How Labour can offer something for something on welfare

A two-tier system of benefits for job seekers, with higher entitlements for those with strong work records, could be funded by reducing spending on mortgage interest.

This is set to be a big week for Labour. Today Ed Balls launched a foray into pensioner benefits, later this week Ed Miliband is set to address the question of working age welfare. The question is what principle (or combination of principles) should underpin any new approach. The shadow chancellor’s announcement today points towards more means-testing but in January, Miliband defended universal benefits and since then Liam Byrne has promised that Labour would "strengthen the old principle of contribution". 

Means-testing and the contributory principle are, of course, uneasy bedfellows; one judges eligibility by what people need to take out of a system, the other by what people have put in. Labour should plump for more emphasis on the latter. This matters most for working age welfare, which has been haemorrhaging support in recent years. International evidence shows that the UK has one of the least generous welfare systems for the unemployed –and one of those with the weakest relationship between what people have paid in and what they get out. The two are linked: people tend to support systems with a stronger contributory element.

In a paper published today Demos argues that the government should create a two-tier system of benefits for job seekers, with higher entitlements for those with strong work records. This would end the ‘nothing for something’ system, in which many people contribute over a number of years, only to find themselves entitled to very little when they require help. This would be paid for by reducing spending on the Support for Mortgage Interest (SMI) scheme, which currently covers the interest on up to £200,000 of loans or mortgages for homeowners out of work, up to a maximum of two years.

The principle behind this is that if people make the choice to take on a mortgage, they should also insure themselves against the associated risks. Homeowners losing their entitlement to SMI would instead be auto-enrolled into mortgage payment protection insurance, leaving them to choose to not cover themselves or to purchase insurance for mortgage interest payments at a cost of £33 a month at most - less than the price of an average mobile phone bill. The money saved from this change would allow for a higher payments for those with strong work records – roughly £95 a week compared to the £71.70 that all job seekers currently get for at least six months.

These changes would promote personal responsibility, through homeowners insuring themselves against risk incurred by their own choices. They would engender reciprocity, through a system which rewarding contribution. And they would avoid increasing the deficit by reallocating existing spending, rather than adding new commitments. 

Duncan O'Leary is deputy director of Demos

A street cleaner passes the Jobcentre Plus office on January 18, 2012 in Bath, England. Photograph: Getty Images.

Duncan O’Leary is deputy director of Demos

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Trident is dangerous – and not for the reasons you think

Fixating on Trident is like replacing the guest bathroom while your own toilet flush doesn't work. 

Backing Trident is supposed to make a politician look hard, realistic and committed to Britain’s long history of military defence.That’s why the Tories delighted in holding a debate on renewing the nuclear weapons system in June 2016.

But it was the Tory Prime Minister who floundered this weekend, after it emerged that three weeks before that debate, an unarmed Trident missile misfired - and veered off towards the United States instead of Africa. Downing Street confirmed May knew about the error before the parliamentary debate. 

Trident critics have mobilised. Scotland’s First Minister, Nicola Sturgeon, called the revelation “serious”. Labour leader Jeremy Corbyn, a longstanding opponent of nuclear weapons, said the error was “pretty catastrophic”. 

The idea of a rogue nuclear missile heading for the White House may have fuelled the disarmament movement. But even if you enjoy the game of nuclear poker, fixating on Trident is dangerous. Because while MPs rehearse the same old Cold War arguments, the rest of the world has moved on. 

Every hour debating Trident is an hour not spent debating cyber warfare. As Peter Pomerantsev prophetically wrote in April 2015, Russian military theory has in recent years assumed that it would not be possible to match the West militarily, but wars can be won in the “psychosphere”, through misinformation.

Since the Russian cyber attacks during the US election, few can doubt this strategy is paying off - and that our defence systems have a long way to catch up. As shadow Defence secretary, Emily Thornberry described this as “the crucial test” of the 21st century. The government has pledged £1.9bn in cyber security defences over the next five years, but will that be enough? Nerds in a back room are not as thrilling as nuclear submarines, but how they are deployed matters too.

Secondly, there is the cost. Even if you back the idea of a nuclear deterrent, renewing Trident is a bit like replacing the guest bathroom when the regular loo is hardly flushing. A 2015 Centreforum paper described it as “gold-plated” - if your idea of gold-plated is the ability to blow up “a minimum of eight cities”. There is a gory but necessary debate to be had about alternatives which could free up more money to be spent on conventional forces. 

Finally, a nuclear deterrent is only credible if you intend to use it. For this reason, the British government needs to focus on protecting the infrastructure of the North Atlantic Treaty Organisation, now under threat from a US President who declared it “obsolete”. Eastern Europe has been nervous about the bear on its borders for some time - the number of Poles joining the country’s 120 paramilitary organisations has tripled in two years.  

Simply attacking Trident on safety grounds will only get you so far - after all, the argument behind renewing Trident is that the status quo will not do. Furthermore, for all the furore over a misfired Trident missile, it’s hard to imagine that should the hour come, the biggest worry for the crew of a nuclear submarine will be the small chance of a missile going in the wrong direction. That would be missing the rather higher chance of global nuclear apocalypse.

Anti-Trident MPs will make the most of May's current embarrassment. But if they can build bridges with the more hawkish members of the opposition, and criticise the government's defence policy on its own terms, they will find plenty more ammunition. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.