Ed Miliband's speech on welfare was an astute political rescue operation. After David Cameron labelled Labour "the welfare party" and George Osborne laid a trap in the form of a new limit on "annually managed expenditure" (which consists of demand-led items such as social security), Miliband branded Labour "the party of work" and announced his own cap on "structural spending". Rather than attempting to reduce the benefits bill through punitive and ineffective measures such as the "bedroom tax", Labour will seek to address the long-term drivers of higher spending, such as persistent unemployment, substandard wages and housing shortages. Although pension spending won't be included in the cap, Miliband also promised to show "a willingness to adjust the retirement age".
The speech was squarely aimed at addressing two of the public's biggest grievances with the welfare system: the "something for nothing" problem - that too many who get out don't put in - and the "nothing for something" problem - that too many who put in don't get out. In the toughest rhetoric we've heard from him on the subject, Miliband declared that he would never be indifferent to those who choose not to work. Labour, he said, had always been "against the denial of responsibility by those who could work and don’t do so." While the number who choose welfare as a way of life is far smaller than commonly thought, this was an important signal that Miliband shares the public's conception of fairness. The policy of a compulsory jobs guarantee for all adults unemployed for more than two years and all young people unemployed for more than a year (with the potential for the thresholds to be reduced) means Labour can no longer be accused of allowing millions to languish on benefits.
While the Tories have focused on tackling those perceived to abuse the system, Miliband turned his attention to those the system has failed. After much talk of reaffirming the contributory principle, he finally offered some detail, proposing a higher rate of JobSeeker's Allowance for those who have paid in for decades and suddenly find themselves out of work As Miliband said, "£72 is in no sense a proper recognition of how much somebody who has worked for many decades has paid into the system. As so many people have told me: 'I have worked all my life, I have never had a day on benefits, and no real help is there when I needed it.'” In order to avoid creating new costs, the change would be paid for by increasing the length of work required to qualify for contributory JSA from two years to five. Miliband also promised to offer extra help to return to employment for older workers who lose their jobs and to look at rewarding other forms of contribution such as parents looking after young children and children looking after their elderly parents.
Some Tories have attempted to portray Labour as divided on welfare but any speech that unites Tom Harris and Len McCluskey in praise must qualify as a success. Challenging questions for Labour remain: what happens if the new cap is breached? How much money will the measures proposed by Miliband really save? What level would a regional benefit cap be set at? How many, if any, of the coalition's cuts would Labour reverse? But today, the party is in a far stronger position on welfare than before.