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Miliband’s speech heralds majoritarian welfare, opens new political space

Today’s speech on social security and the reform of the welfare state was a big moment for the Labour leader, Ed Miliband. He has made some important arguments, on which at least a sizeable part of the battle for the hearts, minds and votes of the electorate will turn. To reduce these to a question of universalism versus means-testing, as commentators from both left and right have done, is entirely to miss the point of the speech, however.

Miliband’s political purpose is twofold: first, to shore up Labour’s position on the welfare state in the face of sustained popular hostility to key elements of benefit expenditure; and second, to get ahead of a telegraphed trap that George Osborne will lay in his forthcoming spending review of a new expenditure cap on overall working-age social security. His substantive concern is to meet these political challenges by setting out a recognisably social democratic and therefore majoritarian agenda for controlling social security spending, rather than embracing a residualised, shrunken safety net for a Shameless-style, so-called underclass.

Conflating a majoritarian approach to the welfare state with the existing structure of universal cash transfers is a mistake. The British welfare state has for the most part of its history contained elements of universalism, means-testing and contributory entitlement. The balance between them has shifted over time, as indeed has their institutional expression.

In the immediate post-war period, housing needs were met by building council houses. In contrast, today the government spends 95p in every £1 on housing on housing benefit. The winter fuel payment – held up by many this week as a vital resource for social solidarity – was only created in the late 1990s. It is a marginal addition to pensioner incomes, important for the poorest, but nothing like as vital to the renewal of social security for older people as the basic state pension, which has been restored to its central role in the welfare state in recent years. Conversely, the most important embodiment of collective risk-sharing and mutual responsibility in Britain is not a cash transfer at all, but a much loved institution: the national health service.

For the foreseeable future, then, the welfare state and the broader architecture of collective public provision will contain elements of universalism, means-testing and contribution. The majoritarian character of Labour’s agenda today is affirmed by its recognition that social security should not be reduced solely to its means-tested elements, nor focused on particularly disadvantaged claimants groups, rather than the broad mass of the population. This remains the key dividing line between Labour’s approach and that of work and pensions secretary Iain Duncan Smith (at least for working-age benefits, since both parties support the principle of a single-tier basic state pension).

Labour’s majoritarianism takes on a new shape in Miliband’s speech, however. Three key areas stand out. First, there is the attempt to resuscitate the contributory principle, via changes to the rules for jobseeker’s allowance payments. Second, there is an argument that wages, the rewards to work and the employment rate must all rise as a core component of any welfare strategy, to take the strain off tax credits. (Although it should be noted that almost all OECD countries operate tax credit or in-work benefit systems, and there will always be an important role for these transfers, even if real wages and household employment can rise.) Third, there is a marked shift towards productive investment in institutions and services, rather than compensatory transfers: from housing benefit back to bricks and mortar, and from child benefits and tax credits to childcare services.

Services and institutions support higher employment rates, help to constrain cost rises in social security, and provide norm-setting places in which people can live their lives in common. For all of these reasons, they are likely to put down deeper roots in public sentiment and discourses, and to better withstand attempts to cut back collective provision, even if an important role for cash transfers is retained in key areas.

Of course, there will be arguments about the detail of these proposals, how to define the new social security cap, and how it can be delivered. But these should not distract us from the importance of the new territory that the Labour leader has opened up today: this was not a defensive or tactical speech, but one that creates political space for new ideas and energy on the centre-left. Labour’s task now is embrace the arguments it has made this week, not resile from them in the coming weeks, and move forward on other key fronts, in particular on education, childcare and other key public services where it still lacks strategic direction and strong policy definition. The political lesson of the last year is that it has to sustain momentum from its set-piece moments, rather than allowing drift to undermine the advances it makes. This has been a week in which Labour has finally and firmly pivoted its politics towards the next general election – the key question is whether it can stay the course.

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5 Responses to Miliband’s speech heralds majoritarian welfare, opens new political space

  1. For greater majoritarian equality of opportunity in an individualistic country, there should be an Asset Welfare State as well as the Income Welfare State, with Democratic Capitalism replacing quasi-feudal Dynastic Capitalism, under which some inherit billions while others inherit no capital for all.

    Introduce UK Universal Inheritance for all UK-born UK citizens at 25, financed by reform of Inheritance Tax with abolition of unlimited exemptions and a modest flat rate Capital Donor Tax in combination with a progressive rate Accessions Tax on cumulative lifetime totals of unearned gifted and inherited capital.

    To be fair to adjacent year groups of 25 year olds, introduce UK Universal Inheritance gradually, at £1,000 in the first year increasing annually by the same amount of ten years or so up to about 10% of the average wealth of every adult and child in the UK.

  2. Increasing annually by the same amount FOR ten years or so up to about 10% of the average wealth of every adult and child in the UK.

  3. Susanne MacGregor says:

    The concepts of ‘contribution’ and/ contributory systems’ require clarification since they are being placed at centre stage in current discussions without people seeming to agree on what they mean by these terms. Tax payers contribute through their taxes. Unpaid carers contribute by caring for the young, the old and others in need. Some uses of the term seem to mean self-financed. Others seem to mean conditionality or changing the eligibility rules. Talking of restoring the contributory principle overlooks the fact that our social security system has never really been based on social insurance but has mainly been a flat rate system of contributions and benefits and thus has had to be topped up with means tested benefits.

  4. John Woods says:

    This is the second analysis I have read of Ed’s speech. The first was by Compass. Both reflect the intellectual nature of the argument which, I fear, will pass straight over the heads of the majority of the UK voting population. They just will not understand this level of rhetoric. Tony Blair was not successful because of what he said but in the words he used to say it. Ed Miliband and Ed Balls desperately need to get someone to help them make their argument in words that are meaningful to the people who would vote Labour if they thought they had a better answer to the current economic issues. I know that should not be difficult with George Osborne as chancellor, but the majority of people polled still think the Tories have the best answer to the economy.

  5. Blue Labour is no longer anything to do with left wing politics at all. Every belief has no basis in socialism.

    Blue Labour is entirely a Tory party trying to compete against UKIP, another splinter Tory party.

    Even The Greens sided with the Tories on Austerity Cuts in the one council The Greens rule, Brighton.

    Austerity and Welfare Reform do not help Deficit Reduction nor bring down public borrowing by government.

    The Welfare State bill is rising to pay for all the private companies involved costing hundreds of millions of pounds, whilst half UK’s population is losing all benefit with no other source of income nor realistic chance of work, and all help on below Living Wages, flat-lining wages and wage cuts whilst suffering huge price hikes in food and a doubling of energy bills since 2004, set to steeply rise even further.

    Austerity Job Cuts will be into the hundreds of thousands by 2015.

    Even the loss of state pension at 60 for women and 65 for men and all the other changes depriving even having a state pension after 2016, are bogus.

    The State Pension is deferred wages from our youth and not some generous gift from government to be withdrawn at whim.

    The rightful payout at 60 being lost, means poor women have lost around £38,000 between 60 and 66. The around £5000 a year is the difference between life and death for many thousands. Now many will never get a state pension at all after 2016.

    Every belief in the striver / scrounger dogma is wrong.

    Welfare Reform is not popular with the voter, because there are no voters. There is only a 30% voter turnout for all parties in any election held. Sometime even less.

    There is no such thing as a non-taxpayer, whether in or out of work or however long we live.

    Half a million people now regularly need Food Banks, so the lie that loss of benefits means getting a job is laid bare. Some disabled are even being taught how to forage for food in dustbins.

    Austerity means the end of the welfare state, state pensions, social medicine and leaves the poor to starve as the present government’s parties did with the New Poor Law in the 19th century.

    80% of Austerity Cuts are yet to come to UK.

    This then breaches Moral Government and the basis of political ethics taught by Confucius, that the civilisation of a nation is shown by how its government treats the most vulnerable in society.

    Right now even The Greens and Blue Labour are following the despicable breach of faith shown by the Vicar Malthus, who put forward his philosophy that There is No Point In Feeding The Poor.

    As if anyone could not tomorrow fall into unemployment as any business can go bust, even the largest, or chronic sickness and / or disability by illness or accident render you unable to work.

    Yet each and every person remains a taxpayer from the 75% of Indirect Taxes and VAT on our everyday lives lifelong, with income tax only bringing in 26p in the pound. Proof shown by 5% cut in higher rate income tax in last Budget, yet all the political hype about savings for Deficit Reduction laid bare as false.

    The Ceasars knew better than to leave their citizens hungry. History shows that peasants / working class have always been the engines of changes due to necessity.

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    Recessions Hurts, Austerity Kills, Stuckler and Basu.