Douglas Alexander: Jobs, not threats, get families off welfare

The Government is making the classic Tory mistake – in a shrinking economy, greater work incentives will have a limited impact

Share
Related Topics

"This is what they came into politics for." That was how the Shadow Chancellor, Alan Johnson, explained the cheering of the Tory backbenchers that followed George Osborne's spending review, which had just confirmed the loss of 490,000 public sector jobs.

He was right, but it's also true that the tasks confronting Labour are what we came into politics for – to defend the vulnerable and allow everyone the chance to work and realise their potential. Because for Labour, effective opposition will never be enough. We cannot and should not be a party that is simply against doing things. Regaining people's trust and support means not simply opposing, but showing we have an alternative.

But what is the best way of defending the poorest and most vulnerable people in society from what George Osborne's austerity agenda? And how do we avoid falling on the wrong side of the artificial political dividing lines that the Tories are trying to establish in the public's mind?

Amid the claims and counter-claims, it is wise to take a longer view. We are witnessing the start of the fourth wave of change in the debate about the shape of the modern welfare state in Britain. From Beveridge to the 1960s, welfare policy in Britain was oriented around "rights". The late 1970s and the Thatcher era witnessed "retrenchment", with entitlements and support reduced. And since 1997 we have seen an increased focus on "responsibilities", with new conditions imposed on previously passive benefits.

Yet the only history the Coalition seems interested in is its own distorted view of Labour's recent record in office – which it uses repeatedly to justify its new approach. So those 13 years bear some re-examination. On the plus side, employment hit record highs, the claimant count halved and poverty fell. The lone parent employment rate rose by 11 percentage points and youth and long-term unemployment tumbled. We can also be proud of introducing the New Deal, back-to-work support, tax credits to make work pay, more and better childcare and increasing obligations for those on benefits to take steps towards work.

But election defeat is an instruction to face up to weaknesses, too. Given the priority attached to tackling unemployment, the reform of incapacity benefit came later in our time in government. While work incentives improved through the minimum wage and working tax credit, we should have done more to address the reality of low pay, job insecurity and poor quality of work at the bottom end of the labour market.

And we asked housing benefit to take too much of the strain for generation-long failures in the wider housing market, principally the lack of affordable homes to rent and buy. My real fear is that, in contrast to this record of progress, the new government, like previous Conservative governments, will prove to be much better at cutting benefits than at getting people into work.

We witnessed this strategy in the 1980s and early 1990s, when failure to understand the relationship between the length of the dole queue and the size of the welfare bill contributed to a threefold rise in the number of people reliant on out of work benefits and a doubling of social security expenditure as a share of GDP.

I believe that work is what works. The core task of the welfare state is to provide security and work. This is where the Government, for all its worthy words, is already making mistakes. It adopted policies in the July budget that meant 20,000 more people paying, in effect, marginal rates of more than 90 per cent. And it hit the incomes of working people hard – such as by cutting working tax credit, which weakens work incentives that should be the cornerstone of the system.

Two cases highlight how people will lose much of the existing incentive to move into work under the Government's plans. Excluding tax measures including the VAT rise, by 2014/15, a lone parent with two children moving from Income Support to a low-paying job will lose 35 per cent of the pre-tax gains of moving into work, largely because childcare of £30 a week can no longer be claimed for. Similarly, an individual on Job Seeker's Allowance (JSA) moving to a low-paying job will lose 8 per cent of the pre-tax gains of moving into work, largely because of the Government's plans to stop working tax credit keeping up with JSA.

While we will look carefully at all the proposed measures, we will not accept measures that will make the transition to work harder. There are some steps that we can broadly support, such as reforming the disability living allowance gateway, continuing the incapacity benefit to employment support allowance transition and driving down fraud.

In the next few days, the Government will set out its plan for a universal credit, with the laudable goal of improving incentives to work and simplifying benefits. I'm broadly supportive of a system that could be easier for people to understand and offer better rewards to work. But some of the proposed changes are just plain wrong – such as cutting housing benefit by 10 per cent for people who have been looking for work for a year.

Beyond these individual measures there is also a bigger missing piece of the jigsaw in the Government's plans that risks critically undermining their effectiveness. Labour's job guarantee provided paid work, not merely support, to those at risk of long-term unemployment; and the obligation to work for those simply circling around back to work programmes. The Government seems unable to admit that welfare reform will not work without work and without action to address the real obstacles to work people still face.

It is putting too much faith in the partial solution of a simpler benefit system that, while laudable, will only address part of the problem. Without tough conditions and real guarantees, back-to-work support could end up managing the system rather than transforming it. Without a growing economy and the creation of new jobs, better work incentives can only have a limited impact. The result – as with previous Conservative governments – could be higher unemployment and a rising benefits bill.

Real welfare reform and reductions in unemployment are crucial to bringing down the deficit. We will support the Government where it rewards work and increases security. We will oppose it when it does the opposite, holding it to account for what it isn't doing but should be. At every step, we will be tireless advocates of real welfare reform that protects better and demands more.

That is how Labour will earn the right to govern again, but, more importantly, that is how to shape a welfare system that transforms lives.

Douglas Alexander is the Shadow Work and Pensions Secretary

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

Read Next
 

Errors & Omissions: how to spell BBQ and other linguistic irregularities

Guy Keleny
 

South Africa's race problem is less between black and white than between poor blacks and immigrants from sub-Saharan Africa

John Carlin
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own