Has Ed Balls scored an own-goal over benefits ‘big stick’?

Owen Jones thinks the LP has scored an own goal:

The big problem is – and my apologies for the politico jargon – “framing”. The Guardian headline reads “Balls: work for six months or no dole”…. It’s quoted as a “compulsory work or lose benefits” policy; as Labour moving “to protect itself from the politically damaging charge that it is soft on welfare claimants”.

…. The whole debate over welfare has become toxic because of a systematic campaign by Tory politicians and their allies in the media to demonise those in receipt of benefits: unemployed people, disabled people, and so on….

Unless Labour forcefully launch a counter-offensive on welfare, focusing on human stories – after all, they resonate with [people] better than statistics – they will always lose the argument. They will never credibly out-do the Tories on a “tough” approach on welfare and – if they did – they might as well call it a day and pack up.

Labour have been moving in the right direction – notably taking on the 1% welfare cap which will hit both the working poor and the unemployed – but it is only effective if they stick relentlessly to the same message.

http://labourlist.org/2013/01/labour-will-never-credibly-out-do-the-tories-on-a-tough-approach-on-welfare/

 

lightacandle replies to those who think that Ed Balls has made a good call in countering the Tory line that Labour is ‘soft on skivvers’:

Yes.. can agree with that side, but you should never have to use the threat of sending someone into destitution to coerce anyone into doing anything. That way lies all sorts of problems, and once you start using that as a tool and it becomes acceptable, we lose something very precious. There are other ways of helping and incentivising people – blackmail is not one of them and throwing people to the wolves, neither another.

[Ed Balls] just needs to be careful – as I said before, by making benefit withdrawal.. albeit on this initial small scale… part of Labour party policy, he has taken away his right to condemn this government, and the Tories in general, when they use it for their own warped purposes. That is the mistake being made here. Along with the fact that he assumes there will be work for all. Something we know not to be true, and again a lie this government is happy to push forward as it takes away or reduces benefits from those of the population who will not be able to find a job, or those they want to push into slave labour. There is something not right with it all – and it is a dark road to take because it means by accepting it we are being compliant in a tactic that I believe is wrong and inhumane.

 

Meanwhile Michael Meacher MP argues that:

Osborne’s ‘trap’ of forcing vote on cutting benefits should be turned against him

Labour will rightly vote against the bill which is deeply unfair, but it has also given the party a perfect opportunity to argue the profound injustice of making the poorest sections of the population bear the overwhelming burden of cutting the deficit caused by the bankers’ recklessness whilst the rich who did cause it get off virtually scot-free.   And Labour has also devised an alternative proposal to rebut any charge that it’s soft on the workshy…  Labour’s scheme not only offers an effective political rebuttal to the mischievous propaganda of Osborne and IDS, but points to a much better way of resolving the deficit – by reducing benefit expenditure and providing opportunities for work.   Some might think the 3-6 month suspension of benefits unduly draconian, but the scheme should allow for suitability of the work, intensive support where necessary to assist the return to work, and some training to ensure that participants are not permanently stuck in dead-end jobs.   The Tory plan however falls foul on at least two counts: two-thirds of those on tax credits are in work already, and cutting both benefits and tax credits undermines aggregate demand which the economy needs now like a hole in the head.

But the real case against Osborne is that the super-rich should be made to pay, not the poor. 

 

Alittleecon thinks Labour’s proposal is timid, lacks ambition, scope and retains the nasty undertones of the current climate – not wanting to appear to be soft on ‘scroungers’.  Alittleecon says:

So what would a job guarantee worthy of the name look like?  Here’s some features it might have:

  • Job offer at 3 months or less
  • Jobs last for an indefinite period
  • All jobs come with training
  • Paid at a living wage
  • Genuinely full time work available, but with flexible and part time hours for single mothers, those with health issues etc.
  • Optional, i.e. the person can choose to remain on benefits and seek their own job (subject to Jobseeker’s agreements as now)

 

Syzygysue says:

I agree that Labour ‘will never credibly out-do the Tories on a “tough” approach on welfare’ and it is profoundly depressing to see yet another triangulating tactic which I’d hoped was a redundant  strategy.  I agree with lightacandle that it will confirm for many that the LP leadership are just Tory-lite… and to be honest that is the outcome that Ed Balls wants because it is supposed to confound George Osborne’s accusation that the LP are ‘soft on skivvers’.

Nevertheless, Michael Meacher is right to be hopeful that the debate will offer Labour an opportunity to oppose ‘the profound injustice of making the poorest sections of the population  bear the overwhelming burden of cutting the deficit caused by the bankers’ recklessness’, and let’s hope that they do so effectively.

However, like alittleecon, the part of the Ed Balls’ announcement that concerns me most, is that the policy is so timid.  It would not kick in until someone had been unemployed for 2 years and would only be for 6 months.  Furthermore, as I understand it, Ed Balls will not commit to any funding which is not fiscally neutral (ie. he knows how he’ll raise the money). This is economically illiterate and accepts the Tory nostrum that the UK has ‘no money left’.

This is lunacy.  We do not operate under a gold-standard, and even Mervyn King accepts that the UK is not revenue-constrained.  Indeed, how could he, when he authorises the £375 Bn Quantitative Easing to buy back government issued gilts.  In addition,  let me quote Richard Murphy who runs the top UK economics blog, Tax Research UK ( I recommend reading the entire post):

‘I argue that quantitative easing is actually about writing off government debt whilst the Tories say they have to impose cuts, and that fact has dramatic implications for economic and social policy in this country…. ‘

In other words, the national debt has effectively been reduced to about 45% GDP... about the same as it was throughout Margaret Thatcher’s tenure.  So there is not a debt crisis. The UK is in absolutely no danger of becoming another Greece.  The UK is not subject to the whims of the Bond markets and given that the best way to reduce the deficit is to get people back into work, the Labour focus should be on using a job guarantee of the sort suggested by alittleecon.

After all there is no shortage of jobs to be done.. for example, in mitigating climate change and the impact of peak oil.

So what I want to know is why are Labour not confronting the failed economic theories which George Osborne uses to justify his austerity policies?  The mythologies of the Laffer curve, NAIRU, Expansionary Fiscal Contraction, exporting our way out of recession etc etc… Why don’t the Labour Party attack the fundamental lie that the UK has ‘run out’ of money and cannot afford to pay proper benefits to the disabled, the long-term sick and the unemployed?  

Why doesn’t Ed Balls say Austerity begets Austerity?

George Osborne says we’re running out of money ..

When is a Job Guarantee not a Job Guarantee?

Simon says: QE is the biggest confidence trick of all time.

http://www.michaelmeacher.info/weblog/2013/01/osbornes-trap-of-forcing-vote-on-cutting-benefits-should-be-turned-against-him/

http://www.taxresearch.org.uk/Blog/2012/09/21/the-real-potential-of-qe-how-we-could-turn-our-economy-round-now/

 See also:  

Dear Ed Balls WorkFare doesn’t Work!

 

3 thoughts on “Has Ed Balls scored an own-goal over benefits ‘big stick’?

  1. Ed Balls doesn’t come right out and criticise Osborne’s handlers’ failed economic policies because they aren’t failing. They’re doing what they’re intended to do which is to funnel money from the poor to the rich. We get impoverished and the rich get richer, and it is indeed a bleedin’ shame. Balls is on the same team as Osborne, the Neoliberals who want to make serfs out of us all. This is getting more obvious by the day leaving us with a quandary – no-one major in politicis has any interest in representing ours. What to do?

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    • I don’t think Balls is on the same team as Osborne. He’s a Krugman-type dove whereas Osborne is using the hawk policies of the Chicago school to justify his anarcho-capitalism. Ed Balls believes that the important thing is to get elected (because he has said that there is no point in being correct but in opposition). IMO he is really misjudging the political(small ‘p’)positioning but that’s not the same as being like the ‘tea-party’ who are currently running the country.

      75% of the population are supposed to support benefits being cut because of the horrendous, vile Tory propaganda so its no wonder the LP has adopted such a line. But there are 2.5y before the next election, and a lot of manure is still to hit the fan which will impact the future position of a prospective Labour government. Nevertheless, I agree that our political parties are not representing the spread of political views .. IMO they are all to the right of the vast majority of the electorate. As to what to do – my decision is that the priority must be to remove the Tory/LD government asap before they can lock in more damage. The only way to do that is to support the LP. Therefore, the task is persuade the LP to adopt better policies. A ‘plague on all their houses’ will only result in Cameron being in place until 2020.

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