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

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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