The Blog

We Must Have the Confidence to Oppose Unfair and Damaging Tory Welfare Reform and Set Out an Alternative, Modern Labour Approach

Right now we're in danger of getting sucked into a false choice - defend the status quo supposedly to stand up for our principles or follow Tory plans supposedly to prove we support reform. Neither will work for Labour or for the country.

Tory plans to cut tax credits will hit working parents hard, undermine incentives to work, and push more children into poverty.

Of course Labour must oppose these plans - they are bad for children, bad for working families, bad for the economy, and ultimately bad for the taxpayer too.

The welfare system must change and develop, as it has since the Beveridge Report. But our job is to develop and champion alternative reforms based on Labour values and principles - including work, responsibility and tackling poverty - not follow Tory plans because we lost the election.

George Osborne's plans aren't just unfair, they fail all sensible principles of welfare reform. Working parents in low paid jobs are going to lose hundreds, and even thousands of pounds. Many will now be worse off in work as a result.

Work isn't being rewarded. Some parents will now find that for every pound they earn in additional pay 79p will now be taken away. How does that encourage people to work harder or earn more?

Plans in the welfare reform bill to cut tax credits for families with more than two children cause big problems too. Most of those families are working parents with three children, and many will end up worse off in work. But how does that help them, or the economy or the taxpayer if they end up working less hours or one parent giving up to stay home because they can't afford childcare anymore?

Nor does it recognise the reality of modern family life. Couples who each have children from a former marriage will have an incentive not to live together. And whilst it is all well and good saying that families should not have children they can't afford, in the real world families break up and its often women who are left struggling to work and look after the children. George Osborne's plans would heavily hit those single mums going out to work and push more of their children into poverty too.

The exemptions to the two child policy show just what a mess it is too. According to the Budget, mothers will be allowed tax credits for their third child have been raped. How on earth will that work? Are they seriously expecting rape victims to have to prove the crime all over again in a tax credits discussion with the DWP?

Meanwhile the Government's legislation doesn't just cause child poverty to rise, it scraps the target to end child poverty altogether. Yet surely we should be ashamed of the fact that in 21st Century Britain there are working parents forced to go to food banks to put a hot meal on the table. And far from protecting those far too sick or disabled to work, the Bill cuts support for many of them from £100 a week to £70 a week instead.

But it isn't enough for Labour to just argue against these plans, we need to set out an alternative approach.

Because the welfare system still doesn't work effectively enough to support work and security in the modern world. People are worried about the welfare system at the moment and the Tories exploit those concerns to try to justify cutting tax credits in this way. Budgets are also going to be tight while we get the debt and the deficit down, so we have to look for savings wherever we can.

That is why Labour called for a higher minimum wage and living wage in the first place, saving money as well as getting employees and better deal. So we should welcome the Government's planned increase at the same time as calling on them to go further for young people who have so far been left out. And its why we have long argued for more housing to stop the housing benefit bill going up and up.

But I want us to do more to set out a strong and principled Labour approach for the future. That is why I will set up a Welfare Reform Commission to look at how we best support families to get on in the middle of the 21st Century.

It needs to look at how the state best supports work, prevents poverty and delivers value for money. That means rethinking the Tories Universal Credit which started with sensible aims but has now been so badly wrecked by George Osborne that it won't provide the proper incentives or rewards for work that must lie at the heart of the system.

But it also means looking more widely at how people get the childcare, training and employment skills they need not just to work but to move up out of low paid and insecure jobs too. And how we cope with changing family pressures - so people can work and juggle caring responsibilities for older relatives as well as children.

We need to build in strong principles of obligation and responsibility to work for those who can alongside proper protection and support for those who can't through serious sickness or disability. So the Commission should draw on ideas such as the Future Jobs Fund under the last Labour Government which provided good quality opportunities for unemployed young people but with a compulsory requirement to take them up.

And it should look at the most effective way to lift children out of poverty in the modern economy so we can reaffirm our mission to end child poverty in a generation and make it mandatory for the OBR to assess all new government policies for their impact on child poverty.

Right now we're in danger of getting sucked into a false choice - defend the status quo supposedly to stand up for our principles or follow Tory plans supposedly to prove we support reform. Neither will work for Labour or for the country. We need to have the confidence to oppose unfair and damaging Tory plans and set out an alternative, modern Labour approach instead.

Yvette Cooper is the shadow home secretary and Labour MP for Normanton, Pontefract and Castleford