If you had said four years ago that the Tories would be setting the agenda on welfare reform at this stage of the parliament, and that Labour would be trailing so badly on one of its core issues, you could have expected to be put in a straitjacket.
But with the notable exception of Ed Miliband’s pledge to abolish the wretched bedroom tax, Labour has been well and truly stuck on the back foot – particularly once the Tories set about capping benefit levels and overall welfare expenditure.
Following the IPPR’s Condition of Britain report, Labour has an opportunity it must now seize to leapfrog the Tories. We must set out how we will rescue, repair and rebuild the welfare state so as to provide, at the very least, a national minimum standard of living that goes with the grain of voters’ beliefs around the value of work and the entitlement to benefit based on one’s contributions to society – be they financial or functional.
Labour has paid lip service to restoring this ‘something for something’ principle to the welfare state. Miliband did put some meat on the bone last week by pledging increase jobseeker’s allowance payments for those with strong national insurance contribution records. It was fully costed and helped differentiate us from the Tories’ race to a means-tested oblivion. But if we are effectively to steal a march on the Tories we must see this pledge only as a first symbolic move.
Likewise while Rachel Reeves has cast further doubt on the workings of universal credit under a Labour government, Labour remains supportive of the principle behind this monstrous means-tested benefit that will serve to penalise extra work, savings and honesty on the part of claimants. This policy fails the tests of practice as well as principle. The Condition of Britain report urges Labour to end dependency, but if we continue to back universal credit we will end up entrenching dependency on a mega scale.
We must therefore build on the crucial distinction voters make between means-tested benefits paid from general taxation, and contributory benefits paid for through national insurance contributions.
That is why I welcome the IPPR’s support for my proposal to give independence to the national insurance fund, so as to keep politicians’ sticky fingers away from voters’ money. I have outlined elsewhere proposals for a new system of mutuals based on the John Lewis Partnership governance model, funded by national insurance contributions with individual member ownership and control through elected boards.
Contributions would be raised over time so that the mutuals, covering those who pay in or who carry out key functions, like caring, will become self-sustaining for members.
These funds should be used to insure against the costs of unemployment, social care and pensions and pay for the NHS. Government’s sole aim should be to establish a legal framework for the new mutuals as well as ensuring that benefit is linked to contribution. As contributions build up over time, this gives ample room for cuts in general taxation.
This would represent a radical and ambitious governing project which captures voters’ sense of fairness. As an immediate step to lay the groundwork, I propose Labour should ask the government actuary for costs, in looking at how a fundamentally restructured national insurance scheme could work and its costs.
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Frank Field is member of parliament for Birkenhead and former minister for welfare reform
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Photo: Magnus Halsnes
I have always like Frank and its nice to see someone thinking forwardly [post May 2015] instead of worrying about the muddy conditions this side of the elction. Not saying it will all be plain sailing to get Labour that over 40% voter confidence which Tony Blair managed in ’97 but this type of clean thinking attracts sensible voters by the droves – the rest can fry kippers.
There are a lot of people ‘out there’ who feel they have no confidence after years of being in the wasteland of joblessness [or never having had a job in their lives at age 40plus] and its Labour’s prerogative [duty?] to show them that there is life after IDS.
Cash is a dirty word to a poor bloke and a rich-(wo)man’s-plaything, to the well off. Using a credit point system not to use the word cash as it is off-putting and relates to earnings] may be a better way to ‘sell’ the idea to folk who want to know what they owe to the State Piggy Bank fund in handouts they’ve received in their lifetimes, for whatever reasons, illness, taxes, childcare, burial costs etc.
Not all of us want b/millions in the bank and a flat at Canary Wharf in Moscow-on-Tems.
We are [all] too consumed by consumerism and wealth [another dirty word], from cradle to grave.
Remember, its LOVE of money which is Evil – money as a tool for bartering can be used quite sensibly for daily transactions and purchases.
[I] advocated 45 years’ ago that I wanted to pay back the State for the help it gave me at childbirth – still awaiting the bill.
I would like to know how much I ‘owe’ the State over 60-odd years when I needed State assistance due to illness or birth. If I ever ‘win’ the Lottery, I would like to pay back to the State any handouts which I may have received in these last 60-odd years. It is surely possible to figure out using my current ID National Insurance Number? I like many others in UK, like to pay their way as it gives me a sense of not owing a penny to anyone – let the shrinks work that one out – but to me its called plain old peace of mind.