Ed Miliband made a speech today setting out how Labour will cut spending on Social Security. He said “Controlling social security spending and putting decent values at the heart of the system are not conflicting priorities.” Many of the ideas he set out in the speech seem positive but his language suggested that Labour still have some of the mainstream rhetoric at heart. He said that the system does need reform, and I won’t disagree with that, but I differ slightly as to how.
“So the four building blocks of a One Nation social security system are: work, rewarding work, investing for the future not paying for failure, and recognising contribution.“
For the rewarding work part, Miliband noted that work does not pay enough to live on and that welfare fills that gap, and I applaud his commitment to promote a living wage and to change the law to prevent loopholes that allow reduced wages.
When it comes to investing for the future not paying for failure he said that housing benefit costs are high because there are not enough homes and said that building homes would be a priority, although he did not say who would pay for those homes or mention a rent cap. Nevertheless I applaud the commitment to building homes.
However, I disagree with what he said about recognising contribution. He said that “people’s faith in social security has been shaken” because “it appears that some people get something for nothing and other people get nothing for something“. The example given was that someone who became unemployed after forty years would receive the same help as someone who became unemployed after two years. I think this is a very poor example given that he was talking about National Insurance, because it is that nature of an insurance system that some people pay in more than others but that everyone gets the same help when they need it. A driver who had a car accident after ten years of driving would not get a better payout than a driver who crashed in their first week. The actual issue which needs addressing here is that Job Seeker’s Allowance is not enough to live on whether a person has worked two years or forty and in fact in the UK our unemployment benefits are much lower as a proportion of income than in many other countries.
It is when Miliband turns to the subject of work that we find some of that scrounger rhetoric still present. Tell-tale phrases such as:
“Which leaves hundreds of thousands of people in long-term idleness.”
“the denial of responsibility by those who could work and don’t do so.”
“Now just as there is a minority who should be working and don’t want to, there is a majority who are desperate for work and can’t find it.“
“Idleness” is a loaded word when Miliband could have referred to unemployment. At least in the last statement he said that it is a minority that does not want to work, but I believe he should have gone further and pointed out just how tiny that minority is rather than fuel the myth. Maybe as Sue Marsh says Labour are improving when it comes to scrounger rhetoric, but they are still using the language of the Tories and the tabloid papers and they have some way to go.
Labour’s big idea to tackle unemployment is a compulsory jobs guarantee. I like the idea of a guaranteed job after a year or two of unemployment. I am not so happy with the emphasis on the compulsory part, which again plays to the scrounger rhetoric. Under Labour’s plan the government would pay for 25 hours a week at minimum wage while the employer would pay for 10 hours of training. There would be a tax on banker’s bonuses which Labour say would fully fund the scheme. I think as solutions to unemployment go, this isn’t a terrible idea, although I have to ask what happens when the funding for these jobs ends. And I am concerned that if the system is not flexible then people may be forced into inappropriate jobs which may not accommodate their circumstances or abilities. I hope that some safeguards to prevent that are written in to the compulsion.
I am more concerned about the plan for parents. Miliband said that since children of 3 and 4 years old get 15 hours a week in nursery education, parents must use that time “to undertake some preparations to help them get ready to go back to work. Attending regular interviews in the Job Centre, undertaking training, finding out what opportunities exist. To be clear, under this policy there would be no requirement to go back to work until their youngest child is 5.”
In other words, parents must spend several hours a week for two years going in to the Job Centre to attend pointless interviews which presumably will be farmed out to the likes of A4E, where they will continually re-jig their CV and attend training which may or may not be relevant to work they can get months or years later. This, apparently, is to encourage the ethic of work, because he seems to believe the scrounger rhetoric that says otherwise those parents will never want to return to work.
Disabled people got a mention in the speech too. Unfortunately Miliband reinforced his commitment to the Work Capability Assessment. He did at least concede that the WCA is not working, saying:
“But when over 40% of people win their appeals, it tells you the system isn’t working as it should. And too often people’s experience of the tests is degrading. So this test needs to change. It needs reform so that it can really distinguish between different situations. Disabled people who cannot work. Disabled people who need help to get into work. And people who can work without support.
The test should also be properly focused on helping to identify the real skills of each disabled person and the opportunities they could take up. I meet so many disabled people desperate to work but who say that the demand that they work is not accompanied by the support they need. So these tests should be connected to a Work Programme that itself is tested on its ability to get disabled people jobs that work for them.“
Miliband did not say how exactly he would change the assessment so that it can accurately distinguish between people who can or can’t work or need help, and I doubt he knows. He didn’t say how he would stop the assessment being degrading. He also made no mention at all of the severe stress caused by continuous reassessment and health implications of that.
The benefit cap, too, got Miliband’s support. He said:
“In 2011, there were 10 cases where £100,000 a year was spent on housing benefit for individual families. That’s 10 too many. And it is one of the reasons why Labour has said we would support a cap on overall benefits. As Ed Balls said on Monday, an independent body should advise government on how best to design this cap to avoid it pushing people into homelssness and costing more.”
Possibly the most stupid policy announced was an overall cap on social security spending for three years. The effort to reduce the spend on social security by attacking unemployment and high rents is great, but there is no predicting how the economy will actually do to the total cost and setting an absolute budget means that should too many people need help then some will go without or everyone will have to get less. That will result in poverty, homelessness and starvation either way.
I don’t want to criticise these ideas without providing an alternative. I want to suggest some ideas of my own which would take into account some things that I think we need to recognise: That capitalism will not focus work where we have need, such as healthcare, social care and building. That even after creating more jobs we cannot go back to full employment because new technology, efficiency savings, automation and outsourcing mean that we will never again need as many workers as we once did. That there are very few people who can work but do not want to, but there are many who want better working conditions or better wages who have a very weak bargaining position. That the benefits system is inefficient, full of errors, and places a huge strain on those subject to it.
Allowing for those facts, then, I would suggest:
- Build new social housing by investing in housing associations and cap rents to create secure and cheap homes not subject to inflation through private profit.
- Invest heavily in healthcare and social care to create jobs in areas where we need the services.
- Introduce a Universal Basic Income (Citizen’s Income) that will provide enough to live on to every single citizen.
I think that housing associations are a much better way to invest in housing than any scheme to encourage private industry to build them. Housing associations become self-financing and take that initial investment to continue creating more homes which are cheap and secure. Rent caps would reign in private landlords who are profiteering from inflated rents, and would also prevent rents from rising in response to universal basic income. Investing in the NHS and social care would both create jobs and improve our healthcare and quality of life to the benefit of all rather than subsidising jobs within private industry for the profit of a few investors.
Universal Basic Income is, I admit, a much more distant proposition because it’s too revolutionary for many people. The concept is this: that every citizen would receive an income sufficient to live on, regardless of means, without asking anything of them in return. They would not be not required to look for work, or to volunteer for a charity, or to do community service, or anything else. It would be unconditional. It would replace the tax allowance on wages because although an employee would pay tax on all income, they would still have their universal basic income. It would replace pensions, Job Seeker’s Allowance and Employment Support Allowance (Incapacity Benefit) as well as most other benefits, in one stroke removing means testing, the work capability assessment, and the stress and stigma of the current system.