Labour should respond to Osborne's benefits cuts with a jobs guarantee

A jobs guarantee would allow Labour to defend benefits from a position that resonates with the public.

Osborne has set Labour a trap. As Rafael Behr clearly explains, either Labour supports the benefits changes that see devastating real-term cuts to the most vulnerable, or they are left arguing in the Commons in support of people on benefits, playing into the hands of the worst stereotypes of the party in terms of public spending and supporting so called "scroungers". So what to do?

The party has to be clear about one thing. Work is the best way to support people out of poverty and get the economy moving again. Labour. The clue is in the name. Talk to some members, and you would think the worst news from the Autumn Statement for poorer people were the benefit cuts. It wasn’t. The worst news for poorer people was that growth will be negative this year and stagnate for much longer than we thought. Without jobs, there is no hope.

The first point the party has rightly emphasised is that most people being hit by these benefit cuts will be in work. Ed Balls has been good at articulating this so far, breaking down the false stereotype the chancellor presents us with between "strivers" and "scroungers".

But I'm not talking about that argument, which I believe we've already won with the public. I'm talking about how we defend benefits for those who are out of work. The "strivers" who spend eight to ten hours a day applying for jobs without so much as a word back. How do we make their benefits seem fair to the working person who lives next door?

One answer - which I’m putting out for discussion rather than a definitive solution - is a jobs guarantee. If someone capable of working has been unable to find work in a year, then the state guarantees them a job and pays them at least the minimum wage. Labour shouldn't support any further erosion of benefits in parliament until that promise has been kept.

Evidence suggests that this scheme worked well under the Future Jobs Fund, which offered a six month placement to unemployed young people until the government axed it. In fact DWP’s own research showed it delivered a net benefit of £7,750 per participant. Others such as Stephen Timms and Richard Layard have researched what it would be like to extend it to all ages.

Putting this suggestion to someone in Ed’s office, they reasonably argued that it still does nothing for those people who are in work on benefits. That's true, and a devastatingly sad reality for those struggling to afford Christmas and pay their bills in the new year. But as I’ve argued before, pushing the living wage is a much better way of helping the working poor than subsidising low wage jobs through tax credits, particularly when money is tight. 

Obviously the most important reason for a jobs guarantee is that it gives people a chance to help themselves. But it also has strategic advantages. It shows that Labour is being constructive and allows us to defend benefits from a position that resonates with the public. At a time when there are so many more claimants than jobs, it shows the Conservatives up for hitting people who are desperate to find work but can't find it. And on a deeper and more fundamental level, it may even cause a rebellion among the Liberal Democrats and give them cause to side with us in the Commons, defeating the government’s present measures altogether.

Labour leader Ed Miliband and shadow chancellor Ed Balls speak at a press conference at Labour headquarters. Photograph: Getty Images.

Rowenna Davis is Labour PPC for Southampton Itchen and a councillor for Peckham

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.