As you might recall, I put up quite a long post about this topic recently.
John Rentoul has made a similar point in relation to todays PMQs, suggesting that to expose the divisions in the Coalition on housing benefit leads to the impression that Labour is on the side of high welfare bills.
It’s an important point, one that I think Labour has to be aware of. It’s clear that the general principle of reducing welfare spending has broad support, notwithstanding that welfare spending as a proportion of GDP, is not in fact historically high.
What we need to understand is the strategic bind that the Conservatives seek to put Labour in. Duncan Weldon wrote a very good post on that very topic, and the question of how to respond to any particular reform needs to come back to the answer to that central strategic challenge – how to deal with a Conservative attempt to paint the fifference between Labour and the coalition as effectively being that we are soft on welfare and high on tax.
I’d argue four general points.
1. Keep coming back to Jobs
Economic growth is the engine that drives everything. If we are reducing unemployment, increasing tax income and lowering welfare payments, we are succeeding. Osborne wants to catch in a trap. Part of the way out is to point that he’s the one risking the leap into a pit.
Our objective should be first and foremost to lower budget constraints by reducing unemployment. Whether it’s L-shaped, double dip, jobless recovery or just plain patchy recovery, the need to create jobs will be a key political constant.
2. Accept reforming principles, and state them loudly
We have to be loud on this, as if we’re not, the bit where we are tough on fraud is drowned out by the bit where we defend the poorest. Think “Tough on Crime, Tough on the Causes of Crime”. We should never get into the position where we are defnding the apparently indefensible. We want welfare budgets to come down, and we should be proud of saying so. It’s a question of how we do it.
Instead of arguing the principles we need to accept them constantly, not least so we can…
3. Challenge the specifics.
While the principle of cutting budget deficits by cutting benefits are popular, the reality will be different. People generally supported the principle that Child Benefit should be reduced for the wealthy, but rejected the manner in which that principle was applied.
The argument shouldn’t be about scroungers versus hard workers, it should be about helping people into work not kicking them as they try and get back on their feet.
When it comes to equity, the Opposition should be clearly the voice that states when the burden of cuts is falling unfairly. Speaking of a fair burden we should…
4. Focus on “Welfare for the Wealthy”.
The political system contains huge numbers of breaks and hidden bonuses that benefit those who are not just comfortable but very well off. People who use them take them for granted. They don’t think they’re ripping of the system, just managing their liabilities. It’s exactly the same thought process that leads someone to play the benefits system for the most they can get.
So every time the Tories attack a Welfare family, we should agree, but challenge them to also attack the “welfare wealthy”, those who don’t pay their fair share, avoid their responsibilities and have the cheek to lecture the rest of us.
We shouldn’t shrink from condemning anyone who rips off the community, whether a Benefit Fraudster or a business that gets special treatment, or a milionaire using tax breaks to hide their liability. If the Tories want to make claiming what you’re entitled to a moral issue, that cuts both ways.
(Update: 17.43 – on looking at this again, I’ve corrected some spelling and numbering errors, added two misinlg links and added a couple of sentences to clarify what was a v rushed post. These are in italics)
Anyway, this is all a bit off the cuff, and might be totally wrong, so welcome your thoughts.
I think there are three parts to the politics of Osborne’s moves on welfare.
(i) Cut, and cut quickly, benefits (esp tax credits) received by households on the £30k to £45k mark – as Labour threatened he would do before the election. Counter-intuitively I think this helps him. Labour’s attacks in the last week of the campaign focused on this very issue (including our most effective party political broadcast). He is reckoning that Labour won’t pledge to restore them. So we won’t have the threat of them being removed and we will have little offer. (This is all along the lines of a James Forsyth Spectator article from around June).
(ii) Get himself into a position where he can claim in 2015 that the dividing line between Labour and the Coalition is that we want to increase taxes in order to spend more of benefits. Doesn’t matter that we’ll be talking about banking levies and so on – he just wants the “Taxes up under Labour” line. Ideally he’ll be pledging tax cuts in 2015 – possibly through raising the personal allowance further.
He tries to achieve this by narrowing the distance on departmental spending as much as he can and claiming that taxes and welfare are the only differences in plans (although the IFS threw a spanner in the works there).
(iii) Finally protect the old as much as possible (or at least be perceived to). I reckon winter fuel payment, free bus pass and free eye tests are probably safe. He knows they vote.
Guiding principle is to find a position that get the Tories 40/42% or so in 2015.
This is the Spectator column you refer to:
http://www.spectator.co.uk/spectator/thisweek/6099383/osborne-is-becoming-the-true-tory-leader.thtml
I post it up because it is one of the more important journalistic insights in to Osborne’s political strategy post-election – and how that is driving his economic policy.
Osborne et al also have a clever grasp of how to combine strategy and tactics.
For example, they keep on repeating the message that the debate on HB is about the benefits cap, e.g. Cameron’s claim today that people can still get £20,000 help with housing costs.
This takes a very complicated issue (housing benefit policy) and boils it down to one very simple issue which people are familiar with from case studies in the Sun, Mail and Express – do you think the government should give people who don’t work more than £20,000 per year in handouts?
The potential weakness of this approach is that it isn’t really levelling with people about what the govt is really up to. The HB cap is a tiny part of the overall welfare cuts (£65m per year isn’t even a rounding error in the overall budget), and the actual consequences of their policies are essentially indefensible – people in minimum wage jobs getting into debt or being evicted because they can’t afford the rent; councils housing people in more expensive temporary accommodation; and, of course, increasing numbers of people sleeping rough.
I think that picking a fight over HB is good strategy, even if not good tactics. A majority of people might back the government at the moment, but won’t necessarily by 2015 when the hard hitting documentaries show the effects on homelessness, people forced to quit their jobs and dumped miles away from their support networks and children growing up in B&Bs. It will be our job to make sure that people get informed about the real impact of these policies.
One measure which I would like to see established is the “10p tax” measure, in which cuts for low paid workers get reported according to how many times worse they are for people on low incomes than the abolition of the 10p tax rate.
Another key part of our strategy is addressing the problem that lots of people have been telling us that they don’t know what Labour stands for and that they think we pick our policies according to what we think will be popular. At a fundamental level, the Coalition’s plans on housing are totally and utterly vile, and taking a principled stand against the bullies is the right thing to do.
Yes, the point about making it clear what is really happening is a good one. The way they are choosing to reduce the Welfare Budget is to make lots of nasty little complex incisions, with a couple of populist points to draw public attention away from the real money-savers.
So it was very noticeable that every time Ed tried to move the terrain onto where the meat of the HB cuts were (10% reduction for people strugglingto pay their rent), Cameron simply moved it back to a discussion of the 20k a year. I suspect that’s how it’ll play this evening, too.
This is where the human interest approach is important. Imagine if the 10% question was about a family from witney who were scared of losing their home, much harder for Cameron to shrug off than a very strong but complex point.
But that only works if you’ve set out – as Peter points out, a credible strategic alternative. That will take time, but it’s crucial.
(One side point – Osborne is opposing letting opposition use OBR to test scenario’s. We should be demanding they make OBR truly independent and allow any MP to submit scenarios to be confidentially tested for impact. This would be a major boon for policy development in this country)
Overall Hopi we are losing good deal more of our income with trains child benefit and VAT to come .
We are also hanging on by our finger nails and we work and always have done
I cannot say this makes me feel more like giving money away to good causes. Less really. My point is that you start form the assumption that people do not earn the money they have and it is not really theirs .
Instead of being gratfeul for the help people do get ,( which we can ill afford )its all about telling everyone how selfish they are compared to you.
This is the great divide in the country. You do not care about tax payers and if you do there is an awful lot of catching up to be done after ten years of boasting about how much money you have been spending.
You quote Duncan`s chart for exmaple , why ?It is outrageous that in ten years of super heated growth with real distress receding we still have a Beveridge welfare model. You thinik this is something to be proud of ?
I think that picking a fight over HB is good strategy, even if not good tactics. A majority of people might back the government at the moment, but won’t necessarily by 2015 when the hard hitting documentaries show the effects on homelessness, people forced to quit their jobs and dumped miles away from their support networks and children growing up in B&Bs.
Maybe. Then again, we are only talking about people having to move from central London to its suburbs. Much of the electorate has a longer commute. Most people have made longer moves.
Is life in Tower Hamlets really so much better than life in Dagenham?
Great post Hopi, but arent the ideas you suggest one step ahead of having an alternative deficit reduction plan to begin with? Surely that continues to be our priority? We are going to come up with one….aren’t we?
I think Labour’s failure to do so is really debilitating the PLP, and its credibility.
Anyone can stand-up and condemn Tory cuts, I could do it, and do it for free while I’m at it, but what exactly do I say when I’m asked, “so what would you do then?”.
It’s a simple, very pertinent and reasonable question and one Labour appears to have not even a half-baked resonse to, worringly.
I find it tragic that the Tories will applaud £18bn cuts in welfare spending, whilst at the same time they do little to attack tax evasion.
It is imperative the Labour Party defends thos who are now being attacked. This means we cannot sit by whilst the Tories ride roughshod over the working class.
We need to expose the contradictions in their policy statements and attack every injustice. Yes, it is right the wealthy sometimes gain from universal benefits – and it may stick in the throat. But the alternative is some kind of means testing – a process that is expensive to administer and frequently unjust.
When asked what we should be doing about welfar spending, the answer is clear – defend it! When asked how we would resolve the deficit – attack tax evasion and make the banks pay. It’s not rocket science.
Accept reforming principles, and state them loudly
Hari, if you do that, you have to support or suggest some actual changes based on those principles.
Or you are going to end up looking a little bit silly.
The problem is, even if you come up with something the Party can support, people might ask why you did not do that during the thirteen years you were in untrammeled power.
I must have missed those 13 years of untrammelled power.
I felt pretty darn trammelled. If you’re talking about the Party, then ys, though frankly, the “so why didn’t you do it then?” argument is pretty tiresome. “Because we were not perfect” always seems to be a pretty reasonable response.
But the wider point, about making clear what those principles mean, is spot on.
However, the detailed work takes some time. No point being silly and rushing into commitments now. state the principles, outline priorities, work with others to develop policies. that should be enough for a newly jettisonned party to start ebuilding it’s policy framework.
Oh, and are you thinking of Hari Seldon, or Johann Hari? Either way, they’re not here!
“The political system contains huge numbers of breaks and hidden bonuses that benefit those who are not just comfortable but very well off. People who use them take them for granted. They don’t think they’re ripping of the system, just managing their liabilities. It’s exactly the same thought process that leads someone to play the benefits system for the most they can get.”
Hopi, the two examples you give have nothing whatsoever to do with each other. How many millionaires do you know live on tax payer funded hand outs? If I earn £10 million quid a year, I pay substantially more in tax, both in cash terms and as a percentage of my income.
How ludicrous to compare private income to benefit receipts.
OK – acutely conscious the purpose & tone here is internal tactics etc. so I feel like I’m intruding slightly. That said I was a supporter until May so humour me on a couple of points…
“The political system contains huge numbers of breaks and hidden bonuses that benefit those who are not just comfortable but very well off. People who use them take them for granted. They don’t think they’re ripping of the system, just managing their liabilities. It’s exactly the same thought process that leads someone to play the benefits system for the most they can get.”
Disagree quite strongly and suspect many others would. ‘Managing ones liabilities’ means paying your share and no more. Not as noble perhaps as those who happily let the Treasury take a few quid more than they need to but not illegal or – I’d contend – in anyway unethical.
Maximising benefits isn’t about limiting the contribution you make to the common weal, it’s about maximising the benefit you can extract from it. I well understand at both extremes there will be exceptions (underhand monied thugs and genuinely hardup families in need of every penny) but the contention that those two amount to the same doesn’t strike me as fair.
Likewise with:
“We shouldn’t shrink from condemning anyone who rips off the community, whether a Benefit Fraudster or a business that gets special treatment, or a milionaire using tax breaks to hide their liability”
A fraudster is breaking the law, a tax avoider is sticking to it rigidly. Labour would get a hugely sympathetic hearing – from me included – were they to argue that law is unfair and should be amended, not so if they appear to duck that argument but still try to hammer ‘the rich’ because it lands well among certain groups (that’s just the corollary of the lazy Daily Mail benefit attacks).
But surely you’d agree that a family claiming housing benefit to which they are absolutely entitled under the benefits system is in exactly the same moral position as someone managing their tax exposure to pay as little as possible?
Hopi btw I am having difficulty posting , sorry to butt in . Can`t fault your logic there by the way
Yes, which is why I’ve been just as dismissive of Guardian-led rants about tax avoidance as I am about Daily Mail-led ones on benefit culture; the issue is which side of the law the behaviour sits on.
My point – perhaps clumsily made – was to point out the difficulty Labour have once you accept that logic. You say:
“So every time the Tories attack a Welfare family, we should agree, but challenge them to also attack the “welfare wealthy”, those who don’t pay their fair share, avoid their responsibilities and have the cheek to lecture the rest of us.”
Tactically I’m not sure how that “we should agree” works; Ed M did precisely the opposite today and went into bat for recipients of those higher housing benefits.
Dated 20/9/10
“Today Mr Clegg will accuse middle class earners who pay accountants to minimise their tax bills of behaving like ‘benefit cheats’ He will say that legal tax avoidance and illegal evasion are ‘just as bad’ as falsely claiming benefits, adding: ‘Both come down to stealing money from your neighbours.’
http://www.dailymail.co.uk/news/article-1313511/Clegg-tax-war-middle-class-Families-face-lie-detector-tests.html#ixzz13bI3PXgS
I think it’s also worth talking about in-work benefits more.
Make the point that these are people who are willing to work – and we know that because they are working, even though it doesn’t pay enough to live on. And they’ll suffer for their public-spiritedness.
Of course, you do then come up against the question of “why do they still need benefits then?” But I’d argue that if Ed wants to keep pushing the living wage idea then talking about issues like the lack of a rise in real incomes is well worth doing – especially as its problems like this that seem to lie behind our malaise amongst a lot of demographics.
I’m still waiting for someone to explain how private income can be compared to state funded hand outs, morally, or any other way.
“Today Mr Clegg will accuse middle class earners who pay accountants to minimise their tax bills of behaving like ‘benefit cheats’”
This is a statement of breathtaking ignorance.
Has Mr Clegg ever asked himself where the income saved from tax liabilities gets spent? Could it be that the money is poured back into the British economy? Or does he believe, like most of the people here, that middle class families have an extensive network of off shore tax havens?
We have a welfare bill that is consuming £200 billion per annum – and all I read here is the politics of envy, and how to soak yet more from the “rich”.
I really despair at the mentality of the Left in this country.
“Has Mr Clegg ever asked himself where the income saved from tax liabilities gets spent? Could it be that the money is poured back into the British economy?”
But following the same line of argument – where does the income from welfare benefits get spent? Could it be that the money is poured back into the British economy?
Indeed, increasing welfare benefits can be a more efficient way of boosting the whole economy than cutting taxes:
http://duncanseconomicblog.wordpress.com/2010/08/02/some-thoughts-on-fiscal-policy/
So the less money the people who earn it keep and the more you give to those who don`t the better.That explains a lot
Am I the only one frankly amazed that it is, apparently, deemed justified for families to have to pay £21,000-a-year or more for a house they don’t even own? The equivalent of c.£440 a week!All this at a charge which itself is, supposedly, well below the hallowed ‘market rates’?
Are these properties furnished with gold? I very much doubt it…what a rip off! Where on earth does all that money go? Perhaps it would be better if we had a more equitable, fair and less greed-driven rental housing system full stop?