Radical welfare reforms

Under the new government, the cost of the welfare state will increase, unemployment will go up, and so will the number of people living in poverty. It is worth bearing this in mind when reading the spin about Iain Duncan Smith's "radical welfare reforms". Here's three reflections on his speech today:

1. Duncan Smith's big idea for getting people into work is to pay them more benefits. Under his plans, everyone who is in low paid work will also get paid Jobseekers' Allowance, and possibly also Housing and Council Tax Benefit. He hasn't yet managed to persuade the Treasury of the advantages of this policy (surprise, surprise).

In some ways, this is a good idea. It is an extension of the principle of tax credits, and a recognition of the fact that for most people in low paid work, their wages are not enough to live on. It is also revealing that the outcome of years of research by right-wing think tanks about how to reduce poverty came up with the conclusion that we need to give more money to people in poverty (rather than, say, to cut benefits).

But the cost will be much more than £3 billion. This is an expensive way of trying to reduce in work poverty.

2. Duncan Smith's welfare policies involve Big Government forcing individuals to change their behaviour through a mix of sanctions, financial incentives, and payments to external contractors based on performance against closely defined outputs.

There is a pretty massive gap here. Reducing unemployment and poverty can't be achieved just by the state and individuals - the role of employers and of civil society is crucial. As someone once said, there is such a thing as society, it's just not the same as the state. And the spirit of "we're all in this together" means that employers need to recognise their responsibilities and do their bit, rather than just relying on government and unemployed people to behave differently.

Reducing in-work poverty requires action on issues such as employers hiring workers on zero hour contracts and requiring them to wait by the phone to see if they have any work for them; and action to prevent employers requiring workers to do a four week unpaid work trial before starting work. Big companies which make billions of pounds in profit and even some anti-poverty charities don't pay their staff enough to live on.

Whether it is replacing minimum wage jobs with apprenticeships, or requiring unemployed people to do community work, the Coalition is actually increasing the number of people who are working, but not earning enough to live on.

3. The rest of Duncan Smith's policies - whether it is Christian fundamentalist moralising by advisers who thinks prayer can cure gay people; or forcing sick people into looking for jobs which don't exist; or massive corporate welfare payments to companies to meet poorly designed targets, are as vicious as they are ineffective.

I know that the media and politicians have this view of Duncan Smith as a Noble Man who cares about the Poor, but I don't think that view will be shared by anyone on the receiving end of his policies. By all means, Labour and lefties should welcome his conversion to the cause of increasing the wages of low paid workers, and should support him against the Treasury when the rest of his party resists the cost of what he is proposing.

But Labour should also draw on the expertise of MPs like Andrew Smith and Alastair Darling - the last ministers who reduced poverty and increased employment - and Kate Green, the former head of Child Poverty Action Group, to craft a genuinely radical set of welfare reforms. Britain needs a modernised welfare state where everyone looking for work gets personalised support to help them get a job, with reforms to council tax and other taxes which hit the poor hardest, with quality services including free childcare, and where employers recognise their responsibilities and pay all their workers enough to live with dignity.

Coalition axes 44,000 "Big Society" jobs

The Future Jobs Fund helps charities by giving them money to hire young unemployed people to work on projects of benefit to the community. The young people get a job (paid at least the minimum wage), and the chance to develop their skills, and the charities get to hire workers which they wouldn't otherwise be able to afford. A perfect example, you would have thought, of the "Big Society" which our new government is so keen on, and of tackling youth unemployment.

So naturally, the Tory/Lib Dem alliance have just decided to get rid of the Future Jobs Fund. By next March, 44,000 young people who could have been working with local charities will instead be out of work.

In place of the Future Jobs fund, the coalition is planning to create apprenticeships for young people. Amongst the differences between the Future Jobs Fund and apprenticeships is that instead of receiving a wage of between £145 and £200 per week for their work, apprenticeships will pay £55 per week. Instead of 110,000 Future Jobs Fund jobs created each year, there will be half that number of apprenticeships.

In other words, to reduce the deficit, the coalition are planning to take at least £90 per week from young workers, and to cut their pay from the minimum wage to £2.20/hour. And those will be the lucky ones who can find an apprenticeship.

The very first chance that they got, this coalition decided that young people working on Big Society jobs was not an "effective" use of money and that it would be better if they were on Jobseekers' Allowance or required to work for their benefits. It is a chilling and vindictive cut which will cost all of us many times more than it claims to save.

Let's hear about housing, not yet more about immigration

For me, the nadir of the Labour leadership election so far was Ed Balls explaining how he and David Miliband differ:

"We all have some similarities but we have some differences: David's been a foreign secretary travelling around the world … I was born in Norwich … [and] I'm a Yorkshire MP. I've had a different set of challenges. Being different's good."

Let's instead have a look at the policy differences which the contest has thrown up.

The "moderate" wing of the party, including both Milibands, Balls and Burnham, identify immigration, and (lack of) welfare reform as key examples of why people, particularly people in work on average or below average incomes, stopped voting Labour. This is an attempt to address the argument of Gillian Duffy that:

"There’s too many people now who aren’t vulnerable but they can claim, and people who are vulnerable can’t claim" and "You can’t say anything about the immigrants because you’re saying that you’re… but all these eastern Europeans what are coming in, where are they flocking from?"

Labour lefties have been pushing back against this argument. As the new MP for Wigan, Lisa Nandy put it:

"I am concerned by the view of some, that the way to respond to the insecurity we are hearing on the doorstep about issues like immigration is by perpetuating the solutions that have failed us in the past.

At best we have failed to explain how the immigration system works and failed to delve beneath the concerns people have raised with us to understand what lies behind the insecurity they feel.

And at worst we have used immigration as an excuse for our own social policy failures - nowhere more so than in the area of housing.

It is no surprise then that we are hearing our own language reflected back to us on the doorstep. Instead of legitimising or ignoring those beliefs and assumptions it is time we challenged them."

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It's worth noting that the moderates haven't actually suggested any policy changes which they think are needed to respond to these concerns of the voters. It was perhaps revealing that when pressed on this, Balls suggested that the priority was for Labour to explain better about the points-based system which they introduced, along the lines of "if the voters disagree with us, it must be because they didn't understand what we were doing". The loathsome Phil Woolas has made this argument explicitly.

I think it is also worth noting, since a lot of this seems to have been prompted by "bigotgate", that there is no evidence that "bigotgate" actually damaged Labour's electoral fortunes. Between 28th April, when Gordon Brown called Gillian Duffy a bigot, and election day, the opinion polls showed Labour's share of the vote slowly increasing. Labour's vote might have increased more quickly without "bigotgate", but it is impossible to know.

In fact, the example of Gillian Duffy is quite interesting. Although she was concerned about immigration, she also felt that the local schools were getting better, and appreciated the help that pensioners had got. Indeed, she was planning to vote Labour after she'd spoken to Gordon Brown. And, of course, Labour gained Rochdale from the Liberal Democrats.

Regardless of which individual ends up being Labour leader, this is one policy argument that it is absolutely key that Labour gets right. If the Milibands, Balls and Burnham think Labour should change its immigration policies, then they should set out how and why.

But it would be much better if they took Nandy's advice and instead of trying to put a new spin on old policies, took the time to explain how they would change Labour's policies to sort out the vitally important issues which the last Labour government failed on, starting with housing.

Funding advice for the Lib Dems

The Lib Dems are arguing that they should continue to receive 'Financial Assistance to Opposition Parties' funding, even though they are not in opposition.

This money is very important to the Liberal Democrats, as it represents nearly a third of their total funding (in 2009, 37% of their total funding came from taxpayers).

I know that some would make the points that it is totally and obviously indefensible for a party of government to receive money specifically meant for oppoisition parties; that this is hypocritical for a party committed to "cutting the cost of politics" to argue for this; and that if their leader thinks that public services and the welfare state need "savage cuts", we could start with savage cuts to state support for the Lib Dems.

But here at Paskini Consultancies, we reject these arguments as examples of the "old politics". In the spirit of the "new politics", we have instead come up with three ideas to help the Lib Dems save money and generate additional income:

1. In the past, the Lib Dems have employed lots of people whose job is to design, print and deliver leaflets featuring barcharts about how the forthcoming election is a "2 horse race", and "only the Lib Dems can beat the Conservatives here". While these employees have given good service in the past, there is clearly no need any more for this kind of work. To smooth the transition of these workers to other jobs, they could get advice on alternative sources of employment from noted welfare to work experts Iain Duncan Smith and Phillippa Stroud.

2. Similarly, the fact that many members of the Liberal Democrats have resigned and joined Labour, the Greens or the Conservatives offers opportunities to reduce the number of staff employed in maintaining the membership database. This could also lead to lower postage bills, as fewer copies of members' newsletters need to be sent out.

3. As for income generation, the Lib Dems should make greater use of their High Net Value supporters and MPs. Millionaires like Nick Clegg, Chris Huhne, David Laws and Lynne Featherstone probably don't really need their extra ministerial salaries, and could be encouraged to increase their contributions to the party. Extremely wealthy parliamentary candidates such as Chris Nicholson in Streatham could be consoled for their failure to buy their way into parliament with the opportunity to make more substantial donations. And they could also solicit additional donations from groups that campaigned for them for the first time in the 2010 election such as the Guardian newspaper and the Oxford University Conservative Association.

We hope these ideas are helpful, and encourage readers to suggest additional ways in which the Lib Dems can reduce their dependency on handouts from the taxpayer. Please note, however, that suggestions that they should receive and keep donations from convicted frausters are not helpful and not in keeping with the "new politics".

The case for nominating John McDonnell

John McDonnell represents a constituency which was Tory from 1983 to 1997. One of Labour's key policies was massively unpopular in his constituency, involving hundreds of people losing their homes and the rest suffering a reduced quality of life. Yet the Labour vote increased by more than 4,000 votes between 2005 and 2010, and he was re-elected with a majority of more than 10,000.

His campaign mobilised large numbers of volunteers, including many who weren't members of the Labour Party. He has a large personal vote in his constituency, and I've met people from other, neighbouring constituencies who have been helped by him when their own MP didn't want to know.

His dad was a bus driver, he left school at 17, and after doing a variety of unskilled, low paid jobs, he helped run a care home for children before going into politics. His approach to local community campaigning is similar to the one which senior Labour ministers such as Liam Byrne are now calling for.

I don't think that John McDonnell will be the next Labour leader. But I think Labour has got a lot to learn from him, and I hope that he gets enough nominations to be able to stand.

The evidence shows that he is an outstanding constituency MP, and if every Labour MP elected in 1997 had been as assiduous, Labour would probably still be in government. Since Labour is currently reviewing how it needs to change, it would be very interesting to see how the public react to McDonnell and the policies that he supports - I would guess that some of what he says would be very popular, and other bits less so.

There are ancillary benefits as well. McDonnell is an excellent debater and is an opponent of the Iraq war from a working-class family. He is transparently not part of the political elite, and has a strong populist message. It would be interesting to see how the Milibands and Ed Balls would do in debates against him, and it would get them out of their comfort zone. A similar exercise in 2007 would have highlighted Gordon Brown's weaknesses as a campaigner, rather than Labour getting to discover these after appointing him. Labour's membership would increase, as well, as people who agree with McDonnell would join up to take part, including some of the millions who voted Labour in 1997 but stopped voting for us by 2010.

It would be good see a leadership contest which showcases the wide range of strengths, opinions and talents across the Labour Party. It would be good for the choice to include, for example, a Eurosceptic West Midlands MP like Gisela Stuart, and a leftie feminist like Emily Thornberry, both of whom have good grassroots and campaigning experience and an ability to reach out and broaden Labour's support. But at the very least, since John is willing to stand, I hope he is able to do so. It will be Labour's loss if he doesn't.

The unfairness of Ed Miliband

Since the election there have been a slew of former Labour ministers keen to tell us that Labour needs to change by listening to the voters and their concerns. The speeches and articles are sprinkled with anecdotes from conversations that these ex-ministers had with voters in their constituencies. In many cases it is obvious that going and talking to voters had been a rather novel activity.

Ed Miliband's speech today, in which he announced himself as a candidate for Labour leader, gave two particularly obnoxious examples of this genre. On immigration, he announced that:

"But the truth is that immigration is a class issue.

If you want to employ a builder it’s good to have people you can take on at lower cost, but if you are a builder it feels like a threat to your livelihood.

And we never had an answer for the people who were worried about it.

When competition is driving down your wages and your pension rights, saying globalisation is good for you and for the economy as a whole is an example of what I mean about becoming a technocrat. Because it is a good answer for economists but it is no answer for the people of Britain.

So, for that voter in my constituency, and many others, we need to rediscover our sense of progressive mission."

And on what he charmingly calls "people at the other end of society":

"And if we didn’t do enough to enforce fairness at the top, nor did we do enough to enforce it at the bottom.

I am a great defender of the welfare state. It is what a civilised society depends upon.

But the night before the election I was in my constituency and I met a guy who had done well under Labour.

And he said, look, I am not voting for you.

I’ve voted Labour all my life but I am working all the hours that God sends to make a decent living, and yet, he felt, that there are people down the street who could work but were not doing so.

Now we know we did act on this issue, but perhaps too late.

We have hard thinking to do

We need to re-found the welfare state: not just on need, but also on the original Beveridge mission of responsibility and contribution."

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Firstly, Miliband's responses to these concerns are waffle and drivel (what's a "sense of progressive mission" when it is at home? How should we "re-found the welfare state"?) But more than that, he treats migrant workers and unemployed people as unPeople, unworthy of mention except as a problem who need to be dealt with by the Labour Party adopting different policies.

In the cause, ironically, of "fairness".

This is the Margaret Hodge c. 2006 approach, where an out of touch government minister goes and visits the little people in the provinces for the first time in many years and finds that they hold different opinions from people at Westminster, and announces that something must be done.

It is not "fair" for wannabe Labour leaders to repeat right-wing rhetoric and call for their party to make life even harder for migrant workers and unemployed people, and as Barking in 2006 showed, it isn't effective either. "Addressing concerns" about immigration led to Labour ministers passing laws to lock children up and force people to leave Britain through the threat of starvation. Under any conceivable definition of a "progressive mission" we need a different and more humane approach.

Miliband should take his own advice, and learn from Labour's successful campaigns in the recent elections. In the areas where Labour were successful, they didn't spend their time going on about the need to change immigration policy or welfare reform. Instead they mobilised volunteers - from all sections of the community including migrants and unemployed people - to help people, take up and sort out problems, and do effective grassroots campaigning all year round, with hard-working candidates rooted in their communities.

Labour needs a leader who understands that this is what is needed, and who is committed to making sure that we campaign in every community and that our policies nationally reflect and draw on the experience of people at the grassroots. That's the way to make Britain fairer.

Lib Dems surrender to Tory Right on welfare

One thing which caught my eye about the terms of the Lib Dem/Tory pact was that the welfare policy will be entirely run by the Tories. None of the ideas in the Lib Dem manifesto made it in, and Iain Duncan Smith will be the minister responsible, assisted (according to reports at the time of writing) by Chris Grayling and Lord Freud.

What makes this particularly regrettable is that the Lib Dems had some good ideas on welfare policy, and Steve Webb, their former spokesperson, is an expert in welfare policy and has lots of good ideas for helping people get jobs and reducing poverty.

(Of course, the fact that Webb is an expert and is left-wing is probably why he didn't make it into the Cabinet).

I don't think I need to explain why Iain Duncan Smith and Chris Grayling will push through a set of authoritarian, illiberal and ineffective policies which will be designed to stigmatise and punish people on low incomes while providing bigger handouts to private companies - it is not as if it is a big secret that this is what they want to do, indeed it is all written down in the coalition document.

What the coalition have got planned is much worse than what Labour was doing, even before you consider that it will be combined with savage cuts to public services. And every single one of the policies agreed by the coalition government are ones that the Lib Dems opposed just one week ago. It will lead to more people being enslaved by poverty, ignorance and conformity.

More than that, it is worth noting that at the elections last Thursday, the Executive Director for Duncan Smith's think tank, the Centre for Social Justice, as well as the founder of one of their leading so-called "poverty fighting charities" stood for election. And both Philippa Stroud and Shaun Bailey were pretty decisively rejected by the electorate despite lavish support from the Conservative Party.

If the Lib Dems had cared about welfare policy, then they could have insisted that one of their most able and effective ministers was given a job in the government. They could have made welfare policy a "red line" issue, and fought for their ideas, or at least modified some of the worst of what the Tories plan. Instead they chose to hand over control over the policies which affect the most vulnerable people in our society to Christian fundamentalists, homophobes and City bankers. And no one in the Liberal Democrat Party seems to care or object.

Don't blame Labour for ConLib deal

Let's just have a quick recap on those negotiations, now that a Tory/Lib Dem coalition appears certain.

During the election campaign, senior Labour figures encouraged their supporters to vote Lib Dem. Yesterday, Labour's leader stepped down to try to remove a barrier to a deal between Labour and the Lib Dems. Labour went beyond their manifesto to offer a referendum on certain kinds of electoral reform which the Lib Dems favour.

Meanwhile, before May 6th the Lib Dems gloated about how they planned to make the Labour Party irrelevant, claimed that the election was between the Lib Dems and the Tories and insisted that they would negotiate with the Tories first. And after their poor performance in the election, they offered literally no concessions and made no effort whatsoever to make a deal with Labour possible.

Like many in the Labour Party, I didn't like the way that our leadership were bending over backwards to try to do a deal with the Lib Dems. But for anyone now to claim that it is Labour's fault that the Lib Dems decided to team up with the Tories beggars belief.

Those of us who warned that voting Lib Dem could let the Tories in have been proven right, and Lib Dem supporters and liberal lefties who don't like what their party has done should have been listening more closely to Nick "savage cuts" Clegg over the past few months.

Part of what Labour needs to do now is to think about how we need to change to attract the support of those people who used to vote Lib Dem because they want social justice and political reform. This will certainly be one of the criteria for deciding who my vote will go to for Labour's next leader.

Against the coalition of the losers

Jess Asato has a good article about the need for Labour to learn the lessons from the elections:

"If Labour is going to win back the key seats needed to form a government next time, it needs to identify the best campaigns across the country and replicate their winning elements. This means selecting personable candidates who are willing to work 24/7, appointing diligent consituency organisers and identifying local issues which galvanise the electorate to identify Labour as a party which cares about their day-to-day needs, not the demands of lobby journalists."

Jess could have added that it also requires candidates prepared to vote against their party when they think Labour is doing the wrong thing - whether that's Andrew Smith over Trident, Andy Slaughter over Heathrow, Gisela Stuart over Europe or John McDonnell over everything.

One implication of this which people haven't yet realised is that it means that Labour can't be part of a Lib/Lab "coalition of the losers". Dozens of Labour MPs got elected by pledging to be strong, independent voices who would put their constituents first. But in a coalition government, if as few as two or three Labour MPs put their constituents ahead of their party, it would lead to the defeat of the government on key pieces of legislation. Even if it were possible to get them all to vote exactly the same way on everything, it would be undesirable.

The electorate gave a clear preference for independent-minded, effective Labour candidates who are rooted in their communities, who keep in touch all year round and are on the side of the people they seek to represent. It's vital for democratic renewal and social justice that Labour learns how to campaign effectively in every constituency and every community, spreading and learning from the good work where this already happens. This is far more important for the people who need Labour's help most than trivia such as which Oxford educated former Special Adviser becomes our next leader.

This process of learning and renewal will take a little time, but will reap great rewards. But just at the moment, it means that Labour can't enter into coalition government.

A Tale of Two Elections

[probably not very coherent, I've been awake for 35 hours and this is scribbled down before going to sleep]

Something apparently inexplicable happened last night. Why did the Lib Dems win in Redcar, Burnley and Brent Central, but lose Oxford West and Abingdon, Chesterfield and Harrogate? Why did Labour hold Birmingham Edgbaston? Why were there swings to Labour against the national trend in Ealing North and Oxford East?

None of the complicated statistical models designed to predict the election explain any of this. The highly paid TV analysts were left scratching their heads. The Lib Dems lost seats despite the opinion polls and the hype about Nick Clegg. The huge financial advantage and mass media backing of the Tories failed to deliver them a majority. All of the analysis by the media about the importance of the media turned out to be worthless. The TV debates didn't make the difference that experts predicted.

The reason is that all these members of the political elite were looking in the wrong place. They assumed that the national campaigns would decide the results of the election - the "air war" and struggle for dominance on the TV and in the newspapers and even on the internet.

Meanwhile, the real story was happening at the grassroots and on the ground, in local constituencies where activists were going round knocking on doors, speaking to people directly, bypassing the media and deciding who won the election. The relative quality of each party's local campaign explains the results of each constituency far better than any statistical prediction or opinion poll.

Andrew Smith in Oxford East and Stephen Pound in Ealing North saw their support rise because people wanted to keep them as their MPs. Evan Harris lost because he had become complacent and didn't reply when his constituents wrote to him - despite his high media profile he was a poor quality local MP. Labour in Redcar took people for granted, and lost, while in Edgbaston they campaigned hard for every vote, and won.

The lesson of this election is that people were voting for a local representative, not just a party ticket. They were more, not less, likely to support an incumbent who worked hard and got things done. I lost count of the number of people who said of Andrew Smith, "he was there for me when I needed help, so I'll be there for him now he needs my help".

It is also worth looking closely at what the parties said in their local campaigns. In Oxford and in Islington, Labour took on the Liberal Democrats from the left - over savage cuts to public services, the living wage and the NHS - and beat them convincingly. Where Labour criticised the Lib Dems from the right, over immigration or votes for prisoners, they lost support to the Lib Dems.

And as for the idea of the natural progressive alliance between Labour and the Lib Dems, it is worth remembering all the local Lib Dem candidates across the country who put out leaflet after leaflet which begged for the support of Tory voters to vote tactically to beat Labour. The Lib Dems have a standard leaflet which they use across the country which is deliberately designed to look like it comes from the Conservative Party, appealing to right-wing voters to back the Lib Dems to beat Labour. There really shouldn't be any shock horror when Lib Dem MPs who spent the election campaign encouraging Tory voters to back them to beat Labour then decide that they will talk to the Tories first about doing a deal to run the country.

Labour's national campaign was terrible, but their investment in getting their activists to talk directly to people paid off massively. Where we worked, we won, and the more people we talked to, the more likely we were to win. More on this another time soon.

Lastly, many of the people who missed the importance of the local campaigns on the ground and who were obsessed by the media and the air war are now saying that this result shows the need to change the voting system. Any changes to the voting system should take heed of the clearly expressed will of the people, and should therefore enhance the link between MP and their constituents, and strengthen the importance of local activists talking and listening directly to people, rather than reducing the importance of grassroots campaigning and returning to the bad old days when what the media said and did was all that mattered.