It was Alan Watkins, the former Observer and Independent columnist, who coined the phrase ‘politics is a rough old trade’. This week has been an example of it. Under constant pressure for months that it had no new policies, Labour produces some and is instantly denounced because it isn’t exactly the same as what was said before.
Mr Ibiza’s attack on Ed Miliband at PMQs (or should that be Questions to the Leader of the Opposition, as David Cameron never answers any himself) about child benefit is a case in point. Labour supported universalism before, and now will not prioritise giving child benefit back to people on higher incomes. So it is ‘flip-flopping’ and ‘indecisive’ – or betraying the welfare state, whichever you prefer.
Earlier this week, we suggested looking behind the headlines about Ed Balls’ speech on the economy. Despite the universal focus on his proposal to withdraw winter fuel payments from more affluent older people, there was real substance in the speech and we highlighted the parts relating to housing investment.
Something similar has happened with Ed Miliband’s speech today on welfare, which, if media comment is the guide, was solely about putting a cap on benefits. Reading the speech as a whole, the core message was about twin issues of worklessness and low pay and the fact that the taxpayer picks up the costs of failure in both. He pointed out that the growth rate of social security spending was higher under Thatcher/Major than under Blair/Brown because of their failure to provide jobs. ‘There’s nothing in Labour values that says that this is a good way to spend tax-payers’ money’, Miliband said, and ‘Britain just can’t afford millions of people out of work.’
In housing terms – and it’s encouraging to see housing feature in a big way in speeches from the Leader of the Opposition and the Shadow Chancellor in the same week – Miliband argued that it is the failure to build enough homes that lies behind the rapid rise in housing benefit.
And he highlighted the policy direction that is causing a lot of excitement at the centre of the Labour Party: ‘We can’t afford to pay billions on ever-rising rents, when we should be building homes to bring down the bill. Thirty years ago for every £100 pounds we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit. Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit. There’s nothing to be celebrated in that.……. let me be clear: any attempt to control housing benefit costs which fails to build more homes is destined to fail.’
The specific proposal he talked about was this: individual private tenants struggle to negotiate with landlords on their own; councils believe that they can achieve significant savings by negotiating with tenants on their behalf, so they should be given stronger powers to do so. So far so good, but the interesting part of the proposal is the incentive: councils that make savings in HB could keep some of the savings to invest in building new homes. This is a good example of the creative thinking that is currently taking place within Labour to deliver the principle of switching from financing benefits to supporting investment.
So, once more, there is more substance in the speech than is suggested by the headlines. And, to join things up, switching subsidy from benefits to investment would be a terrific way of delivering a cap on benefits.