Labour tries to avoid falling into Osborne's welfare trap

Balls signals that he is willing to support the Chancellor's new curbs on claimants, including a seven-day wait for benefits.

Every time that George Osborne announces new restrictions on benefits it has as much to do with tripping up Labour as it does with saving money. Aware of how much support the party's perceived softness on claimants cost it in 2010, he aims to paint it as "the welfare party". 

Having opposed most of the £18bn of cuts previously announced by the coalition, it is a trap Ed Miliband and Ed Balls are now keen to avoid. After Osborne announced in the Budget that he would unveil plans to cap Annually Managed Expenditure (AME) in the Spending Review, (the area of public spending that includes volatile and demand-led items such as welfare, debt interest and EU contributions), Labour pre-empted him by outlining its own cap on "structural" welfare spending and announced that it would remove Winter Fuel Payments from the wealthiest 5 per cent of pensioners, a (rather successful) attempt to redirect attention on to the main driver of higher social spending: an ageing population. 

In today's review, Osborne announced a series of tougher rules for claimants, including a seven-day wait before they can claim benefits, a duty to learn English (with benefits docked if they fail to attend language classes), the introduction of weekly, rather than fortnightly, visits to the jobcentre for half of all jobseekers, a requirement for all single parents of children aged three or over to prepare for work and a duty for individuals to prepare a CV and register for an online job search before they can receive benefits. 

In response, it was notable that Balls avoided opposing any of the measures outright. He told BBC News: 

We need to look at the detail, obviously. On the welfare things, English language for incoming migrants - definitely. For the seven-day - is it going to be a blank cheque for Wonga? Let's look at the detail. If it saves money and it works, fine.

So, while expressing some scepticism, Balls has essentially accepted the principle of a seven-day wait for benefits provided that it "saves money" (it will, but at a terrible cost to claimants forced to turn to foodbanks) and that it "works" (again, based on Osborne's definition, it will). Nor, the party signalled, will it oppose the requirement for single parents to look for work. 

In his statement, Osborne also served notice of the biggest welfare trap of all. He announced that his new cap on total benefit spending would be set in next year's Budget and would apply from April 2015. Expect him to adopt the toughest limit possible and then challenge Labour to match it. Should it do so, it will be accused of signing up to an unconscionable attack on the poorest. Should it not, it will be accused of failing to control runaway spending. Having signalled that it will not borrow more to reverse cuts to current spending (only to invest in capital projects such as housing), any difference will need to be funded through tax rises. 

Ed Miliband and Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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What are Len McCluskey's chances of re-election at Unite?

The union boss's re-election bid will have far-reaching consequences for the Labour party. 

Len McCluskey has stepped down early as general secretary of Unite, Britain’s largest trade union, in order to stand again for a third term. The contest has potentially far-reaching consequences for the Labour party. McCluskey was elected in 2013 to serve a five-year term; but his supporters hope that the move will allow him to stay in post until the next general election. 

Unite, as well as being Britain’s biggest trade union, is the largest affiliate to the Labour party. That makes it a power player in the party’s internal politics, although their reach and influence is often overstated. It is the GMB, a trade union from the party’s centre, which has dominated parliamentary selections so far in this parliament. “It’s easier for people who’ve met Lisa Johnson [the GMB’s political officer in charge of selection] once in the pub to get selected than it is for Len to get his favourites in,” jokes one trade union official.

That McCluskey is going now and not in 2018 is itself the result of events beyond his control. Assistant general secretary Steve Turner, long spoken of as McCluskey’s chosen successor, is judged not to have  the credibility with Unite’s left flank to win. McCluskey, who is 66, had been trying to overturn a rule barring him from standing again in 2018 due to his age. However, that plan has been mothballed after it became apparent that he does not have the necessary votes among the executive committee.

McCluskey has been dogged by the widespread perception – one that Unite’s press officers strongly deny – that his preference in the 2015 Labour leadership election was Andy Burnham, not Jeremy Corbyn. (In the end, Unite backed Corbyn.)  That matters because in 2013, McCluskey’s strongest opposition came from the left, in the shape of Jerry Hicks, a member of the Respect party who has tried for the top job three times. Since then, McCluskey has been a vocal supporter of Corbyn’s leadership and Unite underwrote much of the Islington MP's second leadership bid. But the perception that he is a fairweather friend of the Corbyn project still lingers in some circles.

However, McCluskey is unlikely to face a well-organised challenge from the left, which would potentially be fatal. 

Who might face him? Hicks is believed to be highly unlikely to mount a fourth bid for the job, while Sharon Graham, the director of organising, is “ambitious but will sit this one out”, say insiders. It is expected that someone from Unite Scotland will likely make a bid. The great hope for Labour’s Corbynsceptics is Gerard Coyne, the regional secretary in the west Midlands. Allies of McCluskey hoped he could be bought off with a parliamentary seat, but he is now all-but-certain to challenge McCluskey for the post.

McCluskey is well-prepared for his bid. Jennie Formby, a close aide and former political director, now serves as regional secretary in the South-East, in preparation for the crucial task of getting the vote out for her boss. He starts as the frontrunner, albeit a vulnerable one. Coyne, for his part, has the advantage of coming from the West Midlands, where the old Labour right – once the backbone of Amicus and its predecessor unions, now merged into Unite – is still strong and relatively well-organised.

But here's the question. Has McCluskey's friendliness with the Corbynite left alienated his members with high-paying industrial jobs, who are not enamoured with the current Labour leader? McCluskey’s allies hope that he has done enough in defending Labour’s policy commitment to Trident to offset his support for Corbyn, who is opposed to the nuclear deterrent. His opponents believe they can successfully link him to the Labour leadership’s opposition to fracking, pharmaceuticals and defence, all of which are industries whose members are represented by Unite.

This election matters within the Labour party because Unite has multiples votes on its ruling national executive committee, and on the conference floor. It is also keen to put forward Unite-backed parliamentary candidates. So whether Len McCluskey serves another term could change the direction of British politics. 

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