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.

Photo: Getty
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Paul Nuttall is like his party: sad, desperate and finished

The party hope if they can survive until March 2019, they will grow strong off disillusionment with Brexit. They may not make it until then. 

It’s a measure of how far Ukip have fallen that while Theresa May faced a grilling over her social care U-Turn and Jeremy Corbyn was called to account over his past, the opening sections of Andrew Neill’s interview with Paul Nuttall was about the question of whether or not his party has a future.

The blunt truth is that Ukip faces a battering in this election. They will be blown away in the seats they have put up a candidate in and have pre-emptively retreated from numerous contests across the country.

A party whose leader in Wales once said that climate change was “ridiculous” is now the victim of climate change itself. With Britain heading out of the European Union and Theresa May in Downing Street, it’s difficult to work out what the pressing question in public life to which Ukip is the answer.

Their quest for relevance isn’t helped by Paul Nuttall, who at times tonight cast an unwittingly comic figure. Pressing his case for Ukip’s burka ban, he said earnestly: “For [CCTV] to work, you have to see people’s faces.” It was if he had intended to pick up Nigel Farage’s old dogwhistle and instead put a kazoo to his lips.

Remarks that are, written down, offensive, just carried a stench of desperation. Nuttall’s policy prescriptions – a noun, a verb, and the most rancid comment underneath a Mail article – came across as a cry for attention. Small wonder that senior figures in Ukip expect Nuttall to face a move on his position, though they also expect that he will see off any attempt to remove him from his crown.

But despite his poor performance, Ukip might not be dead yet. There was a gleam of strategy amid the froth from Nuttall in the party’s pledge to oppose any continuing payment to Brussels as part of the Brexit deal, something that May and Corbyn have yet to rule out.

If May does manage to make it back to Downing Street on 8 June, the gap between campaign rhetoric – we’ll have the best Brexit, France will pay for it – and government policy – we’ll pay a one-off bill and continuing contributions if need be – will be fertile territory for Ukip, if they can survive as a going concern politically and financially, until March 2019.

On tonight’s performance, they’ll need a better centre-forward than Paul Nuttall if they are to make it that far. 

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

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