1. Tax on bankers’ bonuses to fund compulsory workfare for long term unemployed for whom 10 out of the 25 hours of work would be training. If the work is not accepted, the workless person would lose benefits.
2. Require parents whose youngest child is three or four to attend Job Centre, have training and learn about job opportunities. But these parents would not be required to seek work. (It sounds as though he is mostly thinking about lone parents.)
3. He would ‘look at’ requiring contractors for central government to pay a ‘living wage’.
4. Give local authorities power to negotiate lower rents paid to ‘social landlords’. The money saved would be used to build more housing.
5. The age at which people retire ‘will have to increase’.
6. “It doesn’t make sense to continue sending a cheque every year for Winter Fuel Allowance to the richest pensioners in the country.” So presumably he proposes to cut this.
7. Workers should be employed for five years instead of two to qualify for contributory benefits which should be higher.
8. “Extra” help for older workers who lose their jobs to get back into work.
9. “Examine” ways to recognise the work of mothers looking after young children or people looking after elderly relatives.
10. Three year spending reviews of social security spending and a cap. He referred to long term rises in structural unemployment and housing benefit. No indication of how the cap would work.
11. If in government now, would raise top rate of tax to 50% and use money to improve tax credits for those in work.
This Labour Party package clearly does not represent a serious re-think of welfare and in some cases it would make matters worse. Effectively enforcing a ‘living wage’ for government contractors would be a partial creation of a new, higher minimum wage. This would cause unemployment and increase government costs, making the deficit worse.
The idea of allowing local authorities to negotiate rents with social landlords to reduce rents would seem to have several problems attached to it. By taking the individual out of negotiating for the accommodation, the local authority would surely reduce the choice of the individual. Effectively, the local authority would do a deal with big landlords and the individual would be told, ‘if you don’t like it, bad luck’. He or she would have no direct recourse to the landlord. Presumably there would also be a new layer of local authority bureaucracy which would have to both negotiate with landlords and then allocate tenants to them. Has the cost of this extra bureaucracy been taken into account?
Mr Miliband put this in the context of making housing more affordable. He said that the savings made would be put into building more housing – presumably more social housing. The idea that this money would make any significant difference to housing affordability in Britain is patently absurd. Yes, housing affordability is a major problem. This proposal shows he is not taking it seriously.
The ‘workfare’ idea for those who are long-term unemployed is not completely without merit. But the idea that 10 hours out of 25 should be training betrays a failure to have looked in detail at this area. The company that can offer work may not be in the best place to offer training. In any case, in many basic jobs, not much training is really needed. The real need for long term unemployed is often more to do with things like illiteracy, drug habits, lack of confidence and so on.
The reference to a spending cap on welfare benefits is the most bizarre aspect of his speech. How would he ‘cap’ the spending? Would there be cuts? If not cuts, then what? He seems to want to get the credit for controlling spending on social security without doing the hard part of telling us how he would do it.
Some of his ideas would actually increase spending – the living wage, higher contributory benefits and workfare.
It just does not add up.