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Where does Labour go from here?

Karim Palant, Ed Balls' former head of policy, explains where Labour goes next.

So it was the economy - stupid - after all. The pessimists among us kept expecting our position in the polls to unravel. Like Lynton Crosby, we awaited the date when "crossover" would arrive. As weeks to polling day became days and hours, we began to hope that it might not happen.

But at the cruellest possible moment, just as I’d fully dosed up on the Kool-Aid, it did.  In the stunned silence of HQ, thoughts turned to those millions of pencils wavering over millions of ballot papers. At my desk by twenty to ten I had used the wait to draft an email of comments on the draft a Lib Dem coalition negotiating position. I paused over the send button, worried about tempting fate. My own wavering pencil. The email is still in “drafts”.

The debate about how we avoid a loss like that again will range widely - as it should. What some call political body language, tone and message frequency is a huge part of it. Political positioning is as much about what you choose to say often and what you choose to say only occasionally. The voters we need to reach may pay just a few minutes a year’s worth of attention to politics – around election time in the main.  They may know that we have a deficit, that people are worse off and that the combination is miserable. But may have heard somewhere that finally things are apparently looking up.

It is perfectly consistent to both want change yet also to worry that what positives there are might be put at risk by change: your job, your savings, your pension or your mortgage. An opposition needs people to feel that they don't pose any risk but do offer big enough change to make taking a chance worth it. It's like trying to make an omelette without the public thinking you're breaking any eggs.

That is why successful leaders of the opposition are so rare. Measured by winning a majority, as a thirty four year-old, there has been one in my lifetime. So for example, the public do feel that banks, energy companies, rail companies, supermarkets and letting agents rip them off.  That might make some feel that Labour’s route back into voters’ hearts is a version of “my enemy’s enemy is my friend”. But people are just as wary of a potential government that is too happy to make enemies. And making it crystal clear you really understand voters’ concerns on spending, on immigration and on welfare, rather than seeking to change the subject is the only route to regaining their trust - they won’t ignore those just because they agree with you about other things.

That is easier said than done. Debates about the past are one thing – and humility or showing that we have learned from our mistakes are important. But reassurance really means showing we have the strength to deliver a tough and responsible approach in the future. Our shadow cabinet and leadership do understand the policy challenge. Part of my job was to stop spending commitments. Shadow ministers weren’t battering at the door with a wish list of expensive promises. They get that the game has changed.

But an opposition gets limited moments to reach the public. We need to be willing to them to reassure and resist the urge communicate a sense of radical disruptive change without making it clear, limited, and concrete. We should also absorb the fact that we are talking fiscal discipline not only because the voters want us to but because it matters to the country and it matters to us.

Voters want a leader who will lie awake worrying about the fact that national debt as a share of our economy is forecast to still be 70 per cent in 2020. That is almost double the pre-crisis level and more than where it was forecast to peak - this year - when George Osborne came to office. This shows the scale of the failure of the wasted years of the last Parliament.

But this understanding alone is not enough to either sort out the public finances or to win the election. Labour can only win in 2020 by arguing that a progressive approach to fiscal responsibility means a combination not just of spending cuts or higher tax revenues, but balanced and sustained growth. It would not make any economic or political sense to seek to out-cut the Tories for whom reducing the size of the state is a raison-d’être. And as a party, we don’t believe most working people are comfortably off and can afford significant new tax rises - which limits the scope for raising revenue.

So, many have correctly concluded that we will not win the next election without growth, productivity, exports and innovation at the core of our approach. Talking about ways to deliver a step change in digital jobs, infrastructure, science, a green economy, a pro-growth tax framework for business and a regional revival are not nice-to-haves but essential parts of making Labour’s argument stack up.

We should not focus on growth or living standards because we want to avoid talking about the difficult bits – but precisely because it is core to our plan to deal with those difficult issues facing the country. A related conclusion that we cannot avoid is that to prosecute that argument you must truly value the private sector’s role in driving those things. 

These are key among the lessons we will need to learn for the next five years. And whoever wins will need to get serious, quickly. The consequence of not doing so will be millions more wavering pencils in 2020.

Karim Palant was head of policy to Ed Balls. 

Photo: Getty
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The Universal Credit nightmare shows there’s nothing more dangerous than a good idea

The hardest thing to build into any benefits IT project is common sense.

The trouble with Universal Credit is that everyone thinks it’s a good idea. Labour has long backed the concept of rolling multiple benefits into one payment but studiously refused to implement it when in power. Why? Because it takes all the mess and complication that claimants have to navigate and transfers that to the government. It’s like Whitehall volunteering to find your next house, sort out the survey and fix the best mortgage for you. It sounds brilliant – and that should make you suspicious.

“I think it’s quite a good idea, having it all in one go,” says Jo Whitaker when I speak to her at home in Moulton, North Yorkshire. Unfortunately, the reality fell short. Diagnosed with breast cancer in late 2016, Whitaker had to give up her cleaning business as she underwent chemotherapy. She was told – oh, happy day! – that her local jobcentre was one of those testing Universal Credit ahead of its countrywide roll-out.

There was a catch. In order for her to claim Universal Credit, her existing child and working tax credits had to be stopped for six weeks, while her eligibility for the single monthly payment was assessed. She created an online “journal” to record her income and provide supporting evidence and was told that she could apply for an advance, which would have to be paid back later, to cover the time she spent waiting.

She received her payments in November and December, then ran into a problem. Whitaker, a mother of three, owns a house jointly with her ex-husband, but it was on the market and had no tenants. (She was renting elsewhere.) This seems to have given the jobcentre computer conniptions: did Whitaker have an asset that meant her housing benefit should be reduced, or not?

She received a demand in her “journal” a few days before Christmas: show us that you’re paying rent, or we’ll stop your benefits. “I was on my fifth round of chemo and I wasn’t well at all,” she says. “After Christmas, I couldn’t get hold of anyone to give me a straight answer. This went on for about a month.” The January payment didn’t come. Whitaker spent hours on the phone – her mother, listening to our call, chimes in to amplify this point – and she eventually received a letter admitting that it was a mistake to withhold her benefit. “I can remember being on the phone, crying my eyes out,” she says. “Chemo, it does your brain in. It was the last thing I needed. It was an absolute nightmare.”

Yet Jo Whitaker’s story is not a particularly extreme one. She is, she says, lucky to have a great support network, and she never felt truly helpless. Her business experience helped her budget and cope with rectifying the jobcentre’s error. I’ll also admit that when I heard she had a house, I thought: hang on, why is she claiming benefits when she has an asset? As she talked, the situation became clear. But this is the kind of detail that computer systems struggle to deal with: the hardest thing to build into any IT project is common sense.

Many aren’t as resilient as Whitaker. New figures from the Department for Work and Pensions show that around a quarter of new claimants wait more than six weeks for their first payment. And because Universal Credit is paid to tenants, rather than directly to landlords, it has significantly increased the number of people falling behind on their rent.

There’s a cruel double bind here. Most people claim benefits precisely because they are in difficult personal circumstances. They have lost their job, got sick, or broken up with a partner and had to move house. Those same circumstances make dealing with bureaucracy more challenging. When the computer says no, it doesn’t just take away one of half a dozen benefits; it can disrupt the only assistance people are getting.

The quiet unhappiness of Jo Whitaker’s story should worry the government. In 2015, the possibility of cuts to tax credits caused enough concern on the doorstep and in constituency surgeries that even Tory MPs quailed. George Osborne’s resulting fudge was to kick back the cuts, promising that “savings” would be found anyway as more people moved to Universal Credit.

The idea that this can be accomplished without people feeling noticeably poorer is optimistic. That it can be accomplished using the existing IT system is even more so. Universal Credit should be a pragmatic project, but it has always been politicised: first by Iain Duncan Smith’s evangelical insistence that he would “make work pay” (even though 60 per cent of UK households in poverty have at least one member who works) and then by his flouncing anger that the project was being used as a cover for “salami-slicing” the welfare budget. IDS must have been the last man in Britain to work out that Osborne wasn’t just pretending to be into austerity; he really loved it.

In 2013, the National Audit Office found that the Universal Credit programme was struggling with a “tight timescale, unfamiliar project management approach and lack of a detailed plan”. The Labour MP Margaret Hodge, then the chair of the public accounts committee, concluded that most of the £425m spent so far would have to be written off. The programme was “reset”.

That, in effect, is what Citizens Advice wants to happen again. The organisation is calling for a pause on the roll-out, which is scheduled to accelerate next month. “[It] is a disaster waiting to happen,” says its chief executive, Gillian Guy. “People face severe consequences, like visits from bailiffs and eviction, when they can’t pay their bills.”

Like Jo Whitaker, she believes that the “principles behind Universal Credit are sound”. But that won’t be a consolation to anyone left cold, hungry or homeless over Christmas. In politics, there’s nothing more dangerous than something that everyone thinks is a good idea. 

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

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