Miliband must be bolder than Cameron on welfare reform

The Labour leader should look to reinvent the financing of all of the major pillars of the welfare state.

Ed Miliband’s self-identification with Margaret Thatcher has caught the imagination of many.  “She was a conviction politician and I think conviction really matters”, he has said.  Specifically she was able to rise “to the scale of challenge that the country faces” and “create a project that is genuinely going to make our economy work, not just for a few people but much more widely”.

The question is which challenge he would like to solve.  It’s not industrial relations this time.  In common with other developed nations, it is first the deficit and then the debt, and at the same time keeping the welfare state working effectively.    

The difficulty for all future political leaders of the UK is that the current structure of the welfare state will inexorably sweep away any reform efforts currently on the table.  The Office for Budget Responsibility predicts that net debt will bottom out at 60 per cent in 15 years’ time, which is still very high.  It will then reach 70 per cent in 2040, over 80 per cent in 2050 and over 100 per cent in 2060.  The big drivers of that increase will be health and pensions spending.  The net debt numbers of around 35 per cent in the 1990s and 2000s seem like a different world.

Other countries are better placed.  The Australian national debt will rise to only 20 per cent of GDP by 2050.  Like the UK, Australia guarantees all citizens health cover and a secure income in retirement.  Unlike the UK, the cost of paying for the welfare state is more evenly shared between Australian citizens and the government.  Australian citizens pay for nearly a third of health care themselves.  They contribute nearly 10 per cent of their income towards private pensions.   Four in five Australian pensioners receive a targeted state pension because of their other savings.  They also work longer: Australians retire at 65 against the UK norm of 63.

Some may see such a comparison as ideological.  Others will judge that “what counts is what works”.  The “project” is how to deliver security for households within a reasonable national budget constraint.  Speaking at the Labour Party conference, Liam Byrne said given the growth in the national debt, “savings are going to have to be made and I think there will be savings that are needed on welfare spending too”.

Others may say that it is politically impossible, or at the least so difficult that it should be left to future governments.  The trouble is that it will be even harder for those future governments: two in five voters today are aged over 55, rising to 45 per cent in 2020 and further after that.  The political window of opportunity is already narrowing.

Others will say that taxation should rise to meet the fiscal gap, and certainly some extra tax increases will be needed.  But this has to be kept in proportion because taxes on workers will already rise in future years as the tax base narrows (due to an ageing population).

As Thatcher drew up her industrial relations campaign, she was able to learn from the unsuccessful efforts of both the Wilson and Heath governments. Miliband can learn from the coalition’s fiscal policies. David Cameron has sought to limit the debate on the welfare state to changes to benefits for working-age people.  As a result his reforms will not rise “to the scale of the challenge that the country faces”, as measured by the fiscal position.  Miliband’s convictions should lead him to look wider and reinvent the financing of all of the major pillars of the welfare state.

Andrew Haldenby is director of the independent think-tank Reform.  Its new research report Entitlement Reform (#entitlementreform) is available at http://www.reform.co.uk/

Labour leader Ed Miliband speaks at the CBI's annual conference on 19 November 2012. Photograph: Getty Images.
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David Osland: “Corbyn is actually Labour’s only chance”

The veteran Labour activist on the release of his new pamphlet, How to Select or Reselect Your MP, which lays out the current Labour party rules for reselecting an MP.

Veteran left-wing Labour activist David Osland, a member of the national committee of the Labour Representation Committee and a former news editor of left magazine Tribune, has written a pamphlet intended for Labour members, explaining how the process of selecting Labour MPs works.

Published by Spokesman Books next week (advance copies are available at Nottingham’s Five Leaves bookshop), the short guide, entitled “How to Select or Reselect Your MP”, is entertaining and well-written, and its introduction, which goes into reasoning for selecting a new MP and some strategy, as well as its historical appendix, make it interesting reading even for those who are not members of the Labour party. Although I am a constituency Labour party secretary (writing here in an expressly personal capacity), I am still learning the Party’s complex rulebook; I passed this new guide to a local rules-boffin member, who is an avowed Owen Smith supporter, to evaluate whether its description of procedures is accurate. “It’s actually quite a useful pamphlet,” he said, although he had a few minor quibbles.

Osland, who calls himself a “strong, but not uncritical” Corbyn supporter, carefully admonishes readers not to embark on a campaign of mass deselections, but to get involved and active in their local branches, and to think carefully about Labour’s election fortunes; safe seats might be better candidates for a reselection campaign than Labour marginals. After a weak performance by Owen Smith in last night’s Glasgow debate and a call for Jeremy Corbyn to toughen up against opponents by ex Norwich MP Ian Gibson, an old ally, this pamphlet – named after a 1981 work by ex-Tribune editor Chris Mullin, who would later go on to be a junior minister under Blai – seems incredibly timely.

I spoke to Osland on the telephone yesterday.

Why did you decide to put this pamphlet together now?

I think it’s certainly an idea that’s circulating in the Labour left, after the experience with Corbyn as leader, and the reaction of the right. It’s a debate that people have hinted at; people like Rhea Wolfson have said that we need to be having a conversation about it, and I’d like to kickstart that conversation here.

For me personally it’s been a lifelong fascination – I was politically formed in the early Eighties, when mandatory reselection was Bennite orthodoxy and I’ve never personally altered my belief in that. I accept that the situation has changed, so what the Labour left is calling for at the moment, so I see this as a sensible contribution to the debate.

I wonder why selection and reselection are such an important focus? One could ask, isn’t it better to meet with sitting MPs and see if one can persuade them?

I’m not calling for the “deselect this person, deselect that person” rhetoric that you sometimes see on Twitter; you shouldn’t deselect an MP purely because they disagree with Corbyn, in a fair-minded way, but it’s fair to ask what are guys who are found to be be beating their wives or crossing picket lines doing sitting as our MPs? Where Labour MPs publicly have threatened to leave the party, as some have been doing, perhaps they don’t value their Labour involvement.

So to you it’s very much not a broad tool, but a tool to be used a specific way, such as when an MP has engaged in misconduct?

I think you do have to take it case by case. It would be silly to deselect the lot, as some people argue.

In terms of bringing the party to the left, or reforming party democracy, what role do you think reselection plays?

It’s a basic matter of accountability, isn’t it? People are standing as Labour candidates – they should have the confidence and backing of their constituency parties.

Do you think what it means to be a Labour member has changed since Corbyn?

Of course the Labour party has changed in the past year, as anyone who was around in the Blair, Brown, Miliband era will tell you. It’s a completely transformed party.

Will there be a strong reaction to the release of this pamphlet from Corbyn’s opponents?

Because the main aim is to set out the rules as they stand, I don’t see how there can be – if you want to use the rules, this is how to go about it. I explicitly spelled out that it’s a level playing field – if your Corbyn supporting MP doesn’t meet the expectations of the constituency party, then she or he is just as subject to a challenge.

What do you think of the new spate of suspensions and exclusions of some people who have just joined the party, and of other people, including Ronnie Draper, the General Secretary of the Bakers’ Union, who have been around for many years?

It’s clear that the Labour party machinery is playing hardball in this election, right from the start, with the freeze date and in the way they set up the registered supporters scheme, with the £25 buy in – they’re doing everything they can to influence this election unfairly. Whether they will succeed is an open question – they will if they can get away with it.

I’ve been seeing comments on social media from people who seem quite disheartened on the Corbyn side, who feel that there’s a chance that Smith might win through a war of attrition.

Looks like a Corbyn win to me, but the gerrymandering is so extensive that a Smith win isn’t ruled out.

You’ve been in the party for quite a few years, do you think there are echoes of past events, like the push for Bennite candidates and the takeover from Foot by Kinnock?

I was around last time – it was dirty and nasty at times. Despite the narrative being put out by the Labour right that it was all about Militant bully boys and intimidation by the left, my experience as a young Bennite in Tower Hamlets Labour Party, a very old traditional right wing Labour party, the intimidation was going the other way. It was an ugly time – physical threats, people shaping up to each other at meetings. It was nasty. Its nasty in a different way now, in a social media way. Can you compare the two? Some foul things happened in that time – perhaps worse in terms of physical intimidation – but you didn’t have the social media.

There are people who say the Labour Party is poised for a split – here in Plymouth (where we don’t have a Labour MP), I’m seeing comments from both sides that emphasise that after this leadership election we need to unite to fight the Tories. What do you think will happen?

I really hope a split can be avoided, but we’re a long way down the road towards a split. The sheer extent of the bad blood – the fact that the right have been openly talking about it – a number of newspaper articles about them lining up backing from wealthy donors, operating separately as a parliamentary group, then they pretend that butter wouldn’t melt in their mouths, and that they’re not talking about a split. Of course they are. Can we stop the kamikazes from doing what they’re plotting to do? I don’t know, I hope so.

How would we stop them?

We can’t, can we? If they have the financial backing, if they lose this leadership contest, there’s no doubt that some will try. I’m old enough to remember the launch of the SDP, let’s not rule it out happening again.

We’ve talked mostly about the membership. But is Corbynism a strategy to win elections?

With the new electoral registration rules already introduced, the coming boundary changes, and the loss of Scotland thanks to decades of New Labour neglect, it will be uphill struggle for Labour to win in 2020 or whenever the next election is, under any leadership.

I still think Corbyn is Labour’s best chance. Any form of continuity leadership from the past would see the Midlands and north fall to Ukip in the same way Scotland fell to the SNP. Corbyn is actually Labour’s only chance.

Margaret Corvid is a writer, activist and professional dominatrix living in the south west.