Labour stances on welfare and free schools prove it wasn't "the Blairites" holding Miliband hostage

The left wrongly assumed that the replacement of Liam Byrne and Stephen Twigg would mean a change in policy.

When Liam Byrne and Stephen Twigg, two "Blairite" figures, were sacked from the shadow cabinet earlier this week, there was undisguised glee on the left. After months of "Tory-lite" policy on welfare and education, it was thought that their departures heralded a new direction.

It is this hope that explains the outrage that has greeted the first interviews given by their replacements Rachel Reeves and Tristram Hunt. Reeves, the new shadow work and pensions secretary, defends Labour's compulsory jobs guarantee and tells the Observer: "Nobody should be under any illusions that they are going to be able to live a life on benefits under a Labour government". She also supports the £26,000 benefit cap provided that it is adjusted to take into account regional variations: "I think it is right that those people who are in work do not feel that those who aren't in work are getting something that they couldn't dream of getting."

Hunt, the new shadow education secretary, announces in the Mail on Sunday that Labour will not close down existing free schools and that it will support its own version in the form of 'parent-led academies'. He says: "We will keep those free schools going. We aren’t in the business of taking them down. We have to clear up this question which has dogged Labour education policy since we entered opposition and since Michael Gove began his reforms, as to what we’d do. We just want to say, 'You are setting up these schools, we are behind you.'"

In neither case has there been any change in policy. Reeves and Hunt's comments are entirely consistent with the positions outlined in Byrne and Twigg's speeches. But for the left this is precisely the problem. With the "Blairites" gone, they assumed that Miliband would be liberated to pursue his own agenda: no to free schools and no to the benefit cap. But the reality is that the 'tough' stances adopted by Byrne and Twigg weren't taken in spite of Miliband but because of him. It was the Labour leader who chose to adapt Conservative thinking on welfare and education, rather than reject it. The belief that he had been taken hostage by a  nefarious "Blairite" clique (frequently espoused by Len McCluskey) was merely wishful thinking by the left. If the reshuffle has finally dispelled this illusion, it is no bad thing.

But with Byrne and Twigg gone, Miliband won't be able to rely on the myth of "Blairite" capture (as he has sometimes been accused of doing) to defend the party's stances on welfare and education. He will need to confront the left himself.

Ed Miliband at the Labour conference in Brighton last month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Theresa May's U-Turn may have just traded one problem for another

The problems of the policy have been moved, not eradicated. 

That didn’t take long. Theresa May has U-Turned on her plan to make people personally liable for the costs of social care until they have just £100,000 worth of assets, including property, left.

As the average home is valued at £317,000, in practice, that meant that most property owners would have to remortgage their house in order to pay for the cost of their social care. That upwards of 75 per cent of baby boomers – the largest group in the UK, both in terms of raw numbers and their higher tendency to vote – own their homes made the proposal politically toxic.

(The political pain is more acute when you remember that, on the whole, the properties owned by the elderly are worth more than those owned by the young. Why? Because most first-time buyers purchase small flats and most retirees are in large family homes.)

The proposal would have meant that while people who in old age fall foul of long-term degenerative illnesses like Alzheimers would in practice face an inheritance tax threshold of £100,000, people who die suddenly would face one of £1m, ten times higher than that paid by those requiring longer-term care. Small wonder the proposal was swiftly dubbed a “dementia tax”.

The Conservatives are now proposing “an absolute limit on the amount people have to pay for their care costs”. The actual amount is TBD, and will be the subject of a consultation should the Tories win the election. May went further, laying out the following guarantees:

“We are proposing the right funding model for social care.  We will make sure nobody has to sell their family home to pay for care.  We will make sure there’s an absolute limit on what people need to pay. And you will never have to go below £100,000 of your savings, so you will always have something to pass on to your family.”

There are a couple of problems here. The proposed policy already had a cap of sorts –on the amount you were allowed to have left over from meeting your own care costs, ie, under £100,000. Although the system – effectively an inheritance tax by lottery – displeased practically everyone and spooked elderly voters, it was at least progressive, in that the lottery was paid by people with assets above £100,000.

Under the new proposal, the lottery remains in place – if you die quickly or don’t require expensive social care, you get to keep all your assets, large or small – but the losers are the poorest pensioners. (Put simply, if there is a cap on costs at £25,000, then people with assets below that in value will see them swallowed up, but people with assets above that value will have them protected.)  That is compounded still further if home-owners are allowed to retain their homes.

So it’s still a dementia tax – it’s just a regressive dementia tax.

It also means that the Conservatives have traded going into the election’s final weeks facing accusations that they will force people to sell their own homes for going into the election facing questions over what a “reasonable” cap on care costs is, and you don’t have to be very imaginative to see how that could cause them trouble.

They’ve U-Turned alright, but they may simply have swerved away from one collision into another.  

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

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