Our welfare system is broken, but Labour and the Tories just trade myths

Rather than arguing about policy and practice, both parties encourage a futile debate about motivation and motive.

The first half of this parliamentary term was dominated by an economic argument that, in political terms, Labour lost. That doesn’t mean the Ed Balls's position on the deficit and debt has necessarily been the wrong one. Learned economists share the shadow chancellor’s analysis that premature austerity risks suffocating growth. Balls warned there would be a double-dip recession and there was.

But there has not been much reward for that foresight. Opinion polls show voters still inclined to accept the coalition’s explanations for missed fiscal targets and unscheduled stagnation – a derelict Labour legacy and turbulence washing in from the rest of Europe. The Tories act as if economic misfortune is a force of nature visited upon them rather than the product of their own policy misjudgement. Labour, meanwhile, are marooned between the forward-facing argument about who is best equipped to navigate through the storm and the backward-facing one about whether the storm might have been avoided.

Much of the economic argument in Westminster over the past two years has been predicated on mutually sustaining myths, one Labour and one Conservative. I mean "myth" not as in a malicious falsehood but in the sense of a moral parable that might be rooted in real world observation but whose real purpose is to galvanise tribal faith.

The Tory one is that the only feasible fiscal path immediately after the last election was the one laid out in George Osborne’s "emergency Budget" of June 2010. Any alternative, goes the story, would have led to "Greek-style" catastrophe, a flight of international investors from UK bonds, meltdown, apocalypse.

This was never true. Markets wanted certainty that there would be some determination to address the UK’s fiscal problems. But demonstration of will was what mattered, not acceleration of the austerity timetable. Osborne could have entered the Treasury and promised with the requisite level of portentous ceremony to implement Alastair Darling’s pre-election budget plans. The sky would not have fallen in.

The new Chancellor took a more aggressive path for two political reasons. First, he hoped to cast Labour as the party of reckless profligacy. Second, he wanted to get budget consolidation out of the way faster so as to fight a cash giveaway election in 2015. The first part of the plan worked; the second didn’t.

The Labour myth is that Osborne’s political gamble entirely explains why recovery turned to recession and why there is misery in Britain today. The implication in Balls’s "too far too fast" line is that somewhere in the gap between Darling’s proposed deficit reduction timetable and the one Osborne tried (and failed) to implement, was enough cash stimulus to pump vigour into the economy. There wasn’t. Darling envisaged austerity-lite; it still would have looked and tasted like austerity. It still would have hurt. It is entirely possible that the gentler gradient on Darling’s graph would have made all the difference to growth prospects but, come 2015, that will be an academic hypothesis to exercise economics students. It is not the kind of argument that persuades swing voters.

Now that the Osborne timetable is in tatters, Labour and the Tories are not as far apart on the economy as they seem. Balls has explicitly acknowledged the need for fiscal constraint and Osborne has accepted that austerity alone cannot restore growth to the economy and that investment must be brought forward. Labour are reluctant deficit hawks; the Tories are timid dabblers in Keynesian stimulus. It would be silly to suggest that there is some secret consensus emerging but it has also suited the Chancellor and his shadow to depict each other at polar extremes of an ideological spectrum when in fact they don’t. It has suited public enlightenment and intelligent debate less.

And now, with the forthcoming battle over welfare cuts, a similar pattern is emerging. The second half of the parliament will be dominated by more mythological warfare, this time over the benefits bill.

The Tory myth is that Labour is only interested in handing out money for people to sit around doing nothing; that there is no willingness to reform the welfare system. This is a subset of the fiction that Balls doesn’t intend to reduce the deficit. As senior Labour figures point out whenever they are given the opportunity, the party wants to reduce spending on out-of-work benefits and is unafraid to impose sanctions on those who refuse to take jobs when offered. That was Labour policy by the end of the last government and it is Labour policy now. (How popular it is with the party grass roots is another matter entirely.)

The Labour myth is that Conservatives are motivated entirely by the cynical urge to confiscate money from the poor and that, in cahoots with tabloid newspapers, they wilfully vilify those in receipt on benefits. That ignores the possibility that some Tories might sincerely believe that the welfare system they inherited was riddled with hypocrisies and injustices. They might believe it because it is true. It was ridiculous to funnel taxpayers' money into the pockets of rogue landlords through an unchecked housing benefit budget and it was dishonest, unfair and financially reckless to use incapacity benefit as a cash anaesthetic for people who might have been able to work if given the right training and incentives – positive and negative. (Those observations do not cease to be true just because there are greater injustices in the world and worse policy errors that should command more media/political attention.)

The welfare system is broken, not irredeemably but quite substantially. Labour knew it in office. The Tories know it now. The interesting question is what interventions are most effective in doing something about it. What works in terms of affordability and delivery of a just outcome? How should incentives be calibrated for different labour market conditions? That is not the debate we are likely to have over the next two years.

Instead we will have ever more desperate attempts by each side to force their opponents into the mythological template. Some on the Labour side will unintentionally help the Tories by denying that there is such a thing as cultural dependency on welfare and pretending that the only problem with the system is its lack of largesse. Some on the Tory side will help Labour by spraying indiscriminate spite at anyone who happens to be in receipt of state help and by appearing unmoved by the plight of Britain’s poor.

Everyone will be in favour of reform. But Labour will struggle to persuade the public that they have the courage to see it through and the Tories will struggle to convince anyone that they are compassionate enough to do it right. The argument will be about motivation and motive instead of policy and practice.

An important difference between this argument and the economic one that dominated the first half of the parliament is that the coalition parties have already spent much of their political capital. Osborne stole a march on Labour in June 2010. The Chancellor had the benefit of the doubt on his side - and the then still trusted Lib Dems cheerleading for him. The opposition was  reeling from defeat and only embarking on the process of electing a new leader. Now Ed Miliband leads a united party and has more political combat experience under his belt. 

It is, of course, quite possible for both sides to lose this argument. Labour could fail to shake off a reputation for throwing public money at people who are judged not to deserve it; the Tories could thoroughly restore their status as the party that sneers in the face of social destitution. How do we implement a social security system that provides for those in need, supports people out of work in their hunt for a job, doesn’t create perverse incentives to depend on the state for life, rewards enterprise, doesn’t stigmatise disadvantage, is fair and compassionate while also financially sustainable? To find the answer, look away from British politics now.

Goal posts stand in a children's park in the Gorton area of Manchester. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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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.