One of the private opinion-poll findings that most pleases Conservative strategists is that voters respond warmly to quotes from Ed Miliband demanding responsibility at both the top and the bottom of society. It is a key theme of the Labour leader's rhetoric: there should be no free rides, no "something for nothing" culture, whether among bankers looking for bailouts or welfare claimants not looking for work. Why does No 10 like it when Miliband strikes a chord with the electorate? Because the quotes are presented anonymously and, when focus groups are invited to guess which leader was the author, they say David Cameron.

To the immense gratification of the Tories, large numbers of voters think of Labour as the party of fat cat bonuses and benefit freebies. Shadow ministers insisting it isn't so doesn't change minds. The problem is one of brand association as much as political orientation, which partly explains why Miliband's attempt to position himself as a champion of the "squeezed middle" isn't working. The demographic group the Labour leader is targeting - households on modest incomes, struggling to keep their heads above the water - is a cohort where many look bitterly across the street at their neighbours and clock that they seem to be managing fine without going to work.

Byrne notice

That resentment has given the Tories licence to cut deep into the welfare budget, with savings of £18bn over the next four years. In 2013, a cap of £26,000 - roughly equivalent to the average household income - will be imposed on the amount anyone can earn in benefits. A separate cap of £400 per week on housing benefit is already in place. The squeeze is popular among people who are unaffected by it. There is a visceral moral appeal in the idea that self-sufficiency should be more lucrative than state subsidy. That maxim currently has more political force than compassion for the individuals whose support is being withdrawn.

Labour, meanwhile, has seemed trapped between the urge to oppose the harshest of the cuts and the need to shed a reputation for showering workless households with other people's money. 2012 is, according to party strategy, the year that changes. Liam Byrne, the shadow work and pensions secretary, has embarked on a campaign to shift public perceptions of what Labour thinks social security is for. Writing in the Guardian on 2 January, Byrne warned against the instinct to meet Conservative policy with an outraged defence of the welfare apparatus bequeathed by Labour. The party, he said, repeating a Miliband refrain, should be looking to foster a "something for something" culture. That means aspiring to restore people's confidence that rewards paid out by the benefits system reflect hard work and contributions put in.

Many on the left are made uneasy by this kind of talk, sensing in it a capitulation to a tabloid-Tory conspiracy to vilify people on benefits as "scroungers". But most Labour MPs, channelling the disaffection of their constituents, know the party has to send a dramatic signal that it is not wedded to the status quo. Senior party figures privately accept that Iain Duncan Smith, the Work and Pensions Secretary, has monopolised the welfare reform agenda with his promise to "make work pay". "We can't beat the Tories on their own terms on welfare," says one shadow cabinet minister. "We have to reframe the whole debate."

The universal credit, Duncan Smith's plan to eliminate perverse incentives that make benefits more attractive than work, will only be phased in from October 2013. Between now and then lies a period of economic stagnation, rising unemployment, greater job insecurity and a tighter squeeze on living standards. That combination is sure to change public perceptions of what it means to sign on.

As more people ponder reliance on the state safety net, fewer will be receptive to the caricature of feckless dossers living it up at the
taxpayer's expense.

How quickly attitudes shift depends on how easy people think it is to get a job. The government currently maintains the pretence that work is available for those who look hard enough. That is the underlying assumption behind the Work Programme, a vast welfare-to-work project, presented as a panacea by the Prime Minister whenever he is challenged on the problem of unemployment.

Under the programme, private and voluntary sector organisations compete for contracts to place the long-term unemployed in jobs. Work Programme providers are paid according to how successful they are in keeping their "customers" off benefits. But if there aren't enough vacancies, the providers don't get paid and the financial viability of the system starts to unravel. As one senior manager for a contractor said to me recently, "You can't force someone into a job that doesn't exist." There is a growing anxiety around Whitehall that the whole programme will collapse or face a humiliating government bailout.

Fallen idle

The Tories have so far had an easy ride on welfare. British people seem to feel more suspicion of people who receive benefits than gratitude that the option exists should they need it. Yet there are currently 2.6 million people unemployed and that figure is forecast to rise to around 2.9 million by the end of the year. There is a national average of 23 applicants for every advertised vacancy and the ratio is much higher in some parts of the country.

In such a climate, there is only so long the Tories can blame the length of the dole queue on the people standing in it. Eventually, unemployment will come to be seen, at least in part, as a symptom of government mismanagement of the economy and not just an expression of aggregate worker idleness.

That presents a huge opportunity for Labour. But before Ed Miliband can win an argument about welfare and work he needs to persuade people that his party's priority sincerely is helping people find jobs. Too many voters still see Labour's legacy as a system that was happy paying people to stay at home.

Rafael Behr is chief political commentator for the New Statesman