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.

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.