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| George Osborne must not be allowed to set Labour’s welfare agenda | George Osborne must not be allowed to set Labour’s welfare agenda |
| (1 day later) | |
| George Osborne (Calling all progressives: help us reform the welfare state, 20 July) challenges Labour to support or oppose his welfare reforms. This is only the most recent example of the skill with which the Conservatives in government have set the terms of political debate. Hence, before the election, to ask “What will you do about the deficit?” was to assume that the deficit is the most pressing economic issue of the day. It didn’t matter how Labour frontbenchers answered this question because, simply by engaging with it, they endorsed the view that what matters most is the thing that the Conservatives seemingly do best. | George Osborne (Calling all progressives: help us reform the welfare state, 20 July) challenges Labour to support or oppose his welfare reforms. This is only the most recent example of the skill with which the Conservatives in government have set the terms of political debate. Hence, before the election, to ask “What will you do about the deficit?” was to assume that the deficit is the most pressing economic issue of the day. It didn’t matter how Labour frontbenchers answered this question because, simply by engaging with it, they endorsed the view that what matters most is the thing that the Conservatives seemingly do best. |
| Similarly, it does not matter to Osborne whether Labour supports or opposes his welfare reforms. He has achieved his aim simply by making it a topic of discussion among the leadership candidates. To answer the question either way is to agree with the position that you must either be the party of work or the party or welfare. The leadership candidates can try to come up with more a nuanced position but it will be lost in the noise of debate. The best thing Labour can do about Osborne’s latest challenge is to ignore it. And the best person to lead the Labour party is whoever can define the big political questions in the next five years.David CarterReading | Similarly, it does not matter to Osborne whether Labour supports or opposes his welfare reforms. He has achieved his aim simply by making it a topic of discussion among the leadership candidates. To answer the question either way is to agree with the position that you must either be the party of work or the party or welfare. The leadership candidates can try to come up with more a nuanced position but it will be lost in the noise of debate. The best thing Labour can do about Osborne’s latest challenge is to ignore it. And the best person to lead the Labour party is whoever can define the big political questions in the next five years.David CarterReading |
| But a living wage, it should be obvious, is based on the cost of living | But a living wage, it should be obvious, is based on the cost of living |
| • The chancellor says we have “a welfare system that has become unsustainable and risks crowding out other areas of government spending”. In fact, for decades welfare spending has risen in line with the overall growth of the economy. This means, in the words of the independent Office for Budget Responsibility, that “the proportion of national income devoted to welfare spending has not shown a significant upward or downward trend over time”. By Osborne’s measure, welfare spending has been “unsustainable” since the 1950s. | • The chancellor says we have “a welfare system that has become unsustainable and risks crowding out other areas of government spending”. In fact, for decades welfare spending has risen in line with the overall growth of the economy. This means, in the words of the independent Office for Budget Responsibility, that “the proportion of national income devoted to welfare spending has not shown a significant upward or downward trend over time”. By Osborne’s measure, welfare spending has been “unsustainable” since the 1950s. |
| The chancellor goes on to say, of the much-ballyhooed universal credit, it “is bringing some sanity to a system David Blunkett described as ‘crackers’ by ensuring that it always pays to take a job or work more hours”. In truth, the rollout of universal credit is far behind schedule, and the repeated raiding of its budget by the Tories will make it significantly less effective than it could have been. The Tories have also reduced the work allowances in a way that the Institute for Fiscal Studies says “will reduce the incentive for the first earner in a family to enter work”. | The chancellor goes on to say, of the much-ballyhooed universal credit, it “is bringing some sanity to a system David Blunkett described as ‘crackers’ by ensuring that it always pays to take a job or work more hours”. In truth, the rollout of universal credit is far behind schedule, and the repeated raiding of its budget by the Tories will make it significantly less effective than it could have been. The Tories have also reduced the work allowances in a way that the Institute for Fiscal Studies says “will reduce the incentive for the first earner in a family to enter work”. |
| The Blunkett quote, taken entirely out of context, comes from 2005. Blunkett was specifically describing the disability benefits system which the Labour government was then in the process of reforming. The sophistry continues as the chancellor seeks to justify his massive cuts to tax credits by saying that his “national living wage will ensure you get a decent day’s pay”. But a living wage, it should be obvious, is based on the cost of living. A higher minimum wage, which is what we’re really talking about here, is welcome in itself but won’t come near compensating for the coming raid on tax credits. The IFS has shown that it is “arithmetically impossible” for the sums lost to working families due to the tax credit cuts to be recouped by the higher minimum wage.Emily Thornberry MPLabour, Islington South and Finsbury | The Blunkett quote, taken entirely out of context, comes from 2005. Blunkett was specifically describing the disability benefits system which the Labour government was then in the process of reforming. The sophistry continues as the chancellor seeks to justify his massive cuts to tax credits by saying that his “national living wage will ensure you get a decent day’s pay”. But a living wage, it should be obvious, is based on the cost of living. A higher minimum wage, which is what we’re really talking about here, is welcome in itself but won’t come near compensating for the coming raid on tax credits. The IFS has shown that it is “arithmetically impossible” for the sums lost to working families due to the tax credit cuts to be recouped by the higher minimum wage.Emily Thornberry MPLabour, Islington South and Finsbury |
| • The chancellor’s statement that the government’s welfare reforms will help “create the higher wage … economy our country needs” is at odds with previously declared government policy, which favours a low-labour-cost economy. UK Trade and Investment (UKTI), the government agency responsible for attracting investment into the country, openly markets the UK’s low labour costs as an inducement to foreign investors. In its promotional brochure “Invest in the UK: your springboard for global growth”, UKTI specifically states that “Labour costs are the most competitive in western Europe”. An accompanying graph illustrates the UK as having, in 2013, labour costs lower than seven other EU countries, including France and Germany, whose labour costs are more than 50% higher than the UK’s. Furthermore, the report boasts that the UK’s national minimum wage “rates are lower than in France, Ireland and the Netherlands”. | • The chancellor’s statement that the government’s welfare reforms will help “create the higher wage … economy our country needs” is at odds with previously declared government policy, which favours a low-labour-cost economy. UK Trade and Investment (UKTI), the government agency responsible for attracting investment into the country, openly markets the UK’s low labour costs as an inducement to foreign investors. In its promotional brochure “Invest in the UK: your springboard for global growth”, UKTI specifically states that “Labour costs are the most competitive in western Europe”. An accompanying graph illustrates the UK as having, in 2013, labour costs lower than seven other EU countries, including France and Germany, whose labour costs are more than 50% higher than the UK’s. Furthermore, the report boasts that the UK’s national minimum wage “rates are lower than in France, Ireland and the Netherlands”. |
| I’d be interested to see how UKTI now accommodates the government’s new concern for a higher-wage economy.Neil HornsbyInverness | I’d be interested to see how UKTI now accommodates the government’s new concern for a higher-wage economy.Neil HornsbyInverness |
| The government spin is that the benefit bill is unsustainable. The reality is very different | The government spin is that the benefit bill is unsustainable. The reality is very different |
| • Osborne uses the statistic that with 1% of the population and 4% of GDP, a benefit bill of 7% (of GDP) is unsustainable. However, it strikes me that the remarkable statistic is not the benefit bill but that with just 1% of the world population, we have 4% of its GDP. It reminds us that – we are a very rich nation. There is a narrative forgotten by most senior politicians that we can afford to care for the more vulnerable in society. As a taxpayer, I give Osborne the permission to use my taxes to support the financially poor and their blameless children.Dr Karl BrennanSheffield | |
| • Osborne asserts that independent forecasters predict that once the lowest-paid workers hit a living wage of £9 in 2020 six million other workers will have seen their pay rise on the ripple effect thus created. However, there is no such ripple to be had when you are tied to a 1% a year rate increase. Frontline public-sector workers, in positions of some responsibility, currently on perhaps £8.50, will by then have fallen below the minimum wage. No doubt Mr Osborne will fully support the unions in their industrial action as they seek to restore wage differentials. Lawrence WilliamsWelwyn, Hertfordshire | |
| • The government spin is that the benefit bill is unsustainable. The reality is very different. A report released last month shows an estimated £580m jobseeker’s allowance went unclaimed in 2013-14. Added to this an estimated £2.5bn in unclaimed pension credit with a take-up of 61-64%. £3.6bn of housing benefit is estimated to have gone unclaimed, showing why so many struggle to pay rent. Council tax reduction was not included as it is administered by councils. Nor were disability benefits. What is needed is a mass take-up campaign rather than demonising benefit claimants. The real villain is the government.Gary MartinLondon | |
| • Javed Khan of Barnardo’s (Letters, 20 July) rightly points out many of the punitive cuts for families with children to be found in the new welfare bill. Less obvious are the cuts in universal credit as most people know little about this benefit. Reductions to child elements and to work incentives and income tapers will make this a benefit of stick without carrot. Interesting from the party of working families.Alison RooksShipley, West Yorkshire | |
| • One way in which the chancellor could save millions would be to close the Department for Culture, Media and Sport. There are four arts councils and a sports council so why is this department necessary, especially as it is staffed by civil servants who know nothing of the arts etc? Closing the department would in the long run save millions.Elizabeth OwenLlandudno | |
| • The letter above from Alison Rooks was amended on 23 July 2015 to correct the spelling of Barnardo’s. |
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