Why Labour would not reverse the coalition's child benefit cuts

The party believes in shifting spending from universal benefits such as child benefit and the winter fuel allowance to services such as childcare and social care.

After Ed Balls announced earlier this week that Labour would remove the winter fuel allowance from the wealthiest 5 per cent of pensioners, I wrote that it was a sign that the party would not seek to reverse the coalition's cuts to child benefit. Having made the argument against universalism in the case of winter fuel payments, it becomes harder to make it in the case of child benefit. 

This morning, the BBC has confirmed my suspicions, reporting that "a future Labour government would not reverse cuts to child benefit made by the coalition". This is partly for the obvious reason that it would be very expensive to do so. Given that public spending, as Balls indicated in his speech, will continue to fall under a Labour government, it will be hard to justify spending £2.3bn on restoring the benefit to individuals earning over £50,000 a year, who rank among the top 8 per cent of earners in the country. 

But the decision also likely reflects a wider shift in Labour thinking. Influential figures such as IPPR director Nick Pearce and Gavin Kelly, the chief executive of the Resolution Foundation, have recently argued that the party should switch spending from universal benefits such as the winter fuel allowance and child benefit to services such as social care and childcare. This is not just because the funds for improved provision cannot be raised through taxation alone, but also because universal services (most obviously the NHS, but also comprehensive education and Sure Start) have generated more enduring public support than cash benefits. It is notable, for instance, that while the government was able to win majority support for the cuts to child benefit, it could never hope to do so in the case of the NHS.

But despite the economic and political logic of the move, it will prompt anger among those such as Peter Hain, who retain a traditional social democratic commitment to universal benefits. The case of child benefit is a good example of what Richard Titmuss had in mind when he warned that "services for the poor end up being poor services". While removing child benefit from higher-earners, the coalition has simultaneously frozen it in cash terms for three years, a real-terms reduction of £1,080 for a family with two children. But rather than seeking to restore child benefit to its previous value, Labour, for the reasons I've outlined, is likely to focus on investing resources in childcare. 

Ed Miliband speaks at the CBI's annual conference on November 19, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

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