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

Photo: Getty
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Jess Phillips's Diary: Lazy attacks on “lazy MPs”, and how to tackle the trolls

The Labour MP for Birmingham Yardley takes us through her week.

As parliament kicked us out for the conference recess season on 14 September, several tabloids run the predictable story: “MPs go back on holiday today only NINE days after returning to parliament from a six-week summer break.” I imagine the journalist who churns it out hates doing the same tired “all MPs are lazy baddies” shtick as much as we hate having to rebut the nonsense idea that we are on holiday when we are working full-time in our constituencies.

Legislation is on holiday, not legislators. I have still yet to find an MP who thinks it reasonable that parliament shuts for three weeks for conference season. Why can we not have these conferences at the weekend? Or during the summer recess? Hell, why do we have to have them so regularly at all?

Is the nation screaming out for the politically minded to spend hundreds of pounds sleeping on the floor of an overcrowded Airbnb in a seaside town after a heavy night on warm wine and small food? I’ll wager that you cannot find me a person on the Clapham omnibus – or frankly any omnibus, whatever an omnibus even is – who thinks we should have a week off making laws so that the Lib Dems can do karaoke.

Her Maj

As well as time off for conference, it seems that the Tories will be scurrying home early every Wednesday as well. They appear to be on strike from voting on any opposition day motions as their governing partners, Northern Ireland’s Democratic Unionist Party, play fast and loose with their allegiances. (The DUP backed a Labour motion against raising tuition fees, which the government says is non-binding.)

I and other Labour MPs sat in parliament and watched ministerial cars speed off on 13 September as the whips told the great and good to go home. Her Majesty’s Most Loyal Opposition is a pretty important part of our democracy. If I were Her Maj I might be more than a little peeved that Mrs May cannot be arsed to turn up to fight for what she believes in, whatever that is. Presumably whatever Boris Johnson and his gang say it is this week.

Leave the kids alone

I spent the weekend at a local Labour Party fundraiser, at my surgery, and handing out certificates to hundreds of young people graduating from the National Citizen Service. I sat in front of a lively, wildly diverse group of young people and thought we should hand over managing geopolitics to them for a while. Even the naughty kid at the back (whom I had to scold) gave me more faith than what I see on the news.

Family life

At a debate about the abuse of MPs, the traditional Tory colonel Bob Stewart told the house that his son had been targeted and isolated by his schoolteacher because his father was a Conservative MP.

Now, I’ve had my run-in ins with the colonel in the past, but I was horrified by this – one of my sons is the same age as his. As a parent and an MP I dread the idea that my choices will cause my sons’ grief. I’ve got enough guilt about leaving them half the week without their being targeted and bullied. I once found my son and his mates watching videos about me on YouTube that had been made by men’s rights activists. The vicious content was unsettling enough, but the thought of his teacher joining in the hate is harrowing (and, I’m pleased to say, completely unthinkable at his school). Our families are conscripts to this life – some are conscientious objectors.

Troll detection

So, should we ban internet trolls who abuse MPs online from voting? This is the suggestion floated by the Electoral Commission. I can see the argument for trying to make people treat the electoral system with respect. I also think we have got to have a hard line and a punishment. I’m just not sure how we will decide what is abuse. People say sexist stuff to me all the time. Would a negative comment about my appearance count, or are we talking rape and death threats? (What a time to be alive, when I can give a traffic light system to my sexist online abuse.) To some, the idea of having your vote taken away would only provoke a shrug; but to me it seems too much.

Climb every mountain

I have nearly finished More in Common by my friend Brendan Cox. It is about his late wife, my friend Jo, and is brilliant, but I dip in and out because I want it to last. Reading it makes me feel so tired: maybe because I read it in bed, but also because Jo’s energy and adventures seem exhausting. I like mountains on a screen saver, but I wouldn’t climb one, especially not with a tropical disease or a baby in my belly.

I’m also exhausted because of the ridiculous late nights we seem to be adopting in parliament. Jo’s distaste for the silly hours is covered in the book. She couldn’t understand why we couldn’t start earlier than 11.30am and finish in time for people to see their kids. As I put down the story of her life (and, my god, what a life) I’ll gladly trek for her to the seemingly impassable peak of reforming the voting hours in parliament. 

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left