More cuts and more austerity with Labour


   By a Newsnet reporter

Labour’s shadow chancellor Ed Balls has abandoned the party’s traditional commitment to universal benefits and said that if re-elected Labour will continue with welfare caps and Coalition benefit policies, vowing that the Coalition’s spending limits will be the “starting point” for Labour if it wins the 2015 general election.

In a speech yesterday, Mr Balls promised a “fair cap on household benefits”, with an independent body advising on whether a limit should be “higher in high-cost housing areas like London, but potentially lower in other parts of the country”, which could mean that benefits claimants in Scotland would see greater restrictions on the amount they could claim than people in London or the South East of England.

Echoing Johann Lamont’s much criticised “something for nothing culture” speech last year, in which she said that the party may abolish universal benefits such as free prescriptions, the shadow chancellor also announced that Labour intended to scrap the universal winter fuel payment to elderly people, and would introduce means testing so that richer pensioners would no longer receive the payment.

Although Labour’s headline commitment to abolishing the universal winter fuel allowance will not by itself save much government expenditure, critics have pointed out that by making the announcement Labour has opened the door to the Conservatives and Lib Dems to make further attacks on the principle of universality and the welfare system.

Writing in the Spectator, Conservative commentator James Forsyth said:

“The Labour leadership is hotly denying they’ve abandoned universality. But it is hard to see on what grounds they’re arguing this. This provides an opening for the Tories to offer a scaled back version of the welfare state that is more of a safety net than a universal system.”

Pensioners groups have reacted angrily to Mr Balls’ commitment to axe universal winter fuel payments for elderly people. 

The general secretary of the National Pensioners’ Convention, Dot Gibson, said:

“This announcement clearly isn’t about economics – it’s about politics.  The scheme would raise just £100m out of a welfare budget of over £155bn, but if Labour really wanted to tackle inequality and unfairness in Britain, they could commit themselves to reinstating the 5% tax reduction that the super rich – including pensioners – got this year.”

Mr Balls refused to give details of Labour’s planned benefit caps, saying that Ed Miliband would be making a speech on the topic later this week.  The plan will be seen as Labour’s attempt to match the £26,000-a-year benefits cap per family recently announced by Chancellor George Osborne.

Labour is keen to be seen as “tough on benefits” in order to shore up its vote in Conservative-Labour marginals which the party needs to take in order to ensure it becomes the next government. 

There are no such marginal seats in Scotland, meaning that yet again Labour’s policies are being driven by the considerations of the political landscape south of the Border.  According to recent opinion polls, a majority of Scots want the benefits system to be controlled by the Scottish Parliament.

In a related development, Mr Balls was ridiculed by the Conservatives and Lib Dems after he stated in an interview after his speech that he did not believe that the previous Labour Government had racked up excessive debt.

Mr Balls said: “Do I think the last Labour government was profligate, spent too much, had too much national debt? No, I don’t think there’s any evidence for that.”

Conservative MP Sajid Javid, Economic Secretary to the Treasury, said:

“Ed Balls’s promise of discipline on spending isn’t remotely credible. He is incapable of admitting that Labour spent and borrowed too much.”

Responding to Mr Balls’s speech, Dr Eilidh Whiteford MP, SNP Work and Pensions spokesperson, commented:

“This is an extraordinary step for Labour to take – and confirms that the only way to safeguard the welfare state in Scotland is by voting Yes next September. Already, a majority of people in Scotland believe that welfare and pensions policy should be decided by Holyrood not Westminster – and developments like this show why having control in Scotland is essential.

“Scotland has paid more tax per head than the UK average in every one of the last 30 years – and the official figures show that Scotland subsidises the rest of the UK, not the other way round – yet Labour are now talking about having lower welfare payments in Scotland than the south of England. Johann Lamont and the Labour MPs at Westminster she is nominally in charge of have a great deal of explaining to do.”

“Ed Balls has now made it clear that if Labour was ever re-elected at Westminster they would adopt the Tory mantra of cuts, cuts and more cuts. His language could not be clearer and his attack on the universality of pensions by cutting winter fuel payments shows us that a Westminster government of whatever hue really does mean sticking with Tory cuts. The only way to escape this Westminster austerity is with a Yes vote in 2014.”