Just before Parliament broke for recess the Welfare Reform and Work Bill was about to pass another hurdle on the way to becoming law. George Osborne hailed it as “a central part of a new contract for Britain”, which all “progressives” should rally round. Once again the Chancellor claimed for the Conservatives the mantle of reform – leaving Labour to oppose or support.
Of course, there are parts of the Bill Labour supports: more apprenticeships, lower rents for social housing, and capping the amount that people can claim in benefits so people are always better off in work – a measure from Labour’s manifesto. But Osborne’s Bill also abandons the goal of ending child poverty, and cuts support for those too sick to work. No “progressive” can support that, which is why Labour MPs voted for our reasoned amendment, showing which parts of the Bill we support, and which we will seek to stop or change. That is the kind of responsible, constructive Opposition the country needs.
But the deeper failing of Osborne’s welfare reform, and an opportunity for Labour, is the lack of ambition – which is odd for a man who really, really wants to be Prime Minister. His attempt at reform is another in a long line of modifications to the post-war welfare state that William Beveridge designed in 1942. The system we have now, largely based on means testing, bears little resemblance to Beveridge’s blueprint for a contribution-based social insurance system, with flat rate benefits. And yet, the Chancellor is still trying to bolt on new features to a creaking frame which is more than 70 years old. We still have relics of that system: National Insurance, Labour Exchanges (in the form of Jobcentre Plus), and the notion that what people can claim reflects what they’ve paid in – an idea almost completely at odds with how the system actually works.
Any successful social security system demands the consent of the whole public, not just part of it. Public trust in the welfare system is at an all-time low, with three in four people thinking we spend too much and get too little in return. That trust is being eroded by the system’s contradictions. It shouldn’t be surprising to politicians that when the public compare their understanding of how the system should work, to how it really does, their response is dismay, anger, or even resentment toward those who are seen to be taking advantage.
For Labour to win the welfare debate we should start with an acceptance that the Beveridge Report was written for a very different world: for a country rebuilding after war, when 40 per cent of jobs were in manufacturing, only a third of working-age women were employed, and one in three workers were under 25. Life expectancy was around 70 years for men, 76 for women. Very few moved; either geographically or socially.
Rather than offering blanket support or opposition to Osborne’s latest attempt at patching the tyres on a broken car, Labour should offer nuanced support to his plans, backing the bits that will work, opposing the parts that will not. But beyond this we can reclaim our place as the party of welfare reform with a bold and comprehensive plan. A new Beveridge Report, fit for the 21st Century.
It should be the Labour Party that is calling for all moderates and progressives from across the political spectrum – and those outside of politics altogether – to get behind our plan. As a political party we have the ability to marshal diverse voices in favour of a fair, efficient welfare system that supports people into sustainable work and provides for those in need. We can be the ones that propose the radical changes that are needed.
However, to really achieve this Labour politicians must be willing to give up control. While a new Beveridge Report can be commissioned by us and championed as a Labour vision for the future of welfare, it cannot just be a policy document by Labour MPs for Labour MPs. Like the original, it must be led independently. And like the original, nothing can be off the table. Tax credits, out-of-work benefits and employment support, and how we help people with housing costs, disability and in old age. And, of course, how we pay for it all.
There will be recommendations we are uncomfortable with, the report will find areas for change that will not sit well with many of us. But if we are to reclaim welfare reform and provide a positive Labour vision we must be willing to challenge ourselves as well the country. We must be willing to support new ideas, not just offer blanket opposition to the Tories.
It is only by presenting bold new ideas, built on an acceptance that we do not have a monopoly on truth, that Labour can control the agenda. If we match the ambition of Beveridge we can take welfare reform from this government and ensure it is a Labour vision that shapes the future.