Liam Byrne's last stand: five things we learned

The shadow work and pensions secretary took Ed Miliband's advice and referred to "social security", rather than "welfare".

Ahead of next month's shadow cabinet reshuffle, Liam Byrne's speech today was likely the last he will give as shadow work and pensions secretary. As I revealed earlier this week, the view in Labour is that Ed Miliband needs a spokesman the PLP can trust if he is to persuade it to accept his "tough but fair" approach to welfare. (Although Byrne wasn't short of praise for Miliband, describing him as a "man of courage and vision" who had done "extraordinary" things to set the agenda.) 

Unsurprisingly, then, his speech didn't contain any new policies but it was notable on several other fronts. Here are five points that stood out for me. 

1. It's called social security, not welfare

Ed Miliband has recently encouraged Labour MPs to refer to "social security", rather than "welfare", and Byrne is clearly one who got the message. While "social security" appeared 12 times in the speech, "welfare" appeared just once (in the final line: "their promised welfare revolution has collapsed"). In the Q&A that followed, Byrne succinctly explained the logic of this shift: "the words social security are important because they include the word security and because they imply a social contract". 

2. The bedroom tax: "It should be dropped, and dropped now" 

Byrne delivered one of the strongest attacks on the bedroom tax that we've heard from a Labour frontbencher, describing it as "the worst possible combination of incompetence and cruelty". He noted that "96% of those hit have nowhere to move to" (which means higher arrears and homelessness) and that it was "costing the public an extra £102.5 million to implement", concluding: "It should be dropped, and dropped now." This doesn't amount to a commitment to reverse the policy in 2015 but as I wrote last week, Labour will pledge to abolish it in 2015 and Byrne's speech revealed the grounds on which it will do so - that it costs more than it saves.

3. We support welfare cuts too

While Byrne's speech emphasised how Labour would seek to reduce social security spending by tackling unemployment (through its Compulsory Jobs Guarantee) and building more homes, it also highlighted several cuts the party supports. He reminded his audience that Labour has called for Winter Fuel Payments to be removed from the wealthiest 5 per cent of pensioners and that it would not "prioritise" the restoration of child benefit for higher earners.

Byrne also declared his support for "tightening up the rules on child related benefits for foreign workers." He explained: "Most people who come to Britain from Europe work hard and contribute more in taxes than they use in public services or claim in benefits, but we just don’t think it is fair that someone could move to London and leave their children in Paris or Prague and claim British family benefits and send them home."

4. Universal Credit - Labour would keep it

While deriding the government's dramatic retreat on Universal Credit, which will now apply to just ten job centres when it is rolled out this October (it was originally due to apply to all new claimants of out of work benefits), Byrne attempted to be constructive by calling for cross-party talks with civil servants "so that we can see exactly how bad things are and what's needed to fix them". It's not an offer Iain Duncan Smith is likely to accept (in an unsually personal attack on the Work and Pensions Secretary he said: "Something seems to be very wrong in the mind of the man at the helm of DWP") but it is an indication that the programme would likely survive a change of government. Byrne said that Universal Credit, which will replace six of the main benefits and tax credits with a single payment, was "a good idea in principle" and that "if Iain Duncan Smith won’t save Universal Credit, then Labour will have to prepare to clean up his mess."

5. The return of "full employment"

"Full employment" might be a phrase more associated with the Keynesian golden age than with recent British politics but under Ed Miliband it has been restored as an aim of Labour policy. The party views full employment (defined by William Beveridge as an unemployment rate no higher than 3%) as the foundation of a strong economy and the best way to reduce social security spending and narrow inequality. In his speech, Byrne promised that "over the weeks and months ahead", Labour would outline "a new approach that returns our country to full employment".

Shadow work and pensions secretary Liam Byrne speaks at last year's Labour conference in Manchester. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.