconditional handouts, which made for a life of stunted ambition and thwarted opportunity, were a reality for too many. Neither should be acceptable to progressives in our pursuit of full employment and abolishing child poverty in our generation.

A new, progressive vision for our welfare system must be firm, fair and effective. The prescription from the right will once again be reactionary, stigmatising and self-defeating.

The dividing line between Labour and the Conservatives could not be starker.

Peter Hain is Secretary of State for Work and Pensions and for Wales

Peter Hain is a former Labour cabinet minister and was MP for Neath between 1991 and 2015 before joining the House of Lords.

This article first appeared in the 03 December 2007 issue of the New Statesman, Russia’s fragile future

André Carrilho
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"Jeremy knows he can't do the job." What now for Labour and Britain's opposition?

Senior figures from all parties discuss the way forward: a new Labour leader, a new party or something else?

In the week beginning 13 March 2017, the Scottish National Party demanded a second referendum on indepen­dence, the Chancellor tore up his Budget and George Osborne was announced as the next editor of the London Evening Standard. One fact united these seemingly disparate events: the weakness of Her Majesty’s Opposition.

When Scotland’s First Minister, Nicola Sturgeon, addressed journalists at Bute House, her Edinburgh residence, she observed that Labour’s collapse entailed an extended period of Conservative rule. Such was the apparent truth of this statement that it went unchallenged.

Twenty minutes before Prime Minister’s Questions on 15 March, the Conservatives announced the abandonment of their planned rise in National Insurance for the self-employed. Their expectation that Jeremy Corbyn would be unable to profit was fulfilled. “Faced with an open goal, Jeremy picked up a tennis racket,” one Labour MP lamented of his leader’s performance. Rather than a threat, the government regards PMQs as an opportunity.

Two days later, Osborne was announced as the next editor of the Standard. “Frankly @George_Osborne will provide more effective opposition to the government than the current Labour Party,” the paper’s co-proprietor Evgeny Lebedev tweeted. His decision to hand the post to a Conservative MP was another mark of Labour’s marginalisation. In more politically competitive times, owners are warier of overt partisanship.

The Tories have a parliamentary majority of just 15 – the smallest of any single-party government since 1974 – but they enjoy a dominance out of all proportion to this figure. Nick Clegg, the Liberal Democrat former deputy prime minister, told me: “The fundamental pendulum swing of democracy, namely that the people in power are always worried that the other lot are going to hoof them out, has stopped.”

Labour is hardly a stranger to opposition: the party governed for just 20 years of the 20th century. But never in postwar history has it appeared so feeble. By-elections are usually relished by oppositions and feared by governments. But in Copeland in the north-west of England, a seat that had not returned a Conservative since 1931, the Tories triumphed over Labour. In recent polling the governing party has led by as much as 19 points and on one occasion it was leading in every age group, every social class and every region.

Corbyn’s MPs fear that were he to lead Labour into a general election, the attack dossier assembled by the Conservatives would push support as low as 20 per cent.

When David Miliband recently said that Labour was “further from power than at any stage in my lifetime”, he was being far too generous. After the forthcoming boundary changes, it could be left with as few as 150 seats: its worst performance since 1935.

The party’s plight was both predictable and predicted – the inevitable consequence of electing a leader who, by his own admission, lacked the requisite skills. “Now we made to make sure I don’t win,” Corbyn told supporters after he made the ballot in 2015. The lifelong backbencher stood with the intention of leading debate, not leading the party.

Neil Kinnock, Labour’s leader from 1983 to 1992, told me: “From the outset, I said that Jeremy [Corbyn] just can’t do the job . . . Now I think he knows that. He’s been a member of parliament for 34 years and will have a sense of self-examination. Both he and the people who work around him know that he just can’t do the job.”

Morale in the leader’s office has seldom been lower. “They’ve got the yips,” a Lab­our aide told me. Shortly after the Tories’ Budget U-turn, Corbyn’s director of strategy and communications, Seumas Milne, asked journalists whether there would be an early general election. He produced no evidence of any hope that Labour could win it.

Yet Corbyn’s leadership alone does not explain the crisis. In the early 1980s, when Labour was similarly enfeebled (but still strong in Scotland, unlike today), the creation of the Social Democratic Party provided hope. But the mere 23 seats won by the SDP-Liberal Alliance in 1983 (on 25.4 per cent of the vote, against Labour’s 209 seats from 27.6 per cent) acts as a permanent warning to those tempted to split.

With only nine MPs, the Liberal Democrats are too weak to function as an alternative opposition, despite their accelerating recovery. The third-largest party in the House of Commons – the SNP – is an exclusively Scottish force. The hegemony of the Nats, which cost Labour 40 seats in Scotland in 2015, has encouraged forecasts of perpetual Tory rule. “I don’t think there’s any way the Labour Party in this day and age can beat the Conservatives south of the border,” Clegg said.

To many eyes, the UK is being transformed into two one-party states: an SNP-led Scotland and a Conservative-led England. “The right-wing press have coalesced around Brexit and have transformed themselves from competitors into, in effect, a political cabal, which has such a paralysing effect on the political debate,” Clegg said. “You have a consistent and homogeneous drumbeat from the Telegraph, the Express, the Mail, the Sun, and so on.”

In this new era, the greatest influence on the government is being exercised from within the Conservative Party. “Where’s the aggravation? Where’s the heat coming from? Eighty hardline Brexiteers,” Anna Soubry, the pro-European former Conservative minister, told me. “They’re a party within a party and they are calling the shots. So where else is [May’s] heat? Fifteen Conservatives – people like me and the rest of them now. So who’s winning out there?”

Soubry added: “The right wing of the party flex their muscle against the only lead Remainer in the cabinet, Philip Hammond, for no other reason than to see him off. And that’s what they’ll do. They’ll pick them off one by one. These people are ruthless, this is their life’s work, and nobody and nothing is going to get in their way.”

Theresa May’s decision to pursue a “hard Brexit” – withdrawal from the EU single market and the customs union – is partly a policy choice; there is probably no other means by which the UK can secure significant control over European immigration. But the Prime Minister’s course is also a political choice. She recognised that the Conservatives’ formidable pro-Leave faction, whose trust she had to earn, as a Remainer, would accept nothing less.

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The UK is entering the most complex negotiations it has undertaken since the end of the Second World War with the weakest opposition in living memory. Though some Tories relish an era of prolonged one-party rule, others are troubled by the democratic implications. Neil Carmichael MP, the chair of the Conservative Group for Europe, cited Disraeli’s warning: “No government can be long secure without a formidable opposition.” It was in Margaret Thatcher’s and Tony Blair’s pomp that calamitous decisions such as the poll tax and the invasion of Iraq were made. Governments that do not fear defeat frequently become their own worst enemy and, in turn, the public’s. The UK, with its unwritten constitution, its unelected upper chamber and its majoritarian voting system, is permanently vulnerable to elective dictatorships.

As they gasp at Labour’s self-destruction, politicians are assailed by Lenin’s question: “What is to be done?” Despite the baleful precedent of the SDP, some advocate a new split. In favour of following this path, they cite an increasingly promiscuous electorate, a pool of willing donors and “the 48 per cent” who voted Remain. Emmanuel Macron – the favourite to be elected president of France in May, who founded his own political movement, En Marche! – is another inspiration.

A week after the EU referendum, the Liberal Democrat leader, Tim Farron, was taken by surprise when a close ally of George Osborne approached him and suggested the creation of a new centrist party called “the Democrats” (the then chancellor had already pitched the idea to Labour MPs). “I’m all ears and I’m very positive about working with people in other parties,” Farron told me. But he said that the “most effective thing” he could do was to rebuild the Liberal Democrats.

When we spoke, Nick Clegg emphasised that “you’ve got to start with the ideas” but, strikingly, he did not dismiss the possibility of a new party. “You can have all sorts of endless, as I say, political parlour game discussions about whether you have different constellations or otherwise.”

Anna Soubry was still more positive about a new party, arguing: “If it could somehow be the voice of a moderate, sensible, forward-thinking, visionary middle way, with open minds – actually things which I’ve believed in all my life – better get on with it.”

However, Labour MPs have no desire to accept that the left’s supremacy is irreversible. But neither do they wish to challenge Corbyn. An MP distilled the new approach: “There is a strategy to give Jeremy [Corbyn] enough rope to hang himself. So it has not been about popping up in the media and criticising him in the way that colleagues did a year or so ago.” By giving him the space to fail on his own terms, rather than triggering another leadership contest, MPs hope that members will ultimately accept a change of direction.

Corbyn’s opponents acknowledge the risks of this approach.

“People are incredibly mindful of the fact that our brand is toxifying,” one told me. “As each day goes by, our plight worsens. Our position in the polls gets worse and the road back gets longer.”

Shadow cabinet ministers believe that Corbyn’s allies will never permit his departure until there is a viable successor. An increasingly influential figure is Karie Murphy, the director of the leader’s office and the partner of Unite’s general secretary, Len McCluskey. “She’s holding Jeremy in place,” I was told.

Leadership candidates require nominations from 15 per cent of Labour MPs and MEPs, a threshold that the left aims to reduce to just 5 per cent through the “McDonnell amendment” (named after the shadow chancellor, who failed to make ballot when he stood in 2007 and 2010).

Should the rule change pass at this year’s party conference – an unlikely result – the next leadership contest could feature as many as 19 candidates. Labour has no shortage of aspirant leaders: Yvette Cooper, Dan Jarvis, Clive Lewis, Lisa Nandy, Keir Starmer, Emily Thornberry, Chuka Umunna. (Rebecca Long-Bailey, the shadow business secretary and Corbynite choice, is said to believe she is “not ready” for the job.)

All are clear-sighted enough to recognise that Labour’s problems would not end with Corbyn’s departure (nor did they begin with his election as leader). The party must restore its economic credibility, recover in Scotland, or perform far better in England, and bridge the divide between liberal Remainers and conservative Leavers.

Lisa Nandy, one of those who has thought most deeply about Labour’s predicament, told me: “I do think that, for many people, not being able to have time with their families and feel secure about where the next wage packet is coming from, and hope that life is going to get better for their kids, is really pressing as a political priority now. They will vote for the political party that offers real solutions to those things.

“That’s why power is such an important unifying agenda for the Labour Party – not just through redistribution of wealth, which I think we all agree about, but actually the redistribution of power as well: giving people the tools that they need to exert control over the things that matter in their own lives,” she says.

But some Labour MPs suggest even more drastic remedial action is required. “In order to convince the public that you’ve moved on, you have to have a Clause Four-type moment,” one member told me. “Which would probably involve kicking John McDonnell out of the Labour Party or something like that.

“You have a purge. Ken Livingstone gone, maybe even Jeremy [Corbyn] gone. That’s the only way that you can persuade the public that you’re not like that.”

Political commentators often mistake cyclical developments for structural changes. After Labour’s 1992 election defeat it was sometimes said that the party would never govern again. It went on to win three successive terms for the first time in its history. In March 2005 Geoffrey Wheatcroft published his book The Strange Death of Tory England. Less than nine months later, the Conservatives elected David Cameron as leader and returned to winning ways. As the US political journalist Sean Trende has archly observed, if even the Democrats recovered “rather quickly from losing the Civil War” few defeats are unsurvivable.

From despair may spring opportunity. “It is amazing how this Brexit-Trump phase has really mobilised interest in politics,” Nick Clegg said. “It’s galvanised a lot of people . . . That will lead somewhere. If in a democracy there is a lot of energy about, it will find an outlet.”

George Eaton is political editor of the New Statesman.

This article first appeared in the 30 March 2017 issue of the New Statesman, Wanted: an opposition