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.

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.