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Welfare cuts: the other Miliband strikes a better note



David Miliband clearly believes Nye Bevan's adage that the language of priorities is the religion of socialism
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Is it time for David Miliband to add his heft to an under-punching shadow cabinet? Photograph: Christopher Thomond for the Guardian


An evidently warm-hearted Guardian reader came up to me at a conference on Tuesday and asked why Britain currently has such a feeble opposition. The question was not unkindly meant, so I answered in the same spirit. "It's hard to get a hearing when voters still remember your own mistakes in government, especially so when coalition ministers keep pointing out that many of the policies you now attack are ones you introduced when you were ministers."

Cheer up, I have some modest words of encouragement and my provisional verdict is not intended to encourage those who say – as some do – that "all politicians are the same" which is such a dull, stupid and revealing observation.

What it shows most clearly is the people who say it in the pub or write it online (imagining they are as brave as a Chinese dissident) aren't much affected by government policy changes. They're middling sort of people who don't have a chronic illness or an elderly parent and whose marginal tax rates vary only slightly. There are plenty of them and they jog along happily enough, moaning about scroungers until something dreadful happens to force a rethink.

The rich and the poor, not to mention members of the "squeezed middle," are too smart and too close to the ground to make that mistake. They know about changes to marginal tax and benefit rates all right. They know about school places and disability allowances, they even know about council tax relief on second homes because we learned only last week that the Sultan of Brunei is not the only chap with a spare house on Hyde Park's Billionaire's Row to claim it.

Caitlin Moran, the talented Times columnist, once wrote a brilliant piece about growing up in a workless household – ever fearful that "they" would cut your benefit again. Some dreadfully unfair things are happening to people we all know, just as some pretty dodgy payments are still being made too. When IDS says he wants to stop winter fuel payments to people living near Mediterranean beaches it's hard to disagree, isn't it?

So where does that leave Labour after last night's vote against the government's latest welfare benefits uprating bill, the second reading of which was passed by 324 votes to 268? It's the bill that caps a wide range of benefit increases at 1% and caps overall benefit at £26,000 per household – roughly the average – all this on top of the tapered child benefit removal for higher earnings which has just come in.

Should Labour have voted no last night, knowing that the Tories will now pander to public prejudice against "shirkers" to say that Ed Miliband – whose old patron, Gordon Brown, and his sorcerer's apprentice, Ed Balls, created such a large and complex tax credit system – is soft on fraud and scroungers? On balance probably yes, though it is not an easy decision for anyone who understands the dilemma facing western social security systems in the Asia-focused world that is now emerging.

You can read the debate here - and Simon Hoggart's waspish verdict here – an event in which IDS, current work and pensions secretary, and Liam Byrne, a Labour cabinet veteran, tore strips out of each other in a nit-picking way (can baldies have nits? Not in my experience). It's not inspiring because both sides make valid points to justify their own conduct – past and present – while attacking the other side's position.

It's a bit like Cameron and Clegg picking their way through the minefield of coalition policies they agree about, ignoring the contentious bits as best they could, during this week's No 10 press conference. It's tedious and fairly futile, but as Simon Jenkins – a wise old Tory pessimist – points out in today's Guardian it's what the voters voted for in 2010 and the best option for the country at the time. Don't write off Clegg, he added.

Dozens of outraged columns have been written to warn that the child benefit reform that hits the middle classes marks the end of the welfare state conceived by the Liberal social reformer William Beveridge in the dark days of the second world war when universal winter fuel payments were not an option in German-occupied Mediterranean beach resorts.

Aditya Chakrabortty wrote a spirited version of it here in yesterday's G2, a verdict which would probably have surprised Beveridge given the size of today's welfare state, which has grown for most of the past century – to the point where it is costlier than we are prepared to finance through taxes. Here's a good (slightly out of date) bit of context from the LSE.

Should the coalition be cutting welfare at all, or so fast, or in the way it proposes to cut, so that rhetoric focused on "shirkers" and "scroungers" actually hits the working poor almost as hard as it hits the workless, most of whom would love to have a job anyway?

That's where the nitty-gritty detail starts to get complicated. In his speech – you can find it here again – Liam Byrne argued that coalition macroeconomic policies have been too deflationary, so that growth is stunted and the welfare bill has actually gone up by £14bn since 2010.

But he also conceded – you'll find it at column 193 – that something must be done to curb it and listed various ideas which he and Ed Balls have come up with, including a benefit cap in some parts of the country (that's regional pay policy, isn't it Ed?), a slower benefit uprating and much else designed to show Labour has some constructive ideas for helping/cajoling people back into work and cutting the welfare bill.

That's all good, if complex, stuff. But it sits ill with rabble-rousing denunciation that usually dominates such speeches or appearances on Radio 4's Today programme. As I told my nice Guardian reader at Tuesday's conference, it's a particular problem for Balls because he is so powerfully associated with Gordon "McCavity" Brown's flawed record in office (he did plenty of good things too) and comes across as aggressively unrepentant.

Until Balls finds a new tone of voice (or a new job), Labour will be wasting its time, I told her. As for Liam Byrne, no such exchange comes without some eager Tory MP – it happened again on Tuesday – reminding him of the note he left David Laws, his coalition successor at Treasury No 2, about there being "no money left". A chirpy sense of humour can be a dangerous thing. It will haunt Byrne forever.

But I persist in believing that the right tone, the right balance, can be found. Ministers still blame Labour for the 2008 recession that caused the shocking 6.3% fall in GDP (most of it still not recouped by renewed growth) more than they blame the bankers who are the prime culprits. There is also disquiet – among Tory ministers and campaign strategists as well as voters – about the shirker rhetoric which the tax-avoiding newspapers always overdo.

Even the FT today reports the disquiet along with a warning that IDS, whose hands are currently full with his ambitious (too ambitious?) universal credit scheme, will one day try again to get Cameron and George Osborne to squeeze the benefits – winter fuel, free TV licences, bus passes etc – of better-off pensioners.

In theory it will be further proof for Aditya that Beveridge's principle of universal benefits, buttressed by solid political support in all classes, has been fatally undermined. As someone who gets these perks – albeit not in the Sultan of Brunei's league – I have to concede IDS is right in practice, whatever the theory. We can no longer afford it all. Targeting the needier (something Gordon Brown also got right) is the way forward.

In his lively column today, the Guardian's Seumas Milne argues rightly that benefit fraud is minute compared with an alleged £70bn worth of tax evasion . A good point, as are several of his ideas for stimulating jobs and growth. Even the coalition is gradually focusing on some of them.

Yet with typical efficiency, the Stakhanovite Simon Jenkins (he chairs the National Trust between columns) puts it more forcefully in last night's Evening Standard column: Jenkins pointed out that rich Londoners who once paid £8,000 a year in rates now pay £2,000 in council tax while smaller householders pay more and more.

That's only part of the picture and it was restated this week that London and the south-east pay the bulk of UK income tax. But it smacks of gross unfairness. Alas, yet again – Labour in office failed to tackle the flaws in the council tax regime cobbled together under John Major after the Thatcherite poll tax disaster. It's easy to see why they had other priorities at the time, but that's what makes it so hard to get traction on the issue from the opposition benches.

Let's end on that cheerier note I promised. David Miliband, Labour's ex-future leader, intervened in yesterday's welfare debate. Again you can find it here – starting at 3.42pm in column 216 – and note that his opening premise is that all western societies must "refashion their social contract" to reflect a changing world. He means older populations at home and the rising economic power of Asia abroad.

British politicians can't do much about either of them, but both facts make life tougher and require hard choices. Miliband proceeded to denounce the coalition as effectively as any of the leftwing critics who routinely denounce him as a stooge, on grounds of fairness – the "inequality of sacrifice" between rich and poor – affordability "I am happy to debate priorities" - and the politics of what he called "rancid" divisiveness of coalition rhetoric. The tone is good, the authority real, as Tory MPs spotted.

Miliband senior is unlikely ever to lead Labour now, but I read somewhere that he and his younger brother exchanged Christmas presents this year, small ones (wine for a book), but it's the thought that counts. If I'd not been speaking to the Guardian reader at the very time when DM was on his feet I'd have drawn her attention to the speech. Perhaps it's time for him to add his heft to an under-punching shadow cabinet.

Priorities, that's the real and honest debate. Didn't someone – Nye Bevan? – once say the language of priorities was the religion of socialism?

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