Labour promises higher benefits for older people, but who will pay?

Having pledged to stick to Osborne's spending limits, more generous benefits for some will need to be paid for by cuts or tax rises elsewhere.

In a speech later today, Liam Byrne will rightly highlight what he calls "the scandal of the silver scrapheap". Nearly half of all unemployed people in their 50s have been out of work for longer than a year and the over 50s now spend longer on Jobseeker's Allowance (JSA) than any other age group, an average of 32 weeks. 

As Byrne will argue, the social security system currently fails such people. Having paid an average of £100,000 in National Insurance, they find they are entitled to just £71.70 a week in contributory JSA and will lose all support after six months if they have savings of £16,000 or a partner who works more than 24 hours a week. While the welfare system is often accused of offering "something for nothing", for these people it's more like nothing for something. "It makes you wonder why we bothered paying in all those years" Byrne quotes one man as saying, "they don’t bother to look at our skills. They tell us to apply for anything. It’s just banging square pegs into round holes". With this in mind, the shadow work and pensions secretary will reaffirm Labour's commitment to examine a higher rate of JSA for those who have contributed more. He writes: 

I think social security should offer more for those that chipped in most either caring or paying in National Insurance. Our most experienced workers and carers have earned an extra hand. We should make sure there something better for when they need it. That’s why we’re looking at just how we put the something for something bargain at the heart of social security reform, starting with a new deal for the over 50s.

In addition, he suggests that the UK could follow countries like Japan, Canada and the US in developing specialised support services for older workers, such as training grants. In the long-run, he argues, such measures would pay in part or in full for themselves, nothing that "if we raised the employment rate amongst our over 50s to the level enjoyed by Japan, they’d be 438,000 more people in work, and £3 billion in extra tax flowing into the Treasury". 

But what Byrne doesn't say is how more generous benefits for older people will be paid for in the short-term. Having pledged to stick to George Osborne's 2015-16 current spending limits, any new spending promises will have to be funded by cuts or higher taxes elsewhere. In his recent speech on welfare, Ed Miliband suggested that the qualifying period for contributory JSA could be extended from two years to five years. In other words, the young will pay for the old. But not only is it questionable whether it's right to reduce support for the young at a time when so many suffer spells of unemployment (or to create a benefits system that favours the fortunate), it's also unclear how much money this reform would save. Young people are far less likely to have savings of £16,000 or more and/or a partner in work, meaning many will continue to qualify for means-tested JSA. If Labour wants to build a social security system that genuinely offers what Byrne calls "a new deal" for the over-50s, it will need to spend a significant amount. Until it makes it clear who will pick up the bill, the Tories will be able to charge Labour with promising more of the unfunded spending that "got us into this mess". 

Shadow work and pensions secretary Liam Byrne argues that "social security should offer more for those that chipped in most". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Picture: ANDRÉ CARRILHO
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Leader: Boris Johnson, a liar and a charlatan

The Foreign Secretary demeans a great office of state with his carelessness and posturing. 

Boris Johnson is a liar, a charlatan and a narcissist. In 1988, when he was a reporter at the Times, he fabricated a quotation from his godfather, an eminent historian, which duly appeared in a news story on the front page. He was sacked. (We might pause here to acknowledge the advantage to a young journalist of having a godfather whose opinions were deemed worthy of appearing in a national newspaper.) Three decades later, his character has not improved.

On 17 September, Mr Johnson wrote a lengthy, hyperbolic article for the Daily Telegraph laying out his “vision” for Brexit – in terms calculated to provoke and undermine the Prime Minister (who was scheduled to give a speech on Brexit in Florence, Italy, as we went to press). Extracts of his “article”, which reads more like a speech, appeared while a terror suspect was on the loose and the country’s threat level was at “critical”, leading the Scottish Conservative leader, Ruth Davidson, to remark: “On the day of a terror attack where Britons were maimed, just hours after the threat level is raised, our only thoughts should be on service.”

Three other facets of this story are noteworthy. First, the article was published alongside other pieces echoing and praising its conclusions, indicating that the Telegraph is now operating as a subsidiary of the Johnson for PM campaign. Second, Theresa May did not respond by immediately sacking her disloyal Foreign Secretary – a measure of how much the botched election campaign has weakened her authority. Finally, it is remarkable that Mr Johnson’s article repeated the most egregious – and most effective – lie of the EU referendum campaign. “Once we have settled our accounts, we will take back control of roughly £350m per week,” the Foreign Secretary claimed. “It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS.”

This was the promise of Brexit laid out by the official Vote Leave team: we send £350m to Brussels, and after leaving the EU, that money can be spent on public services. Yet the £350m figure includes the rebate secured by Margaret Thatcher – so just under a third of the sum never leaves the country. Also, any plausible deal will involve paying significant amounts to the EU budget in return for continued participation in science and security agreements. To continue to invoke this figure is shameless. That is not a partisan sentiment: the head of the UK Statistics Authority, Sir David Norgrove, denounced Mr Johnson’s “clear misuse of official statistics”.

In the days that followed, the chief strategist of Vote Leave, Dominic Cummings – who, as Simon Heffer writes in this week's New Statesman, is widely suspected of involvement in Mr Johnson’s article – added his voice. Brexit was a “shambles” so far, he claimed, because of the ineptitude of the civil service and the government’s decision to invoke Article 50 before outlining its own detailed demands.

There is a fine Yiddish word to describe this – chutzpah. Mr Johnson, like all the other senior members of Vote Leave in parliament, voted to trigger Article 50 in March. If he and his allies had concerns about this process, the time to speak up was then.

It has been clear for some time that Mr Johnson has no ideological attachment to Brexit. (During the referendum campaign, he wrote articles arguing both the Leave and Remain case, before deciding which one to publish – in the Telegraph, naturally.) However, every day brings fresh evidence that he and his allies are not interested in the tough, detailed negotiations required for such an epic undertaking. They will brush aside any concerns about our readiness for such a huge challenge by insisting that Brexit would be a success if only they were in charge of it.

This is unlikely. Constant reports emerge of how lightly Mr Johnson treats his current role. At a summit aiming to tackle the grotesque humanitarian crisis in Yemen, he is said to have astounded diplomats by joking: “With friends like these, who needs Yemenis?” The Foreign Secretary demeans a great office of state with his carelessness and posturing. By extension, he demeans our politics. 

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left