The Benefit System, Welfare to Work

Future welfare reform – Miliband’s welfare speech

Future welfare reform – Miliband’s welfare speech

One of the reasons welfare reform under this Parliament has been so radical is that the implementation of policy will extend beyond 2015 (most notably, the Universal Credit will not be fully phased in until 2017). If Labour form the next government (even in coalition) then it shall have to decide whether or not it shall repeal any aspects of the Coalition’s welfare reforms. It is thus important news that Miliband recently made a speech on social security policy. Recent speeches have attempted to address Labour’s perceived weaknesses as being unfit to run the economy and soft on welfare. This speech is the latest in many statements that hope to address one of Labour’s main polling vulnerabilities[1].

The speech hoped to combat accusations that Miliband’s leadership is a policy-free zone by translating principles into concrete policies. One such articulation was made of Miliband’s stated commitment to work. His speech criticised the Work Programme for not tackling long-term worklessness and claimed that a better policy would be a guaranteed job scheme. Such a scheme would guarantee a job of at least 25 hours a week (paid for by the taxpayer) for young men and women who have been out of a job for longer than 12 months. He claimed (as he has done so in the past) that a tax on banker’s bonuses would fully fund this program, though did not provide precise figures.

Miliband also said that a Labour government would consider increasing the level of Jobseeker’s Allowance for unemployed people who have ‘paid into the system’ for many years. This was another key aspect of the speech: balancing universality in welfare against the contributory principle and means-tested welfare. Many advocate universality in welfare (such as universal child benefit) though others oppose universality and instead support means testing welfare (due to the pressure on public money) or the contributory principle (here). As well as supporting a greater contributory element in the welfare system, Miliband stated that a balance had to be struck between universality and means testing. The government has brought in means-testing for child benefit recently due to the pressure on public money. Both Miliband and Ed Balls have stated that a future Labour government will not re-instate child benefit for high earners due to the fact to do so would cost £2.3 billion[2][3][4].

There has been some confusion over whether a future Labour government would cut winter fuel payments for wealthy elderly couples. Miliband claimed that it “didn’t make sense” to continue giving Winter Fuel Allowances to wealthy pensioners and therefore they would withdraw it from affluent pensioners, saving around £105 million. This was a policy that the Shadow Chancellor, Ed Balls, has also supported in recent speeches[5][6]. To many, this seems advocating means-testing universal benefits, though a senior Labour source told PoliticsHome that universality remained ‘part of the bedrock’ of the welfare system and that Labour’s position ‘has not changed’[7][8].

Miliband’s speech hoped to prove that “controlling social security spending and putting decent values at the heart of the system are not conflicting priorities”. The flagship policy that sought to control welfare spending was a proposal to cap non-cyclical social security spending in three year cycles[2]. He argues that this would enable departments to plan ahead and set a clear limit in which social security spending is allowed to operate (preventing large increases in welfare spending).

Reaction from official Conservative and Liberal Democrat sources were negative. Conservative party chairman Grant Shapps claimed that the speech was vacuous and demonstrated Miliband was too weak to take tough decisions[2]. Nick Clegg claimed that Miliband had performed a spectacular u-turn and now supports policies (such as withdrawing child benefit from high earners) that he has spent the last three years vilifying[2]. Clegg has also said that he supports withdrawing pensioners from wealthy pensioners, saying that he will also block further reforms if they are not reduced[9][10]. Reaction from the left was mixed, with some, such as Guardian colunist John Harris, claiming that Miliband had shifted too far to the right, whereas others, such as Labour MP Frank Field, claimed that it was the first step in the “long track back to sanity”[11].


  • What is the appropriate balance between universality and contributory principles in the welfare state?
  • Will a three year cap on non-cyclical welfare spending force governments to look at long term decisions or is it a needless complication that will make matters worse?

Miliband’s speech


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