The Winter Fuel Allowance cut sets the stage for two major tests for Labour


8:50 am - June 4th 2013

by Sunny Hundal    


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The decision by Ed Balls yesterday to ditch Winter Fuel Allowance for the top 5% of pensioners has two major political consequences.

First is the ‘what would you cut?‘ test. In the past, Tories have constantly taunted Labour at PMQs and elsewhere with that question when Labour talk about the economy.

It’s a tricky one for Labour because polls continue to show (despite Labour opposition to austerity) that most voters think they are necessary and more blame Labour than the coalition for them.

If Cameron asks the question now, Labour can turn around and say ‘we would cut benefits for rich pensioners, will you?‘. After all, 74% of Brits support cutting it.

The test is to see if it shuts down that line of questioning or whether the Tories carry on regardless. I suspect the latter.

The second big test is to see if the public respond to Labour’s new position. Here, I’m more sceptical.

Voters rarely pay attention to Westminster debates. Plus, I don’t think Labour’s economic credibility problem is to do with voters wanting the party to make cuts, but to demonstrate they’ve learnt from the financial crisis that happened under their watch.

But lots of other people on the right of the party say that unless Labour promises cuts, voters won’t trust them with the economy.

Well folks, you’ve got a politically massive cut to spending, and one that hits voters most likely to vote. Let’s see if this restores some economic credibility. If it doesn’t then people on the Labour Right may need to assess their assumptions.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Story Filed Under: Blog ,Economy ,Labour party ,Westminster

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Reader comments


Q: what would you cut?
A: something worth 0.1% of the deficit.

Woohoo!

2. Luis Enrique

but that’s so feeble. We’re going to stop giving a tiny amount of money to a small set of people who blatantly won’t miss it, but where we had previously thought means testing not worth the bother. POLITICALLY MASSIVE. TOUGH DECISIONS.

3. Luis Enrique

can anybody can come up with a less impressive answer to the question: what will you cut?

@3 ministerial biscuits?

@4 There probably is some savings to be made there, I recall reading in the papers about Eric Pickles 10k annual biscuit bill…

6. andrew adams

If Cameron asks the question now, Labour can turn around and say ‘we would cut benefits for rich pensioners, will you?‘. After all, 74% of Brits support cutting it.

The test is to see if it shuts down that line of questioning or whether the Tories carry on regardless. I suspect the latter.

There are two problems with this line of reasoning. Firstly, saying “Labour will cut benefits for rich pensioners” obviously won’t shut down that line of questioning, the amount saved is far too small to make any real difference. Luis Enrique has it entirely right above – it’s a pathetic, laughable answer.

What’s more, by giving that answer Labour would just be buying into the Tory narrative that the deficit was primarily caused by excessive spending and the only way to address the problem is by through spending cuts. If they do that they will lose because the public will always believe (because it’s true) the Tories have more appetite for cuts than Labour. They need to try to shift the narrative, to make it clear that the priority should be to stimulate demand in the economy, that austerity isn’t working here or anywhere else.

Yes, that may be a hard sell and it means challenging the simplistic way the economic arguments are framed by the media (it’s not just the right wing press, the BBC is just as bad) but they can point to the fact that the Tories’ strategy is not working and the deficit is not coming down at the moment.

7. Shatterface

Q: what would you cut?
A: something worth 0.1% of the deficit.

That 0.1% will be wiped out by the administrative costs of determining where the money where it is needed.

People aren’t going to means test themselves.

So New Labour will piss money up the wall rather than risk someone might get something they don’t need – and in order to determine what they need there’ll be more State intrusion into the lives of people who think they’ve lived long enough not to have to put up with that shit anymore.

8. Baton Rouge

I would say that if Ed Milliband still harbours any ambition of being Prime Minister he’s going to have to Sack Balls (let’s start that campaign) and distance himself from his benefit cutting antics.

Oh great. Triangulation. It worked out so well last time.

If Labour are only content to match the Tories on the need for savage cuts, then they will need to make savage cuts, this little move will, quite rightly, impress no-one. If you think the ‘what will you cut’ question will be stopped by this little mischief making you are deluded. The Tories are attempting to dismantle the welfare State, piece by piece and NOTHING will deflect them from that. In fact letting Labour do the spadework like this, only speeds up the process, and they are playing you for fools.

If you start of with the premise that you want to cut Winter fuel payments, you would start at the edges and work your way in, that is exactly what the Tories want, but never had the balls to carry it out, and will now claim they have been bounced into it. Just like the chess Grandmaster, look at the position after a flurry of pawn exchanges and a couple of rook swaps, not the position beforehand.

After all, 74% of Brits support cutting it

And there it is, the Left’s entire folly written down in big friendly letters. you know what, Sunny, have you looked at polls regarding deporting terror suspects to the USA and Jordan? Have you looked at the polls concerning scrapping the human rights act? Have you looked at polls regarding, well just about every campaign we have ever run since about 1981? So many places (not all) where the Left used to be out in a limb are now mainstream ideas.

Where were the public thirty years ago on racism or gay rights?

Had you visited any football league ground in the Country thirty years ago, no doubt your ‘74%’ of the crowd would be monkey chanting John Barnes, it didn’t make Labour’s stance wrong, it made it unpopular, but it was never wrong. No doubt good candidates lost winnable seats being on the side of ‘poofs and darkies’, but it didn’t make them wrong, it just meant we had to fight harder to get our message across. You know Sunny, public opinion just did not spontaneously change regarding these and dozens of other issues, people campaigned and campaigned hard in often dangerous situations for what is right.

Sometimes you have to stand up for something that is right, a principle that reaches to the heart of everything we stand for, for example. The welfare State should be available to everyone when they need it, not just when we can sell it to people that it is right. I would rather defend a rich pensioner’s right to WFA than do the Tories dirty work for them.

Lawyers and welfare advisers inthis area will have had ample evidence of failures by parts of the benefit system.

Ironically winter fuel payments are one of the parts of the complex system that work well, along with attendance allowance,old age pensions and industrial injuries benefits and a few others.

The benefits which experience most problems for claimants and advisers are those which have been specifically created in the last 25 years, i.e. those created by the last two Conservative Governments ( the third term of Margaret Thatcher’s Premiership and that of the last Conservative Government led by John Major i.e. the period 1987-1997) and which were subject to repeated amendment rather than proper reform by New Labour between 1997-2010).

The Welfare Reform Act 2012 has worsened the situation in a number of ways adding further complexity and removing key protections from claimants.
The seven lean years of benefit thinking and their results which are some of those set for reform are:

Housing Benefit – created 1987
Income Support – created 1987
The Social Fund – created 1988
Council Tax Benefit – created 1993
Job Seeker’s Allowance – created 1995

With this set of benefits can also be included the system of tax credits, introduced between 1998-2002. Tax credits have become problematic, particularly with the problem of overpayments.Disabilitybenefits have also become nightmarishwith the government’s policy of testing all claimants using outsourced foreign companies such as ATOS.

These benefits are the ones are subject to an on-going reform, with the Government aiming to consolidate them in a new benefit system known as Universal Credit, currently planned to be phased in between autumn 2013-2017.

All the means tested benefits have become notorious for their bureaucratic complexity and the problems associated with them. Aside from the question of adequacy, many problems arise from the complexity of welfare rules and regulations adopted from 1987 onwards and the abolition of rent control by the Housing Act 1988 which has meant that the sums spent on housing benefit have escalated enormously. In most discussions of the welfare state the distortion of housing benefit has been ignored or minimised; and the ultimate recipients of the money i.e. landlords and companies renting property is seldom discussed along withthe role of some inter-continental fraudsterswhomusthave intelligent links in the UK.

Whatever the fine detail of the planned Universal credit, certain principles of administration will remain, as will the tribunal system and court system. Universal Credit aims to consolidate a number of income related benefits. If it provides an adequate amount for housing and council tax it may succeed. But if housing and local taxation costs are not fully covered then it will create debt and resultin an increase in poverty with knock on effects for the rest of society.

That’s presuming thatthe Universal Credit computer system will work. If it does it will be one of the wonders of the world. If not…..

Sunny: “polls continue to show that most voters think they are necessary and more blame Labour than the coalition for them.”

But the public are wrong! Austerity isn’t even cutting the deficit! I appreciate this is a terribly anti-democratic and elitist thing to point out, but I am afraid it is the case.

Even accepting the “they want it, so give them it” argument, Labour have come up with a cut so tiny, lame and transparently unlikely to save any money at all that I think austerity supporters will read it as a direct insult to their intelligence.

To me this looks just such a mess that it cannot be a planned strategy to woo voters, but more the result of a deadlocked power struggle inside the Labour Party between pro-austerity and anti-austerity factions.

The comprehensive beating the whole thing received on the Today programme was frankly embarrassing.

13. jan jesson

the bill for admin and development of universal credit has increased by 10billion to 12.2 billion and rising. or rather, the bill for administering the failure of universal credit – as predicted at the outset. this isn’t the bill for benefit payments – just the administration. astronomical. also failing – ATOS, workfare, bedroom tax. IDS’s flagship welfare reforms are disastrous, especially for disabled, but also children, the elderly, the unemployed, workers on low pay… everybody…

the WFP to the rich could be recouped through the tax system, leaving the important principle of universality intact- there’s evidence that poor pensioners who qualify for means tested benefits are not claiming them because of the ‘scrounging’ stigma and because they believe the country can’t afford it. i know two elderly women,84 and 79 one of whom is severely disabled who would consider doing just that. they are not rich – worked in low paid jobs all their lives – now free of worry about bills for first time ever thanks to pension credit. Just paid a £600 gas bill, and really are helped by the payments. the rich could pay a higher rate of tax, but have the payments – keep admin costs down.

But labour needs to vociferously oppose IDS – he will not admit his failure, just keep on spending more and more to try to make his pigs ear work. it won’t.

and Byrne won’t force his resignation, which he could do if he remembered he’s in opposition, instead of dreaming about when he’s chancellor… social security Sec of States historically fall like ninepins.

Commitment to repeal the bedroom tax is needed now. It should be clear that it is grossly unjust as well as impracticable, and a willingness to keep it if the budget figures ‘require’ it undermines everything labour stands for, and the efforts of those organising opposition to it.
Balls apparently won’t commit. That’s just bollocks.

The real test would be if Labour opposed the cuts and demolished the false argument that they are “fair” in the process. Majority support for a policy is no proof that it is a just and effective one, it merely proves that the injustice and ineffectiveness have been ignored by a feeble and complicit opposition.


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