Means-testing Winter Fuel Allowance is a disastrous shift in policy

Ed Balls’ announcement today that Labour would begin means-testing the Winter Fuel Allowance is a disastrous shift in policy.

During the 2010 leaders debate, Gordon Brown went on the offensive on universal benefits for pensioners, challenging Cameron to commit to keep a raft of support including help with energy bills for the elderly. As a result of his pledge to do so it has been politically impossible for him to touch Winter Fuel payments, despite calls from the Lib Dems and his backbenchers to do so. In today’s speech, Balls cedes all the ground that Brown sured up and in doing so has paved the way for pensioners to see benefits slashed regardless of who wins the next election.

Balls hopes that his speech will appease those who believe fiscal credibility is gained through making ‘tough decisions’ (read: spending cuts) but if he believes that ‘In the Black Labour’ and their Shadow Cabinet supporters will be bought off by a policy that cuts just 0.09% from the deficit then he is very much mistaken.

Cutting Winter Fuel Allowance in the way Balls plans would save just £100 million but the cost of this policy is significant. Much has been made by Cruddas’ policy review of a rather crass interpretation of a ‘contributory principle’, but this cut travels in the completely opposite direction.

For a welfare state to be successful it needs everyone to feel they have a stake in it. If some people feel like they go through life only paying in through taxes and getting nothing out, then support for welfare is eroded and people will resent paying taxes. Support for welfare has declined dramatically in the last 30 years, with those on benefits being demonised as “scroungers”, but if middle and high earners also receive benefits it’s less likely the payments will be stigmatised. People won’t buy into negative stereotypes of benefit recipients as ‘feckless shirkers’ if they’re benefit recipients themselves.

Means-testing benefits, similar to the heavily criticised way the government has tinkered with eligibility for child benefit, is massively inefficient and creates administrative costs that can even run the risk of eclipsing any anticipated savings. The variation in administrative cost between universal and means-tested benefits is clearly demonstrated by the stark contrast between the State Pension and the Pension credit; administration for a new claim for the former costs £91 while the latter costs £351.

Bureaucracy is not the only downside to means-testing, it also creates the real possibility that, in attempting to take benefits away from the richest, some of the most vulnerable slip through the net and fail to get support. Universal benefits are the most effective method to ensure that those who need the state’s help get it. Complicated forms, a lack of awareness of entitlement and people being too proud to claim means that a third of those who are eligible for Pension Credit are currently missing out, with something as vital as keeping the elderly’s house warm at winter we simply cannot take a gamble that the poorest won’t receive their payments. Not only would this be socially irresponsible but it would create a spiralling health bill for pensioners suffering from the impact of cold weather.

Labour should be immensely proud of introducing the Winter Fuel Allowance; it has saved countless lives and made a meaningful difference to the 3.5 million older households living in fuel poverty. Now is no time to turn our back on this benefit or the universal principle more generally. Balls should listen to Miliband when he, quite rightly, said in January “I think that universal benefits, which go across our population, are an important bedrock of our society”. And surely that’s what One Nation is all about.

Join Next Generation Labour for a discussion on Labour’s economic plans with Peter Hain MP, John Healey MP, Cllr Catherine West, Mick Burke and Heather WakeField – 6.30pm on Monday 10th June 

Byrne fuels Tory divide-and-rule on welfare

Last week saw the Conservatives at their nastiest as first George Osborne and then David Cameron lined up to use the killing of six children in Derby to try and justify their wholesale assault on the welfare state. This weekend Labour joined the welfare debate with an article from shadow Work and Pensions spokesperson Liam Byrne in the Observer outlining his principles for the benefit system along with some tentative policy suggestions. Unfortunately the article at best failed to challenge the Tory narrative and at worst could provide further fuel to the divide and rule dog whistle politics on the subject which we have seen for far too long.

Byrne outlines three basic principles for social security. First that people should be better off in work than on benefits, that rights should be matched by responsibilities and that the principle of contribution should be strengthened. All three, when put alongside his accompanying policy ideas, demonstrate a capitulation to the Tory narrative.

Firstly parroting the line that people in work should be better off than those in benefits gives credence to the myth that out-of work benefits too generous. The truth is that this is not the case with a recent study from Dr. Martin Kahanec from the Central European University showing that the UK spends the third lowest amount on out of work benefits in Europe as a proportion of its GDP. While Byrne and Labour are right to champion the Living Wage this needs to be done in context of strengthening employee rights rather than in harmful comparisons with benefit levels. The latter will inevitably lead to a race to the bottom as clearly demonstrated in last year’s autumn statement in which Osborne played on people’s prejudices about “scroungers” to justify capping increases in benefits for those in work at below inflation rates.

The second principle that rights are matched by responsibilities panders to right-wing claims that those who are unemployed are personally responsible for their situation. Again the truth is very different with jobs simply not available for many. In the borough where I live there are 11 jobseekers for every vacancy. In other parts of the country the ratio is much higher. Liam Byrne reiterates a pledge previously given by Ed Miliband that everyone who has been unemployed for two years or more will be given the offer of a job or face losing benefits. Frankly this is a policy which creates more questions than answers and unless thoroughly thought through could leave many facing a choice between unsuitable employment or poverty and demonization.

Perhaps most concerning of all are the policy ideas around Byrne’s third principle that the contributory element of social security should be strengthened. In his article he suggests local authority should give priority to working people on housing waiting lists. This expands on an idea previously muted by Jon Cruddas, Labour’s policy co-ordinator, that those who’ve paid National Insurance contributions for longer should receive higher benefits.

While it’s right that local authorities should look to help working people under their jurisdiction the danger in Byrne’s proposal is that this will be at the expense of those who cannot work; the young, the disabled, carers, single parents of very young children etc. all of whom may have equally or more pressing need for support. It moves the welfare state away from to each according to their need and towards creating arbitrary definitions of the deserving and undeserving poor. In establishing divisions between those in work and those out of work it entrenches the very divide and rule tactics which Byrne purports to abhor for much of his article.

The tragedy is that the Labour front-bench’s capitulation comes at the very time when the public are turning against the Government’s assault on benefits. Most recently this has been manifested in widespread rejection of the ‘bedroom tax’. The viral campaign to make Ian Duncan Smith live on £53 a week has been backed up with a poll in the People this Sunday showing 51% opposing the housing benefit cut. The space is being created for Labour to smash through the Tory rhetoric over welfare and mount a robust defence of social security in the same way they have the NHS. They are currently falling well short of what is required.

Tsipras: No other way but radicalise further

Two new interviews from Alexis Tsipras’s visit to London make for fascinating viewing because they impart advice from a party that has challenged austerity and has seen enormous growth in support.

In his interview with Seumas Milne for The Guardian, Tsipras concludes by saying, ‘If we gain power and do not try to change everything then we have no chance of remaining in power.’

With the New Statesman, he says, ‘If of course Labour wins the next elections and opts to continue along Cameron’s tracks, then it’s almost certain that they will lose every bond with the social classes that support them.’

Of course, his urging of Ed Miliband to ‘be daring’ makes sense. Miliband has been most successful when he has rejected the wisdom of New Labour leaders and challenged Labour Right thinking on Murdoch, income tax or capping welfare payments.

Labour abstained on workfare, undermining its own support base and already causing a backlash from its own activists. Any party of the left taking power in a period of austerity and failing to offer an economic alternative will face a rapid and potentially irreperable collapse in support. We only have to look at Francois Hollande.

Tsipras and Syriza impress because of their resolute opposition to austerity and their commitment to tear up Greece’s Memorandum of Understanding with the Troika.

As he told the New Statesman, ‘More and more people realise austerity is not viable. There is no other way but to radicalise further’.

In Britain we need to take inspiration from this resolute stand.

There were some rare encouraging words from Peter Hain last week that suggests he understands what is at stake, when he wrote, ‘the coalition has managed to turn Labour’s road to recovery into the road to ruin – a dismal, reactionary consequence of failed policies that Labour must not think of emulating, even for a few post-2015 years. To do so would destroy trust, not earn it.’

Clearly Labour must reject any post-2015 spending plans, but it must be a real opposition before the election to win voter’s trust.

We must make the same demands on our own representatives, in the labour movement, but also build our own anti-cuts movement.

We can start this by making the People’s Assembly Against Austerity the largest possible expression of opposition to austerity, in order to create the conditions to achieve that alternative.


The Guardian interview

Greece could be the spark for defeating austerity across Europe

With Seumas Milne

SM: Alexis Tsipras, your party, Syriza, the Coalition of the Radical Left in Greece, has come out of nowhere in the past two or three years, going from 4% to close to 30% in last year’s elections and is now leading the polls in Greece.

First time since the 1970s that a party to the left of mainstream social democracy in Europe is a real contender for power.

Now this is obviously a product of the crisis in the Eurozone and the neo-liberal capitalism that we’ve been living through, but how do you explain Syriza’s electoral success and explosion politically in the last couple of years in particular.

AT: I think it is a very natural development given the crisis in Greece and that barbaric adjustment that has been chosen. It has torn apart the social fabric and has caused the political system to disintegrate. It has severed the links of political representation between the traditional political parties and the social groups that they once represented. Particularly, the links between social democracy and the middle classes in terms of the rights, demands and interests of the middle classes.

So it’s natural for the left to occupy that space that has consequently become vacant in Greece.

SM: One of the things that people have seen happening in Greece is that there’s a growing threat at the same time from the far-right, from the fascist Golden Dawn party and that the government is increasingly trying to play the security and immigration card against your party and to defend its own position.

Do you think it could even be said that there is a threat to democracy in Greece even when you have the situation where the Troika is dictating policy but also the threats on the ground in the situation of cataclysmic crisis, so how might that happen and how can you see it off and prevent it from happening?

AT: I think the only way to confront this phenomenon is by once again inspiring the people in Greece to believe that through their struggles, and through a democratic path, they are able to deal with this barbaric assault against them.

The only way to combat the spread of neo-Nazism is by halting this barbaric austerity programme. This is what is causing the spread of neo-Nazis across Greece. The Greek people do not have a tendency to follow such ideologies. On the contrary, they have crushed fascism during, before and after the second world war. They were a people who were at the core of resistance in Europe.

SM: Clearly the austerity programme which is being forced on Greece isn’t working and Greek debt is increasing and the crisis is increasing. Syriza has opposed the idea of Greece leaving the Euro and argued to remain in the Euro and renegotiate the terms of the austerity programme, the Memorandum of Understanding, of the Troika of the IMF, European Commission and the European Central Bank

But from the outside the question is what leverage would a Syriza or left-led government have if the other parties in the European Union if the Troika opposed such a reneogtation. What’s the leverage, what kind of allies, could a Syriza-led government have in such a negotiation when even the Hollande government in Europe is moving to accept the European Union’s austerity programme?

AT: Greece, like any eurozone member, has a strong bargaining chip. What is this? Well, if any of the 17 eurozone members were to exit, the next day the euro would be unsustainable. In such a situation, Germany would be the one to revert to the Mark. This strong bargaining chip has not been utilised by any Greek government so far. And so far all Greek governments have accepted all these cruel austerity measures without negotiation.

SM: Can you envisage a situation where a Syriza-led government would leave the eurozone and might find it advantageous to do so, or do you rule that out completely?

AT: Look, there are no landlords and tenants of the eurozone. If this is something that Mrs Merkel cannot understand, well then she must be convinced that this is how it is in terms that, unfortunately, may not be very polite. However in politics and the economy, we are often forced not to be polite. When, presently in Greece one and a half million people are unemployed, there are 700,000 families without a bread winner and we are confronted with such an unprecedented humanitarian crisis, we cannot be particularly polite to those who have caused this crisis.

SM: There is no question that Syriza has a very radical programme of complete opposition to a failed neo-liberal model, a programme of public ownership of the abnks and utilities, redistribution of wealth, for pulling out of Afghanistan and NATO, workers rights. But it’s been said both by critics of yours on the right and the left that a Syriza government in practice would be house-trained, would have to bend the knee to the realities of political power, and that already you’re having to start to shift your position for example on tearing up the Memorandum of Understanding, or unilateral rejection of this or that point, of restoration of the minimum wage. What’s your answer to that and what danger do you think there is in practise of a Syriza government having to make compromises on such a scale that it would alienate its own supporters and base?

AT: This is a long discussion that is also taking place in Greece as to whether Syriza would be coming closer to what some refer to as ‘realism’. However in light of the current brutal reality in Greece and Europe, there is nothing more realistic than to demand to change such reality. These days the only realism is to overturn this social injustice, to overturn these inequalities, and to overthrow this model of casino-capitalism, of profit-seeking capitalism that devours the flesh of European societies.

I believe that Syriza can be the spark that sets the field alight. We are at the tail end of existing neo-liberal capitalism in Europe. The crisis is not coincidental. It’s a structural crisis of capitalism and of its neoliberal model. Syriza and a Wuropean south following the electoral success of a government of the left in Greece – are capable of constructing an example for Europe.

Europe has always played a decisive role in developments in world events.We believe that at times of such barbaric events, what are demanded are radical solutions.

If we gain power and do not try to change everything then we have no chance of remaining in power.


New Statesman interview

More and more people realise austerity is not viable

With Daniel Trilling

NS: You’ve just given two lectures in London: one at the LSE, and one at Friends House, a well-known venue for left-wing events. How did you find the audiences?

Tsipras: Both at LSE, where I expected the audience to be a bit colder but it turned out that most were friendly, and at the [Friends House] one organised by Syriza London, the participation was amazing. At the second one I was surprised to see that almost 600 hundred people turned up. And not just Greeks either, many were British.

And I think this means that Syriza is not just a party with interesting positions, but a force that can bring change to the political landscape of Europe – not just for Greece, but for all the people who now need to reclaim their right to a decent society, justice and hope; against those who want to see them subjugated to this austerity that doesn’t just kill wages and pensions, but democracy itself.

Would you say you have political allies in Britain?

I had the opportunity to meet with two teams from the Labour Party: an official one headed by [Jon] Cruddas, the party’s head of policy-making, and another one with four to five Labour MPs. I got the impression that the Labour party today is in soul-searching mode, and the debate around austerity is on, so Greece is for them an interesting case study. Bearing in mind that in previous years they followed neoliberal policies, today Labour are deeply troubled about everything that has happened in Greece and especially by the collapse of PASOK [Labour's social-democratic Greek sister party]. They’re following the situation closely and I dare say they are one of the few parties so close to power in Europe with whom we share a lot of positions and with whom we can be in constant communication.

So Syriza can find common ground with Labour?

It will depend upon how daring [Ed] Miliband intends to be and especially when it matters most: during the next elections when pressure from the mainstream media and oligarchs in Britain start speaking of the “red dragon” that has come to drive away the City and submerge us in inflation and poverty. Of course this will depend not only on Miliband’s endurance but also on the circumstances under which this duel will take place. Because if elections are held in 2015, the two years in between will be apocalyptic as to the effects of neoliberalism in Europe. Britain is already in depression. Nothing is getting better. More and more people in Europe realise that austerity is not a viable prospect. I hope people realise that there is no other way but to radicalise even further.

Do you think there is potential for something similar to Syriza in Britain? A party emerging from outside the mainstream that will oppose austerity?

I can’t really know that. Every country has its own characteristics and in Britain there’s a long tradition of a two-party system. If of course Labour wins the next elections and opts to continue along Cameron’s tracks, then it’s almost certain that they will lose every bond with the social classes that support them. The void left there will certainly be filled by something new. That’s the way it works in nature and that’s the way it works in politics.

At your lectures, you spoke of the need for a “European people” in order to find a way out of the crisis. Do you find the conditions are here for this to happen?

I think we are running a grave danger: to focus our thoughts on the Greek people, on the British people, on the Italians, like separate entities. The crisis threatens to drive us backwards, back to the idea of the nation-state, and to the antagonism between those states that will come about as an extension of neoliberalism, with false ideas of competitiveness and so on.

On the other hand, we need to see the actual solution: that in common problems, we need common answers. Europeans have nothing to fight over. This stand-off is not between the British and the French, the Greeks and the Germans. This is between the working class, the unemployed and part of the middle class against predatory capital.

This brings us to something current and highly relevant to what you were saying. What do you think about what’s happening in Cyprus?

I think it’s unbelievable and self-destructive.

I believe that in the next few days panic will spread to the rest of southern Europe. It is a very risky choice they [the troika] have made, and it proves they have no understanding of the objective dangers facing the eurozone. They’ve chosen to have a Eurozone operating under their rule, with the people subjugated, threatened with blackmail like this. I think the only chance Cyprus has, like other countries, is if the political system rejects this blackmail. If they accept it, then there is no way back. Cyprus’s economy will be ruined, its banking system will bleed capital as depositors will fear a second haircut, and this will spread throughout Europe.

On the contrary, if Cyprus resists, and rejects this deal by protecting its banking system, it would send a strong message of trust and credibility to the rest of the southern European countries as well.

One of the first things your opponents in the government said when details of the Cyprus bank levy came up was to claim that one of your own MPs, Manolis Glezos, suggested something similar recently.

Their claims are ridiculous.

They’re made, though.

They [the Greek government] can claim anything they want in their PR war. It’s the same team of people that has ruined the country and they can use what they want to attack us.

Of course Manolis [Glezos] never said anything like that. He spoke once about the possibility of a voluntary loan via bonds exchange. His idea has nothing to do with the proposed involuntary haircut imposed on Cypriot deposits.

Those who now govern us under the neoliberal dogma, under the dogma of subjugation, will go for anything, they’ll ask for no one’s permission to take measures like that one. They will turn us into Argentina [circa 2001] while at the same time proclaiming that their target is to avoid exactly that. De la Rua [the former Argentine president] was their ideological cousin anyway, and it’s likely a helicopter will carry them away too, when the time comes for the Greek people to reclaim their rights and bring back balance to our society, economy and lives. There’s no other possible outcome.

But your opponents will claim you are no longer that radical, and that you now resemble a centre-left party.

Well, it’s ridiculous that the same people who claim that we aid terrorists, accuse us of becoming more timid at the same time. They just spin it any way they can and hope it catches on.

So are you still radicals or have you become a party of the centre-left?

Syriza is what it is: a radical, left-wing party that feels the pulse of the times, knows what’s at stake and is after a wide consensus and unity for political change in Greece. This is something that departs from the narrow limits of the radical left.

And what of the transformations Syriza is going through? Because there is certainly something changing.

We are going through a process, as democratic as ever, and with the people’s participation it can only get better. We already accomplished much. Last year no one would have thought that Syriza could achieve this. Instead of factions, we are now a solid democratic party, that operates with the same freedom of opinions as it used to. This will lead to the formation of a new shape for us that will come about after our next conference which is taking place soon.

Are you making moves in the European scene as well?

We are looking into the new conditions now forming. Our aim is for an international summit on the re-negotiation and the cancellation of the debt of peripheral European countries. For this, we are open to co-operation with forces outside the European left as well.

So you still claim you’ll “tear up the memorandum” and not just repay Greece’s lenders at any cost?

Our reasoning is that the memorandum has already failed. It’s a disaster. We’ll put an end to it and replace it when in parliament. We’ll proceed to renegotiate with our lenders with the prospect of a reasonable, viable agreement that won’t just concern Greece, because this is not just a Greek crisis. We’ve seen that the problem is systemic. This means that when negotiations take place it won’t be Greece against the world but rather, the European South against Ms Merkel.

Let’s leave Europe for a moment; what about the rest of the world? What came out of your recent tour of South and North America, for instance?

This happened in the context of carrying a message to the outside world: That Greece is going through a humanitarian crisis and that it needs alliances with those powers that realise the danger austerity carries for the entire planet. It’s in their best interests to support Greece, not out of charity, but rather because they understand that this catastrophic tragedy needs to stop. Through these contacts we’ve had the chance to create such alliances, for today and for tomorrow.

Was something more specific discussed in terms of trade? Cheap oil from Venezuela, maybe?

Well, I don’t think there is any point to get into so much detail. What matters is that a number of countries both in South and in North America understand the the Greek program is not working and a government of the left can provide a way out of it not just for Greece but also for Europe. It will give a prospect of balance for the world economy as well, because the real threat right now is the spreading of austerity and depression.

Is the rumour true, then, that the US is positive towards the possibility of Syriza coming to power?

That’s a comment I’d leave for you journalists to make. The point is that the US are following a policy line radically different from that which Angela Merkel follows and enforces throughout Europe. The US have printed money, they intend to tax the rich in order to avoid the fiscal cliff.

These are things that sees anyone who dares to propose them in Greece and Europe, labeled an extremist, when at the same time it’s what Obama does. In that sense there are common elements, at least more than in the past, in the applied economic policy. Geopolitics are more complicated than that, I’m afraid.

One subject you seemed to leave out of your talks was immigration, an issue that the far right has exploited to frightening extent. What is Syriza’s policy on this?

Immigration is one of the most important issues on our agenda. The European South is an entry point and we need to look into a wider solution. It’s unfair for entrance countries to be forced into taking all the weight of the issue. Dublin II [the EU-wide agreement on asylum seekers] strips away the right of immigrants and refugees, to leave the country with proper documentation. They don’t want to stay in a country where they can’t get a job, but they are forced to.

So we need to examine what kind of Europe we want from now on: Do we want a Europe based on solidarity where hardships are equally distributed? Or do we want a Europe where the south is used as storage space for poor souls and the north lives on comfortably? We are approaching this both on an institutional level, trying to force a treaty change, but also through a humanitarian perspective. We can’t treat those people who arrive to our country like second-class citizens.

And especially for those kids who are born in Greece, we say nothing different than what Britain does: they should be able to get Greek citizenship. They take part in Greek education, they speak Greek and they know no other home. We need to see the future in a multicultural Greece, much like the way Britain worked it out, successfully in my opinion.

So, for a last question: how important is your role as the face of Syriza?

Faces and personalities are important sometimes, but it’s social conditions that create the context for them to act. I’ve been saying the same things for three to four years. The people accepted the message now, not because I changed it. I believe history will be written by those people, not leaders, despite the role leaders have to play in this.