… and it’s John Healey! Who’d have thought it?
His article in yesterday’s Guardian makes a lot of sense (although obviously he doesn’t go far enough in his suggestions. Labour never does, these days).
At least he’s making the right noises – pointing out that the Conservative Government’s plan to cut social security by £12 billion will harm people who are trapped by failing markets for housing and jobs. Think about it – cutting social security means people will be more insecure. That’s probably why Tories prefer to call it “welfare”.
He claims that the cut to the total annual household cap on benefits, from £26,000 to £23,000, is popular but will save less than one per cent of the total target.
More will follow – cutting tax credits (the subsidy for under-paying businesses, meaning people in work will be plunged into poverty), housing benefit (the subsidy for landlords, meaning people will be unable to pay their rent), and to disability payments (because nobody cares what happens to society’s most vulnerable until they become society’s most vulnerable; the evidence suggests these people will die).
According to Healey, every time the Tories wield the axe, they will challenge Labour to support them. If Labour refuses, the Tories will then be free to shout about Labour being the “party of welfare” – and never mind the fact that the Tories are the party of corporate welfare, funnelling billions to bosses.
Many of the cuts will punish the poor – without reducing the benefits bill, he reckons.
Take tax credits. Over the last five years, the Coalition government made 23 separate cuts, freezes and rule changes to tax credits costing working families £13.4bn. But overall spending rose, by £2bn.
Or housing benefit, where 10 separate cuts cost low-income renters both in and out of work over £5bn. But the total bill went up by £4bn over the Parliament.
Healey drew up a lengthy factual analysis of Coalition Government policy on housing benefits and discovered that the Tories and Liberal Democrats were actively increasing the bill.
The decision, for example, to raise council and housing association rents to 80 per cent of market rates will increase housing benefit spending by £5.4bn over the next 30 years, on those homes built in the last parliament alone.
He called this a “Conservative policy failure, with both the taxpayer and families on low incomes paying the price”.
His solution was for Labour to commit to building 100,000 new council and housing association homes a year until 2020, in the knowledge that those homes would pay for themselves, in full, in housing benefits savings over 27 years.
Just as people take out a mortgage over that time period and see a return on their home investment, so government could do the same.
Every pound invested in a genuinely affordable home means the state pays out less in housing benefit.
Over thirty years, I calculated that £1 generates £1.18 in savings… by recycling savings in benefit to build new homes, the up-front capital costs for those 100,000 homes each year would be no greater than the housing investment when I was Labour’s housing minister in our last year of government.
We can’t spend this parliament debating welfare costs on Tory terms again, so our challenge is to sidestep the narrow Tory narrative and start making a bigger case for bringing benefits spending down.
So this is the answer: Use the Conservatives’ own record against them and demonstrate that the government is asking the wrong questions and proposing the wrong solutions.
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