Labour's challenge is to show that it has the best plan to control welfare spending

The party needs a "social investment" strategy to reduce the subsidisation of private landlords, low-paying employers and long-term worklessness.

When George Osborne used his new year political message to raise the prospect of a further £12bn of cuts to working age benefits, it confirmed that the Conservatives will put welfare at the centre of their re-election strategy. In a speech at the IPPR today, Rachel Reeves will set out her first response to this challenge as part of a series of interventions from the Labour frontbench to connect their arguments about the "cost of living crisis" to the need for longer term social and economic reform.

Having signed up to the principle of a cap on structural welfare spending, the priority for Labour is to contest the debate about which party has the best strategy for sustainably controlling rises in the benefits bill and squeezing the greatest value from taxpayers' money. This requires a "social investment" strategy to reduce the subsidisation of private landlords, low-paying employers and long-term worklessness. The goal should be, over time, to shift spending from cash transfers and into housebuilding, childcare, apprenticeships and back to work support. As Ed Miliband argued last week, Britain has to earn its way to higher living standards.

A political direction of this kind can also be connected to Labour’s stated interest in reviving the contributory principle within the welfare system. In most of continental Europe, a distinction remains between social insurance (protection from cyclical risks for those who have contributed) and social assistance (means-tested support to those on the lowest incomes). However, over a number of decades, these two functions have been almost entirely conflated in this country. Restoring the distinction would mean aiming to reduce reliance on the state for permanent income replacement wherever possible, while strengthening temporary protection at key moments when earned income drops, like losing a job and having a child.

Marrying social investment and the contributory principle in this way would require a significant re-engineering of social policy, re-orientating of public spending, plus institutional innovation to revive the currently moribund National Insurance system. As part of IPPR’s Condition of Britain programme, we are exploring how such a strategy could be advanced, within the constraints of plausible fiscal scenarios for the next Parliament.

One option is to expand the role of income-contingent loans in providing much more substantial support to those who have contributed into the system if and when they face a drop income due to job loss, on a temporary and repayable basis. Our proposal for National Salary Insurance is one variant on this idea. Another is to provide a higher rate of short-term benefit for those who lose their job after having paid into the system, funded by increasing the number of years of contribution required before this entitlement kicks in. This could be modelled on Statutory Maternity Pay, which pays a much higher rate for the first six weeks – and is only available to those women who worked before having a child.

In the coming months, we will be analysing ideas such as these with a view to setting out practical, costed proposals for shifting to social investment and restoring the contributory principle. This will also include looking at how drawing a clearer distinction between the "social insurance" and "social assistance" tracks could affect the back to work support people receive and their interactions with the welfare system. We also want to explore how the institutional architecture of the National Insurance Fund – which evokes a tradition of mutual protection in this country – could be revived to help this task.

It is clear that the debate about benefits will be at the forefront of the political battleground over the coming year. It is vital that those of us committed to a resilient and effective welfare system advance feasible reforms that can chime with popular values, as well as defending against the worst attacks on vulnerable people.

Graeme Cooke is Research Director at IPPR

Members of the public in north London walk past a poster informing of changes to the benefits and tax system that came into effect in April 2013. Photograph: Getty Images.

Graeme Cooke is Associate Director at IPPR

Gage Skidmore via Creative Commons
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Donald Trump brings home his dark vision of America at the Republican convention

The Presidential nominee pledged: "Safety must be restored."

Donald Trump brought home the Republican convention Thursday night with a dark vision of contemporary America – a darkness he claimed only his leadership could lift. It was a lengthy, tightly-scripted speech framed around polarities – insiders and outsiders, criminals and victims, the United States and the rest of the world – and infused with righteous anger. And yet against the darkness, he offered not lightness but “greatness” – a bombastic, personalistic vision of how through sheer force of will he could right the American ship before it plunged irretrievably into the depths. “I alone can solve,” he famously tweeted earlier in the campaign. This was the 80-minute version.

Any presidential challenger, of course, has to lay out a set of problems they believe need fixing and a case for why their leadership might make a difference. It was the breathtaking scale and intensity of Trump’s diagnosis, and the lack of optimistic alternative to counterbalance it, that was notable compared to other acceptance speeches. He portrayed the United States as a country riddled with crime and corruption, a “rigged system” in which politicians like Hillary Clinton can evade justice, while police officers trying to protect its citizens become targets; a fearful country, its economy sluggish, its infrastructure crumbling, its security an illusion, and its international stature in freefall

For a candidate who has mocked the soaring rhetoric of President Obama (the “hopey-changey stuff,” as Sarah Palin once called it), it was perhaps not surprising that Trump’s speech would be short on uplift. It was at least more disciplined than his other campaign speeches, if in keeping with their tone and content – the much-maligned teleprompter rolling a script to which he largely stuck. (“He sounds presidential,” a lady behind me remarked, though his press conference Friday morning marked a reversion to free-wheeling form).

It was short on substance too, though acceptance speeches aren’t designed to be policy laundry lists like a State of the Union. Still, there were few specifics, beyond a pledge to revise tax laws which inhibit religious groups from political advocacy, and a newfound concern with student loans. It was daughter Ivanka’s speech that had the greater substantive heft, promising her father would push for new labour laws to help working mothers, and for affordable childcare in the US. Neither are traditional Republican positions, but the crowd seemed on board for anything Trump might offer.

He even had them cheering for LGBTQ rights, after recalling the tragedy in Florida last month, and the need to protect gay Americans from a “hateful foreign ideology” in radical Islam. “It is so nice as a Republican to hear you cheering for what I just said,” he commended the delegates in an unscripted moment. But whether they had really embraced this unexpected message – or if it was the anti-terror chaser that really got them on their feet – remains to be seen. In either case, it was a rare grace note in an otherwise bruising speech.

Presenting himself repeatedly as the candidate of “law and order,” Trump evoked Richard Nixon’s 1968 presidential campaign. At a time when American cities were erupting in race riots and protests over the Vietnam War, Nixon had pitched himself as the face of stability and security. Likewise Trump has reacted to the simmering racial tensions and terrorist attacks this summer with a hard-line stance on “lawlessness.” “Safety must be restored,” Trump said, in one of the eerier lines he delivered. Yet in his convention speech, Nixon had balanced his tough talk with a positive message – speaking of love, courage, and lighting a “lamp of hope” in partnership with the American people. 

Trump channeled another president in his speech, too, when he promised to give voice to “the forgotten men and women of our country” – drawing on the language of Franklin Roosevelt. Roosevelt had promised to aid “the forgotten man at the bottom of the economic pyramid” during the 1932 campaign. But Roosevelt’s solution to the forgotten man’s distress was economic internationalism – tearing down tariff walls and trading freely with the world – which the Republican Party then opposed. Trump’s solution is the protectionist policies Roosevelt had railed against.

Trump’s economic and security philosophy is encapsulated in another, more notorious phrase associated with that era: “America First.” A rallying cry for isolationists seeking to avoid US entanglement in World War II, it acquired an anti-Semitic taint. But Trump has employed it nonetheless, capturing as it does his core argument that America must do more to protect its own citizens against threats from within and without – from illegal immigrants, from radicalized Islamic terrorists, from the downsides of free international trade. Little wonder that former George W.

Bush staffer Nicolle Wallace announced that the Republican party she knew “died in this room tonight.” In embracing elements of isolationism, protectionism, and nativism, however, it is perhaps truer to say that Trump’s Republican party reverted to an earlier form.

Often disconcerting, at times mesmerizing, the question remains how effective this speech will be. The delegates responded enthusiastically to Trump’s fierce rhetoric, but many prominent Republicans had stayed away from the convention altogether. Combined with Senator Ted Cruz’s non-endorsement, Trump goes into the general election campaign without a fully united party behind him. For both partisans and the public, Trump’s speech offered a cast of villains to rally against, but no positive, unifying vision to rally behind – beyond the much-touted yet elusive “greatness,” of course. In a typical election year, that would seem a critical flaw in a campaign – but Trump loves to confound the naysayers. As his convention speech showed, he thinks the formula that got him this far - showcasing his fame and fanning Americans’ fears – can land him in the White House.