Labour has got itself into a mess on welfare

by Peter Watt

I don’t know what Labour’s position on welfare reform is.  I know that the Tories want to cut welfare bills and make work pay.  I know this because they keep saying it and because they have just spent the last few weeks pushing changes to the welfare system that appear to confirm this.  It doesn’t matter at this stage whether the policies will actually achieve this or not because at this stage what matters is that their rhetoric is matched by actions that appear consistent with their words.

But Labour has in the past also talked tough on welfare and that it would like to reduce welfare bills.  The problem is that it is currently fighting a battle in which it is opposing the government’s attempts to achieve this.  So Labour appears confused.

The truth about the current crop of welfare reforms will not be known for some time.  Both the government and the opposition have talked up the changes brought in on April 1.  The government wants the changes seen as being a turning of the corner in the ever increasing rise in welfare payments.

The opposition wants the changes to be seen as evidence of the inherent nastiness, unfairness and cynicism of the government.  The truth is of course somewhat more complex.  The so called “bedroom tax” for instance is probably flawed as there is not enough social housing stock for people to actually downsize to.

People will therefore either be worse off or have to move to smaller premises in the private sector which will of course cost the state more in housing benefit.  But other aspects of the changes seem reasonable like the benefits cap; even if the government is crudely talking up the tiny numbers of families able to actually claim hundreds of thousands in benefits.

Experts on all sides are debating the merits of the various changes and in truth it is not clear who or what is right.  I suspect that both sides are over claiming the impact and that welfare bills will in fact continue rising anyway despite some clearly suffering further hardship as a result.  But what is crystal clear is that the government is determined to be seen as determined to cut welfare payments.

But Labour?  They seem determined to be seen as arguing that the changes are unfair and that they won’t work.  But it is not even a little bit clear, never mind crystal clear, what they would do instead.  And this really matters.

Now before anyone shouts at me, I am not arguing for not opposing the changes or for a bit of spin or double-speak.  I am certainly not arguing that Labour should simply look at the opinion polls that appear to vindicate Osborne’s welfare cuts and try and outdo him by demanding even more pain.

But I am arguing that the job of the opposition is to do more than simply oppose.  It is to present a coherent and credible argument as to why they would do better.  Now at this stage of the Parliament it is probably too soon to be setting out detailed welfare plans.  But it is almost too late to be setting out a direction of travel or broad principles.  Impressions are being formed in the minds of voters right now that will take some shifting in the last few months of the campaign in 2015.

Labour should be using the current debate to establish exactly what it feels about the state of the current welfare state.

It needs to explain how it would approach the rising bills and rising price to the taxpayer in an era when every spending priority is rightly being scrutinised.  The primacy of the contributory principle should be re-established.  Labour should better articulate what it thinks is the correct balance between overall tax levels and the effective subsidy given to some businesses and private landlords by way of housing benefits and tax-credits to employees.

We should be attacking the government for incompetence (not unfairness) for bringing in changes to the welfare system that won’t work or may even make things worse.  And we should strengthen this attack by strongly supporting those changes that will work.

Instead, what we see are Labour politicians on our airwaves and on social media talking about how unfair it is that people on welfare are being penalised by the government.  It may very well be unfair but what is also unfair is that people not in receipt of welfare payments are being taxed to the hilt to pay for this.  It just seems that Labour don’t care about this as much if at all.  The impact of “standing up for” the most vulnerable may very well be that Labour risks further alienating some of our most vulnerable from those who feel genuinely cross that they are having to work hard so that others do not.

I am sure that there are many very clever people who are advising Labour on the impact of the welfare changes proposed by the government.  I am sure because their figures and worked examples of those who are losing out are being used by spokespeople regularly and loudly.  I am hopeful that there are some equally clever people advising Labour on what the welfare state may look like under a Labour government.  I just wish that someone would make sure that the clues as to exactly what these clever folk are saying could also be heard.   Because right now, I am not actually sure what Labour’s approach on welfare reform actually is.

Peter Watt was general secretary of the Labour party

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15 Responses to “Labour has got itself into a mess on welfare”

  1. The wrong end of the stick, Peter. Labour got into a mess because it flirted with the dominant Daily Mail narrative of the feckless poor and punishing people on benefits. Ed Miliband has moved Labour away from this to much firmer and much more principled ground, and Labour is now being incredibly effective on issues like the bedroom tax.
    Housing benefit is rising because of escalating rents and in-work poverty and a new dependence on private renting. Despite brutal and unfair cuts, the Government is failing to cut the cost of welfare because its economic policies are wrong.
    ‘The primacy of the contributory principle’ is meaningless when most recipients are young and have not worked, retired or nearing retirement, or already in work.
    The statement ‘people not in receipt of welfare payments are being taxed to the hilt to pay for this’ contains so many distortions and myths. Many of the richest and corporations pay hardly any tax. Taxes, including under Blair and Brown, have switched enormously from incomes to regressive indirect tax, which everyone pays and the poor pay most. Most people receive payments, for example Child Benefit or the State Pension. It is dreadful to perpetuate the ‘us the taxpayers’ and ‘them the benefit recipients’ divide that the Tories rely on.
    The drivers for the rise in the cost of welfare are mass unemployment, growing in-work poverty, and a dependence on private rather than the much more efficient social housing.
    The welfare budget is not out of control, it is the product of economic policies and political choices. Peddling and repeating myths and distortions, as Peter has done in this piece, does not advance Labour, it holds us back.

  2. Ex-Labour says:


    I have said ( and been widely criticised repeatedly) in my comments that Labour is seen as the party of negativity just sat on the sidelines sniping at the government without offering any alternatives or solutions of their own.

    It was reported in the media last week that Labour are 6 months into a 2 year review of policy – too late to make any real impact. Are they really hoping to sell their policies in the last couple of months before an election ?

    More worrying is that the public perception is that Labour are not really concerned about the working person and the ever increasing tax bill. Many low income families are under pressure financially and why should they have to “stump up” for welfare benefits? In fact I would go further and say why should anyone at any income level be constantly “pick-pocketed” by the government.

    What Labour also refuse to recognise is that there is an element within welfare claimants who are happy to live this lifestyle and have become comfortable. I know as I live in a high unemployment area and know many of them personally.The arguement for redistribution is always compromised if the public dont believe those in receipt actually deserve it.

  3. Peter Watt says:

    Steve, thanks for comments (and on twitter). I agree with some of what you say and make some of the points in my post. However you don’t take on the main point that it’s clear what the Tories want and not clear what Labour does. The welfare system needs reform (labour will be planning theirs) but at the moment sound like opponents of reform. That’s not Daily Mail agenda at all.

    Ex-Labour SAYS – my worry is how long the review is taking, not in providing detail but in providing direction.

  4. dwll says:


    As someone who used to canvass and leaflet for Labour but no longer feels able to support them, it is precisely your sort of attitude that switches me off from the party at the moment.

    To give one example: in the area I live in London, an FoI request shows that in 2011 there were over 2,500 claimants who received between £1,000 and £2,000 per month in Housing Benefit and 231 claimants who were receiving more than £2,000 per month:

    Having lived in the private rented sector in south-west London for several years I have never paid more than £600p.m. because I cannot afford to pay more than that out of my wages. It does seem unreasonable to me that people who do not work should be able to claim these sort of sums – and I would not expect to be able to claim this amount should I need to rely on the welfare state in the future. It is also outrageous that parasitical slum landlords are able to enrich themselves so easily off the back of the taxpayer.

    But in the current climate on the left, anyone who wants to put a stop to this is shouted down as heartless or patronisingly told that they have fallen for tabloid “myths” as if we are too stupid to figure out what is going on for ourselves. The above example is not a myth – housing benefit claims really have been more than treble what I as a working person can afford.

    I don’t want to pursue a Daily Mail narrative but neither am I prepared to tolerate taxpayers money being used in this way. The Housing Benefit cap and the £26k overall benefit cap are entirely reasonable policies.

    It is really too much to ask that we can be offered a welfare policy that supports people who are ill or out of work through no fault of their own but also doesn’t make ordinary taxpayers feel like mugs who are being taken advantage of?

  5. John P Reid says:

    Steve, abstaining on an issue that we’d been getting into place 4 years ago, and half agreed with so we abstianed, wasn’t done to appeal to the daily mail Yes Blair courted the daily Mail 97-99, but The Labour party hasn’t cared what the Daily mail has thought about immigartion gay rights among otehr things ever since, and our view on Welfare now isn’t to appeal to them, If you read Peters article the reason we’re in a muddle is we have no clear position, we’re rightly not agians the Coalition view altogether ,we haven’t offered an alternative, and there are time when labour should agree with the daily Mail -The Stephen Lawrence case, Sometimes the Mail has it Right On Israel, Or on censorship post political correctness, and fowl mouthed bigoted comedians, even Brown Inviting Mrs Thathcer to No, 1o and all the good work she did on the economy controlling trade union extemsim, we had to agree with the Mail on that,

  6. e says:

    Two years out from an election Labour’s position and what the Tories are saying they want is likely being filed under “lying politicians”. But the real important stuff, the experience of living with the consequences of this government’s choices isn’t so easily ignored. So, while you might have to wait to hear what the experts decide is “the truth” most of us are not so lucky.

    Are you wholeheartedly arguing for the cost of welfare being the nation’s big and biggest problem because you actually believe the bs or because you feel Tory poison is working and the antidote – the route to power – is to pretend to go with it?

  7. swatantra says:

    We had an admission from Grant Shapps that the Tories massaged the unemployment figures by introducing invalidity/incapacity benefit; regretably Labour weren’t rigourous enough in reviewing and re-assessing those placed on that benefit. So, instead of a gradual re-assessment, we now have a huge programme of re-assesment in progress. Which means that in future those on that benefit, or any other benefit, need to be periodically reassessed, and checked that the information they have given is correct, and their circumstances have not changed all that much.
    Labour must be seen to be Fair but Firm when it comes to Welfare and assist only those that genuinely deserve, otherwise the electorate will not take them seriously.

  8. e says:


    What you argue, in short that its wrong that landlords receive ever increasing amounts of tax payer money is reasonable, but hardly the fault of tenants; it’s a consequence of over dependence on an inadequately regulated private sector. It’s been obvious for well over twenty years that this was happening, and local housing benefit caps have featured for at least a decade – in some local authorities at least. The only thing forced moves to currently cheaper areas will do, apart from bring distress to many, is to ensure this lucrative business continues.

  9. Mouth of the Umber says:

    Absolutely. But beforehand members of the PLP must talk to “scroungers”, people who are on ‘zero hours’ contracts, people who’ve been through a benefits system that is so antiquated that it is nearly collapsing and is no longer fit of purpose as well as anybody else who has suffered because of the ‘bureaucratic monstrosity’ that is the DWP/JC+

  10. dwll says:


    I agree that over-reliance on the private sector is a big part of the problem – as well as being bad for taxpayers, it is also bad for tenants who have to live in insecure and often substandard accommodation. When Housing Benefit levels gets as high as they have in some areas it also traps people because claimants find they are little better off if they do get a job. The welfare problem is closely linked to the present housing crisis (which Labour did little to prevent) and the failure of successive governments to build enough affordable housing.

    However, that doesn’t change the fact that people who live in the private rented sector who do not claim benefits are subject to market forces which push them out of pricier areas while people who claim Housing Benefit are insulated from market forces. That is a basic issue of fairness that people are entitled to complain about without being told by upper-middle class Guardian columnists that it’s all myths and lies.

    The standard of public debate on welfare this week has been appalling. The Mail and the Guardian are as hysterical as each other. Guido Fawkes versus Owen Jones arguing on the This Morning sofa about dead children for the purposes of political point scoring was a new low as well.

  11. Renie Anjeh says:

    Disagree with Steve. What Ed Miliband is to commit Labour to some reforms (and savings) to the welfare with two words at its heart – compassion and contribution:
    – End the bedroom tax and instead end housing benefit to antisocial tenants in social housing and the private rented sector (building on Caroline Flint’s ‘HASBO’ proposal)
    – Do not pay housing benefit to landlords with homes that do not meet the Decent Homes Standard
    – Remove housing benefit from the UC and pool it with housebuilding budget – devolve that pool to local authorities but require them by law to spend at least fifty percent on building more homes the rest on housing benefit
    – Delocalise the new council tax support and instead bring in Council Tax Benefit into the Universal Credit
    – Ensure that benefits in the UC are paid at a flat-rate, with cash-top ups for claimants with work history which will be linked to the NI record
    – Roll Child Benefit into the tax credit system, with the ability for parents with young children to get 25% of the total child benefit and child tax credits in their child’s first 2 years (as proposed by Hopi Sen and Frank Field)
    There are other plans Labour should adopt but it cannot a plan if it does not have a plan (and returning to a contributory welfare state has to be at the heart of that plan).

  12. Robert says:

    Very cynical of me I know, but Labour should sit back and let the Tories commit political suicide and then change very little if Labour wins the next election. Money will be short, so it will not be possible to make radical changes.

  13. e says:

    I know well of what you speak, and yes there are issues of fairness. But, accepting that absolute fairness is not possible, the answer surely is more social housing, local caps, rent control measures and offers of alternative housing before financial penalties can be imposed. What we’re getting is collective punishment: an arbitrary response directed at the least culpable. And those without resource will pay the price. Fairness is not the current administration’s concern. It’s beyond me as to why anyone should think it is…..

  14. LesAbbey says:

    There is more than a small case to be made for forcing some benefit claimants into work, that is some form of workfare, but this is not an argument to be made when we have such a high unemployment rate especially among the kids.

    Labour should be pushing on employment and growth and say that is the answer to increasing benefit payments. (There is no doubt that the Blair/Brown years by continuing Thatcher style economics were prepared to have high numbers on benefits while deindustrialising. Immigration was a way seen as keeping a flexible labour market rather than using the existing labour pool, which would have lead to increased wages.)

    Of course it doesn’t take an economic genius to know that reducing the spending power of the poorest in society while increasing it richest segment hurst growth as less is spent on the high street. When at the start of this economic crisis Australia gave money away to its citizens there was method in the madness.

  15. Speedy Loans says:

    Why is everyone worried about welfare? The government just announced an*ahem* increase in the minimum wage by 12p an hour from later this year. How wonderful. All our problems solved. Unless your a shirker. Then that is your fault. Go out and create your own jobs! What do you think you elected a government for anyway?

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