Labour and their ‘rescue’ of the Universal Credit – making Welfare work again? Some initial impressions

So, Party Conference season is well and truly underway. The Liberal Democrats have sought to persuade the electorate, their membership, the media, and perhaps even themselves that despite their consistently low polling percentages, they are a party of Government, and now in the hip and trendy South Coast city of Brighton, it’s Labour’s turn to (finally perhaps) set out their own agenda for 2015 and beyond.

Part of their blueprint involves offering greater access to childcare for primary school aged children, and more free childcare for nursery aged youngsters meaning (in their view) greater gender equality in the workplace and beyond, andmore opportunity for households to get both parents in work. It seems Labour are attempting in a time where wages are stagnating and living standards are declining, to set themselves out as the party of employment.

Indeed, at an event hosted by the Social Market Foundation today entitled ‘Making Welfare Work’, Stephen Timms MP, Shadow Employment Minister noted (amongst many other things) that in regard to work and employment, a future Labour Government rather than scrapping the current Coalition flagship welfare policy, the Universal Credit, would seek to ‘rescue it.’

Shadow DWP Secretary Liam Byrne in a speech to conference this afternoon confirmed this intended rescue (he also stated he his desire for ‘full employment’). However, this morning, when I put it to Timms that under the system of Tax Credits the financial reward from extra hours work by single person families (by either single parents is actually very small, and invited him to propose what a future Labour Government might do about this, he simply noted that ‘work incentives under the Universal Credit for second earners are incredibly low’, or words to that effect!

Timms was referring to the fact that the Universal Credit in its current guise doesn’t do that much in the way of incentivising many second earners going to work (the rewards for many primary earners aren’t exactly generous either by the way.) In any case, this implies in my view that any rescue by Labour are planning involves realigning the Universal Credit so that it favours a dual earner household model, that is, getting both parents into work. I’m speculating somewhat, but I think this is fair prediction to make. This would link in nicely with Labour’s newly announced Universal childcare plans highlighted above.

Many questions arise from both Timms answer and this new apparent policy direction. Firstly, will Labour do anything for low to middle income families that only have one person active in the workplace apart from doing their very best to encourage the second earner into the workplace? Is this new direction the only viable alternative? What about families where for a number of valid reasons only desire one earner to be in work? Whilst these families might be a minority in Britain, shouldn’t they be catered for?

Thirdly, is this strong push for paid work healthy for a society? Could this move towards greater employment participation be seen as part of a continuing Labour trend to move towards pushing more citizens away from state support and reliance and into the ‘control’ of the market? Does Labour under Ed Milliband see higher participation in the labour market by both parents, as a key combatant of poverty, and does this come at the expense of state funded welfare? Are all these things to be encouraged?

The questions I have posed here are just a few of many that could be asked. Yet, in my view, to answer questions about work incentives for one person households (whether they be single parents or one-earner couples) by implying that both members of the couple should be in the labour market suggests Labour considers households where both parents work (8am – 6pm?) as the ideal. This in turn might demonstrate that Labour hasn’t adequately considered both other viable alternatives regarding childcare (why shouldn’t home based childcare by a parent be recognised?) and how other low to middle income household structures in Britain can be helped.

Thus, one is left asking: When it comes to welfare and employment, Is Labour the party of the dual earner household or of all families?

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