Labour’s Relationship With Unions Must Change

Speaking on BBC Radio 4’s Today programme Peter discussed the relationship between Labour and the Trade Unions. The key is to revitalise Labour into a broader movement rather than an old fashioned party like Tories and Lib Dems with declining memberships.

He spoke of a need to develop a party that connects widely across the country, connecting beyond traditional party membership and creating an active movement, this means mending not ending the relationship with the unions.

To hear the full interview visit

The ‘nothing for something’ society


Labour’s proposal to cut winter fuel allowances for higher-rate taxpayers suggests we may be joining the Tories and Liberal Democrats in dismantling the inheritance of Clement Attlee, Nye Bevan and William Beveridge – at the top of a slippery slope towards a US-style system of public services only for the poor.

If winter fuel allowances are to be means-tested, then does it stop with pensioners taxed at higher rates, or will the pressure be downward and then onto free TV licences and bus passes for pensioners and senior rail cards?

For lower earners these benefits are comforts guaranteed in old age; for middle-to-higher earners they are one of the few rewards received for contributions to the welfare pot throughout their working lives. If middle Britain ceases to benefit from the welfare budget through the few universal benefits now remaining, how can we convince them to fund the great bulk of that budget through their taxes? There is plenty of talk about a ‘something for nothing’ society, but there is a danger now of a ‘nothing for something’ society. Indeed, it is argued that millionaire pensioners like Paul McCartney should not be entitled to free bus passes. I rather doubt he uses one but if he did he would have paid for it over and over again through his taxes. Beveridge’s 1942 report, which became the cornerstone of the welfare system built by Labour, advocated universal contributions for universal benefits in the hope of cementing social solidarity.

Labour’s new winter fuel policy only saves an estimated £100m – tiny compared with the total social security and pensions budget of over £200bn. Yet, as I have already found in my low-income constituency, many now think Labour is after their pension allowances, too: hardly clever politics.

The total cost of the winter fuel allowance is between £2bn and £3bn a year which is less than two per cent of the total budget. Means-testing is administratively costly, time-consuming and inefficient because of the many varied combinations of assets, capital and earnings among pensioners.

If means-testing went further than Labour’s proposal it would also create real unfairness at the cliff edge for pensioners on modest or low incomes. With the stigmatisation of benefit claimants already in overdrive, cutting back on universalism will marginalise and demonise.

The coalition’s erosion of universal child benefit has created real anomalies and unfairness. A family where one parent is earning more than £50,000 loses out while a family where each parent earns £45,000 (a total of £90,000) keeps it. The horrendous spending and economic predicament an incoming Labour government would face means restoring child benefit to top-rate taxpayers at a cost of £2.3bn cannot be a priority. But it would be nice to retain it as an aim.

Finally there is the troubling question as to whether the party is being dragooned into accepting Tory-Liberal Democrat spending plans after the next election. In which case why would voters choose a half-hearted Labour surrogate when the Tories promise the real thing?

The ‘nothing for something’ society


Wrong to Cut Winter Fuel Allowance for Wealthy Pensioners

Huffington Post

There are three main problems with Labour’s proposal today to cut winter fuel allowances for higher rate tax payers. First the money raised is estimated at 100 million which is peanuts in terms of the wider welfare budget let alone total government spending.

Second it begs the question; if winter fuel allowances are to be means tested then how far does the means testing go, does it stop at fuel or will TV licences, bus passes and senior rail cards come next?

Third, if middle Britain ceased to benefit from the welfare state through some of the few universal benefits that are left, how can we convince them to fund the larger part of that budget through their taxes? The worry is this is the top of a slippery slope towards US-type system of public services for the poor only, from which President Obama has struggled to escape with his health reforms.

The attack on pensioners’ allowances leaves a big question hovering over the future of the welfare state: is it for everyone, or just for the poor? William Beveridge’s 1942 report, the cornerstone of our welfare system, advocated a universal and contribution-based welfare state in the laudable hope of cementing social solidarity. Announcements such as todays alter that original aim dismantling the very universalism upon which that solidarity relies.

Labour’s announcement comes after a rising call from Tory Iain Duncan Smith and Liberal democrat Nick Clegg to either abandon pensioners’ winter fuel allowances, free TV licences and bus passes, or to means-test and tax them citing austerity, an ageing society and acute public spending pressures as justification.

Yet the winter fuel allowance is a symbol of social cohesion and respect for senior citizenship. In total it costs between £2bn and £3bn a year which is less than 2% of the total welfare budget; so, unless the means test threshold is so low as to be worthless, there’s not a chance of making major savings. Means testing is administratively costly, time-consuming and inefficient because of the many varied combinations of assets, capital and earnings among pensioners.

If it went further than Labour’s proposal today it would also create real unfairness at the cliff edge for pensioners on modest or low incomes who could lose a key component of their independence in old age.

While these benefits are trivial, relative to the whole budget, the social and political cost of taking them away could be huge: what would this say about a society of soaring bankers’ bonuses?

For lower earners these benefits are a few comforts guaranteed to them in old age, for middle to higher earners one of the few rewards received for consistent contributions to the welfare pot throughout their working lives.

Finally today’s Labour announcement raises the troubling question as to whether the Party is being dragooned into accepting Tory-Lib Dem spending plans after the next election.  Ed Balls’ otherwise brilliant demolition of the catastrophe wreaked by the Tory Lib Dem scorched earth economics leaves that question unanswered in his speech today.

Read More


The Next Coalition? Why Ed Miliband Needs To Get Nick Clegg’s Number


A senior Labour MP has urged Ed Miliband to start preparing now for a possible coalition with the Liberal Democrats because it will be difficult for the party to win an overall majority in 2015.

In an interview with The Independent, the former Cabinet minister Peter Hain said Labour needs to build personal relationships with the Lib Dems well before the next election and talk about forming an “anti-Tory alliance” in the event of another hung parliament. “We need back channels and to exchange mobile phone numbers,” he said.

Mr Hain, a close ally of Mr Miliband, was an unofficial go-between with the Lib Dems when no party won an overall majority in 2010. He wants Labour to learn lessons from the frantic five-day period in which Nick Clegg’s party held talks with both the Conservatives and Labour but ended up joining David Cameron in coalition.

He is prepared to say in public what many Labour MPs are thinking privately – that it will be hard for Labour to win an overall majority in 2015. “I don’t think Cameron can win the next election,” he said. “He did not win in 2010; the Tories are a divided party, especially on Europe; they have damaged a lot of people and are seen as incompetent.”

Mr Hain added: “I think Labour will be the largest party [in terms of seats]. The question is whether we can win a majority. I will be fighting tooth and nail for that majority. It will be quite difficult for us to win a majority straight after a heavy defeat [in 2010]…We could do it with a relatively low percentage of the vote. I think we will get a minimum of 35 or 36 per cent [of the vote] and we could edge above that.”

Mr Hain believes the rise of the UK Independence Party will make it even harder for any party to win an overall majority in an era of multi-party politics. “The old two-party model is bust. It was at its height in 1951, when 97 per cent of people voted either Conservative or Labour. In 2010, only two out of three did. Since then, it has got worse. The Lib Dems will not for a generation be the reservoir for the anti-establishment protest vote. Ukip is hoovering up most of that.”

The former Work and Pensions Secretary predicted a hung parliament before the 2010 election but said senior Labour figures, unlike their Tory counterparts, did not prepare the ground for talks with the Lib Dems. “Labour was in denial. Most of the leadership thought we were going to lose and were astonished that the Tories didn’t win an overall majority,” he admitted.

Unlike Mr Cameron, Gordon Brown was not on good terms with Mr Clegg. “The lack of any personal relationship was a big problem,” said Mr Hain. “Gordon was a bit chippy.”

He added: “It is about personal trust and relationships. Ed Miliband is a very open person. People warm to him. He is very different to Gordon…It’s not a question of becoming best buddies. It is about deciding we are against the Tories being in power.”

The Lib Dems demanded that Mr Brown stand down in the unsuccessful Lib-Lab negotiations and Mr Hain believes Mr Clegg would be in the same boat in 2015. “It is not for Labour MPs to choose other parties’ leaders. But a majority of Lib Dems would have preferred an alliance with Labour last time and would do next time, probably with a new [Lib Dem] leader.”

He believes Labour is a more natural partner for the Lib Dems than the Tories, citing their joint approach to Europe, the Leveson report on press regulation and a mansion tax on homes worth more than £2m.

Senior Lib Dems insist that, as they did after the last election, they would talk first to the party with the most seats to respect the voters’ wishes. Mr Hain, who was president of the Young Liberals in the 1970s, admits that in 2010, the “parliamentary arithmetic” was against the “progressive alliance” he wants to see.

But he believes that a Lib-Lab deal would be the only realistic outcome in a 2015 hung parliament – even if the Tories are the largest party. “If Cameron loses another election, which I think he will, I don’t see he will have any credibility for a second term,” he said.

Mr Hain, an early backer for Mr Miliband for Labour leader after the party’s 2010 defeat, said: “Labour is very well placed to win the next election and be the biggest party. We are united – that is one of Ed’s biggest achievements. Labour-inclined voters are really angry about what the Government is doing. Ed is still quite unknown by the public. In the heat and exposure of a general election, people will get to like him.”

Read More


We need to up our game


Especially given we were fighting county councils which were natural Tory or Lib Dem territory, Labour had some good results last Thursday: new mayors in Doncaster and North Tyneside, taking control of Derbyshire and Nottinghamshire councils, and even winning a county council seat in Witney – Cameron’s backyard. Our progress in the south was encouraging in places like Cambridge and Norwich where we need to win MPs in 2015.

The results showed we’ve come a long way under the leadership of Ed Miliband since 2010, but they also showed we have a way to go. If a general election was held tomorrow, Labour wouldn’t win a majority. This was always going to be a big ask – under any leader – after our terrible result in 2010.
But Ed has made great strides over the last two years, we have re-energised our activists, rebuilt our base, reached out to disaffected Lib Dems – all crucial steps to victory in 2015.

We’re half way there, both in terms of time lapsed and progress made. I’m confident we’ve done enough to stop the Tories winning outright, and produce another hung parliament. But the truth is if we want a majority in 2015, we need to be performing better than we are now.

The old Tory-Labour duopoly has been broken. UKIP will remain a force at the next general election, with momentum from next year’s European elections. The right will remain split, at the Tories’ expense. The Lib Dems will do badly in the national share of the vote but probably hold onto all or most of the seats where they are well dug in and contesting with the Tories; where they are fighting us they will lose. Labour is well placed in this new f our-party arena.

While we shouldn’t dismiss people’s concerns about Europe and immigration, this is not what will decide the next election. Nigel Farage will not be prime minister. Labour’s focus f or the next two years should be squarely on the economy and living standards.

We cannot afford to be equivocal about our economic policy. We need to be more up front with the public about our intentions. Yes, we will borrow more in the short term in order to generate the growth that will reduce borrowing in the medium term. It makes sense to do so with interest rates so low. We will borrow to invest in new homes, in major infrastructure projects, refurbishing schools, creating employment. Schemes that will stimulate the economy. But we will nevertheless run a tight fiscal regime.

The Tories are trying to cut their way out of the recession. We need to be clear we would grow our way out of it, a less painful and ultimately more successful approach. We need to make this case with confidence and def end it robustly.

I’m confident Labour can win the economic argument if Ed has the support of a loyal team around him, it’s important that all members of the shadow cabinet play their full role in explaining and def ending Labour’s policy and approach. Labour’s Treasury team need to get out on the stump now and work even harder. It shouldn’t just be left to Ed and Harriet to carry the heavy load, whether on the World at One, the Today Programme or anywhere else.

Victory in 2015 is in our grasp, and we’ve made great strides toward it under Ed’s leadership so far. But ‘one more heave’ won’t deliver a majority. We need to up our game.