Can Miliband win on welfare?

In his almost three years as leader of the Labour party, Ed Miliband has faced repeated criticism that he lacks coherent, concrete policies. The din has grown louder as 2015 approaches, and it has spread to parts of Miliband’s own party. He and his team will hope that his speech today at Newham Dockside puts those charges to rest. After three years of prevaricating, he’s throwing a manifesto’s worth of policies at the wall in one go.

These policies are being billed as the party’s “One Nation plan for social security reform.” They mark Miliband’s first genuine attempt to dispel the belief that Labour is weak on welfare and the economy. There is widespread feeling that the Labour governments of 1997 to 2010 helped foster a culture of welfare dependency, and in turn rising welfare costs.

Today Miliband will announce that a Labour government would cap structural spending on social security, starting in 2015/16—a significant change of course. (Structural spending relates to the long-term causes of social security spending, as opposed to the cyclical costs that are higher when the economy is weak.) It is a clear attempt to demonstrate that Labour has abandoned the profligacy of boom times: as Miliband will acknowledge, “the next Labour government will have less money to spend” and “will have to be laser focused on how we spend every single pound.” Such words are an implicit admission that his predecessors did not take such care.

If this message doesn’t sound wholly original—it is, after all, broadly similar to much of the rhetoric of the current government—then Miliband will remind us all that he still has his “One Nation” hat on. It is not enough to reform social security, he will insist—“only by reforming social security with the right values” can costs be controlled. What exactly are these right values? The principles are clearer than the specifics.

When it comes to housing benefit, Miliband does not want a cap (unlike the current government). Instead, he will promise that savings can be made by negotiating lower private rents with landlords. It is an appealing idea, but it would have to be carried out on a huge scale to have much of an impact. When rents fall, Miliband’s argument goes, dependence on housing benefit will drop with it, and some of the money saved can be spent on building new homes. Few doubt that more building is needed, but this is not the clear action needed to resolve the housing crisis (see Simon Jenkins’s article in the current issue of Prospect). This emphasis on rents, however, does distinguish Labour from the current government, and from the angry backlash that the recent cuts to housing benefit have had in certain quarters.

On low wages, Ed will say: “We can’t afford a low wage economy that just leaves the taxpayer facing greater and greater costs.” If people are paid a living wage, the taxpayer need not subsidise their extra living costs, goes the argument. But how to guarantee a living wage without legislation? Again, the solution does not quite convince: employers will be encouraged with grants. The intention is to show that traditional Labour policies don’t have to bankrupt Britain. Whether voters will buy that is another matter.

More importantly, Miliband is trying to convince the public that he stands for something that Labour is believed to have lost. He will stress that Labour is “the party of work”—a point that should not have to be made, but has indeed become necessary. Labour was “founded on the principles of work,” and some of the initiatives announced today (a compulsory jobs guarantee, improved tests for disability benefit) seek to make Britain “a nation where people who can work, do work.”

And when people become unemployed, Miliband will promise, they can no longer expect the same treatment. Whereas at present everyone is entitled to £71 a week of jobseeker’s allowance if they have worked for two years, a Labour government would restore the contributory principle (whose abandonment Philip Collins laments in our cover story). There would be a longer period of qualification for some claimants, while those who had worked for many years would be entitled to more support. Here, Miliband is clearly trying to draw a line between his leadership and the “something for nothing” culture that New Labour is accused of fostering.

Miliband is playing a tricky game. His greatest challenge is to convince voters that they can trust Labour to spend within the country’s means, and this speech is an important move in that direction. But the scant specifics still open him up to Tory attacks, while the mooted changes to jobseeker’s allowance and disability benefit won’t endear him to the left of the party. Still, Ed Miliband now has a plan. Sort of.