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

Steve Garry
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The footie is back. Three weeks in and what have we learned so far?

Barcleys, boots and big names... the Prem is back.

Another season, another reason for making whoopee cushions and giving them to Spurs fans to cheer them up during the long winter afternoons ahead. What have we learned so far?

Big names are vital. Just ask the manager of the Man United shop. The arrival of Schneiderlin and Schweinsteiger has done wonders for the sale of repro tops and they’ve run out of letters. Benedict Cumberbatch, please join Carlisle United. They’re desperate for some extra income.

Beards are still in. The whole Prem is bristling with them, the skinniest, weediest player convinced he’s Andrea Pirlo. Even my young friend and neighbour Ed Miliband has grown a beard, according to his holiday snaps. Sign him.

Boots Not always had my best specs on, but here and abroad I detect a new form of bootee creeping in – slightly higher on the ankle, not heavy-plated as in the old days but very light, probably made from the bums of newborn babies.

Barclays Still driving me mad. Now it’s screaming from the perimeter boards that it’s “Championing the true Spirit of the Game”. What the hell does that mean? Thank God this is its last season as proud sponsor of the Prem.

Pitches Some groundsmen have clearly been on the weeds. How else can you explain the Stoke pitch suddenly having concentric circles, while Southampton and Portsmouth have acquired tartan stripes? Go easy on the mowers, chaps. Footballers find it hard enough to pass in straight lines.

Strips Have you seen the Everton third kit top? Like a cheap market-stall T-shirt, but the colour, my dears, the colour is gorgeous – it’s Thames green. Yes, the very same we painted our front door back in the Seventies. The whole street copied, then le toot middle classes everywhere.

Scott Spedding Which international team do you think he plays for? I switched on the telly to find it was rugby, heard his name and thought, goodo, must be Scotland, come on, Scotland. Turned out to be the England-France game. Hmm, must be a member of that famous Cumbrian family, the Speddings from Mirehouse, where Tennyson imagined King Arthur’s Excalibur coming out the lake. Blow me, Scott Spedding turns out to be a Frenchman. Though he only acquired French citizenship last year, having been born and bred in South Africa. What’s in a name, eh?

Footballers are just so last season. Wayne Rooney and Harry Kane can’t score. The really good ones won’t come here – all we get is the crocks, the elderly, the bench-warmers, yet still we look to them to be our saviour. Oh my God, let’s hope we sign Falcao, he’s a genius, will make all the difference, so prayed all the Man United fans. Hold on: Chelsea fans. I’ve forgotten now where he went. They seek him here, they seek him there, is he alive or on the stairs, who feckin’ cares?

John Stones of Everton – brilliant season so far, now he is a genius, the solution to all of Chelsea’s problems, the heir to John Terry, captain of England for decades. Once he gets out of short trousers and learns to tie his own laces . . .

Managers are the real interest. So refreshing to have three young British managers in the Prem – Alex Neil at Norwich (34), Eddie Howe at Bournemouth (37) and that old hand at Swansea, Garry Monk, (36). Young Master Howe looks like a ball boy. Or a tea boy.

Mourinho is, of course, the main attraction. He has given us the best start to any of his seasons on this planet. Can you ever take your eyes off him? That handsome hooded look, that sarcastic sneer, the imperious hand in the air – and in his hair – all those languages, he’s so clearly brilliant, and yet, like many clever people, often lacking in common sense. How could he come down so heavily on Eva Carneiro, his Chelsea doctor? Just because you’re losing? Yes, José has been the best fun so far – plus Chelsea’s poor start. God, please don’t let him fall out with Abramovich. José, we need you.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 27 August 2015 issue of the New Statesman, Isis and the new barbarism