Crony capitalism, stealing Russia and the prophet Sedarisby Prospect / March 20, 2012 / Leave a comment
Published in April 2012 issue of Prospect Magazine
Winning the welfare war
Peter Kellner (“A quiet revolution,” March) paints a picture that no MP in touch with constituents would doubt. Public opinion is on the move, and I welcome the change in views. But Kellner opts for greater means-testing as the only option. The alternative is to rebuild an insurance-based welfare.
Means-testing is seen by many of my constituents as an attack on their moral economy: people are rewarded because they can claim need and not because they contribute. It is difficult to overestimate the impact of Labour’s dance with means-testing on our supporters.
The government’s strategy of a universal credit is no more than a frenzied version of that of Gordon Brown, and is likely to blow apart on day one. Labour’s task is to set out an alternative vision of a “something for something welfare state,” and set out the initial steps to achieve this long-term objective.
The electorate won’t vote for tax increases but the selfsame voters do not see national insurance contribution increases as tax increases. Labour needs to set out an alternative route. I believe the electorate will wish to buy in to this vision providing we ensure that the new insurance scheme is owned by them, and not by the treasury.
Frank Field MP
Housing costs and benefits complicate the welfare picture. It is hard to get a room in a flat in London for less than £140 a week. Then add £30 for travel, £10 for council tax, £15 for lunch money—there’s not much left from £200. Working 40 hours a week at minimum wage pays around £250, minus tax, plus tax credits (soon to be reduced). This all adds up to about £260 a week—compared with about £210 on Jobseeker’s Allowance and housing benefits. An overall gain of fifty quid is not much to motivate anyone out of unemployment, is it?
Think the unthinkable
All three mainstream British parties are committed to the free movement of labour within an ever-expanding common market. New Labour opened the gates to cheap labour, not realising that this would undermine faith in the welfare state (David Goodhart, March). As for Conservatives, the lure of cheap labour blinded them to the economic burden of a growing underclass. Yet across the political spectrum there is an unwillingness to acknowledge that a necessary condition for getting the chronically unemployed off benefits is a rise in the minimum wage. Simply curtail immigration and unskilled pay will rise. Nothing less than the unthinkable, namely a British opt-out from the EU accord on the free movement of people, will do.