Miliband backs new welfare cap and brands Labour "the party of work"

In his speech on welfare, Miliband will announce that Labour would cap "structural welfare spending" and will criticise those "who could work and aren’t doing so".

Conservative strategists are fond of recalling that when focus groups were asked to choose the image they most associate with Labour at the last election they chose one of "a lazy slob" drinking a can of beer and watching daytime TV. In an attempt to reinforce the perception of Labour as the party for "the scroungers", David Cameron branded it "the welfare party" at PMQs last month. It is a label that Ed Miliband will directly reject in his speech today when he presents Labour as "the party of work" and attacks "the denial of responsibility by those who could work and aren’t doing so". He will say:

Labour - the party of work - the clue is in the name. Our party was founded on the principles of work. We have always been against the denial of opportunity through the denial of work. And against the denial of responsibility by those who could work and aren’t doing so...This country needs to be a nation where people who can work, do work. Not a country where people who can work are on benefits.

It's a message that will reassure those Labour MPs such as Frank Field and Simon Danczuk who warn that the party has positioned itself on the wrong side of the divide on welfare, but will trouble those who view such language as redolent of the Tories' "striver"/"scrounger" dichotomy.

As expected, Miliband will also announce that Labour would impose a cap on "structural welfare spending", a pre-emption of George Osborne's plan to introduce a new limit on annually managed expenditure (which includes volatile and demand-led items such as social security payments, debt interest and EU contributions) in this month's Spending Review. The cap, which would be introduced in 2015-16 and would then operate over the three years of each spending review, is aimed at separating the cyclical costs of social security, which increase at times of economic stagnation, from the long-term drivers of higher spending such as extortionate rents, inadequate wages and persistent unemployment. Rather than adopting the Tory approach of imposing populist cuts such as the "bedroom tax" and the benefit cap, which save little if any money, Miliband will pledge to control costs by "attacking long term problems like persistent unemployment, low pay and housing shortages".

On housing, he will promise to make "immediate savings" by negotiating lower rents with landlords through measures such as bulk purchasing and using some of the savings to build new homes. This should help to end the absurdity of the state devoting 95 per cent of housing spend to subsidising landlords and just 5 per cent to building houses.

Miliband will also pledge to save money by expanding use of the living wage in the public and private sectors (the IFS estimates that for every £1 spent on raising pay to living wage level, around 50p returns to the Treasury in the form of reduced welfare payments and higher tax revenues). He will say: "We can’t afford a low wage economy that just leaves the taxpayer facing greater and greater costs. It is only by changing our economy that we can both keep costs under control and make progress towards a fairer society."

Finally, in perhaps the most significant section of the speech, Miliband will flesh out Labour's long-standing promise to reassert the contributory principle, announcing that the party is considering a higher rate of Jobseeker's Allowance for those who have paid in the most. This is aimed at ending the "nothing for something" problem, which sees those who have contributed for decades offered a paltry £71 per week. Miliband will say:

Currently, after two years of work, someone is entitled to ‘Contributory Job Seekers’ Allowance. They get £71 per week, whether they’ve worked for two years or forty years. Two years of work is a short period to gain entitlement to extra help. And £71 is in no sense a proper recognition of how much somebody who has worked for many decades has paid into the system.

Significantly, after the Tories claimed that Labour's only welfare policies would increase, not reduce spending, he will promise that any change will be "cost-neutral". The proposed higher rate of JSA would be funded by increasing the qualification period for the contributory version of the benefit from its current level of two years. As Miliband will say, "A longer period of qualification would mean some new claimants would have to work longer than they expected before being entitled to extra support if they lose their job. But greater support for those who have worked for a longer time, providing real recognition of their contribution."

In response, expect the Tories to argue that Labour can't credibly pledge to reduce welfare spending when its only proposed cut - withdrawing the winter fuel allowance from the wealthiest 5 per cent of pensioners - would save just £100m and when it refuses to support the £26,000 cap on household benefits. Labour's current policy is to support a regional version of the cap which takes into account variations in housing prices. Property prices in London are 61 per cent higher than the national average and, as a result, nearly half of those households affected by the cap are in the capital. As Liam Byrne argued when the policy was first proposed last year, "While all that £500 a week might get you in central London is a one-bedroom apartment, in Rotherham, Yorkshire it would get you a six-bedroom house. How can a 'one-size-fits-all' cap be fair to working people in both London and Rotherham?

But the question the party will be pressed to answer is what level he cap would be set at in London and elsewhere. While a regional approach would mean a cap below £26,000 in some areas, it would almost certainly mean a cap above this level in the capital. The political problem for Labour is that most voters already regard the existing cap as too generous. A higher benefit cap in the capital would inevitably prompt the accusation that poorer areas are unfairly being asked to subsidise housing costs for Londoners. For now, Labour's answer is that it would ask an independent body, comparable to the Low Pay Commission, to set the level of the cap, but this will remain a headache for the party and one the Tories will take every opportunity to exploit. 

George Eaton is political editor of the New Statesman.

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Scottish voters don't want hard Brexit - and they have a say in the future too

Leaving the single market is predicted to cost Scottish workers £2,000 a year,

After months of dithering, delaying and little more than scribbled notes in Downing Street we now know what Theresa May’s vision for a hard Brexit looks like. It is the clearest sign yet of just how far the Tories are willing to go to ignore the democratic will of the people of Scotland.  
 
The Tories want to take Scotland out of the single market - a market eight times bigger than the UK’s alone - which will cost Scotland 80,000 jobs and cut wages by £2,000 a year, according to the Fraser of Allander Institute.
 
And losing our place in the single market will not only affect Scotland's jobs but future investment too.
 
For example, retaining membership of, and tariff-free access to, the single market is crucial to sustainability and growth in Scotland’s rural economy.  Reverting to World Trade Organisation terms would open sections of our agricultural sector, such as cattle and sheep, up to significant risk. This is because we produce at prices above the world market price but are protected by the EU customs area.
 
The SNP raised the future of Scotland’s rural economy in the House of Commons yesterday as part of our Opposition Day Debate - not opposition for opposition’s sake, as the Prime Minister might say, but holding the UK Government to account on behalf of people living in Scotland.
 
The Prime Minister promised to share the UK Government’s Brexit proposals with Parliament so that MPs would have an opportunity to examine and debate them. But apparently we are to make do with reading about her 12-point plan in the national press.  This is unacceptable. Theresa May must ensure MPs have sufficient time to properly scrutinise these proposals.
 
It is welcome that Parliament will have a vote on the final Brexit dea,l but the Prime Minister has failed to provide clarity on how the voices of the devolved administrations will be represented in that vote.  To deny the elected representatives of the devolved nations a vote on the proposals, while giving one to the hundreds of unelected Lords and Ladies, highlights even further the democratic deficit Scotland faces at Westminster.  
 
The Scottish government is the only government to the UK to publish a comprehensive plan to keep Scotland in the single market - even if the rest of the UK leaves.
 
While the Prime Minister said she is willing to cooperate with devolved administrations, if she is arbitrarily ruling out membership of the single market, she is ignoring a key Scottish government priority.  Hardly the respect you might expect Scotland as an “equal partner” to receive. 
 
Scotland did not vote for these proposals - the UK government is playing to the tune of the hard-right of the Tory party, and it is no surprise to see that yesterday’s speech has delighted those on the far-right.
 
If the Tories insist on imposing a hard Brexit and refuse to listen to Scotland’s clear wishes, then the people of Scotland have the right to consider what sort of future they want.
 
SNP MPs will ensure that Scotland’s voice is heard at Westminster and do everything in our power to ensure that Scotland is protected from the Tory hard Brexit. 

 

Angus Robertson is the SNP MP for Moray, the SNP depute leader and Westminster group leader.