This week shadow chancellor Ed Balls announced a range of new economic policies aimed at reducing the national debt, including forcing ministers to take a five per cent pay cut and a one per cent cap placed on any increase in child benefit for the first two years of parliament. Such a policy does have clear economic advantages and to some Labour members may do more to restore the party’s economic credibility. However, ultimately it risks disadvantaging the poorest people in society, whom Labour claim to support.
It is clear that those who are in the greatest need will be forced to bear the brunt of this economic burden. Given that the cost of living is predicted to rise, capping child benefit will mean that low-income families will continue to struggle to make ends meet. In pursuing this course, Labour would only be perpetuating the cycle of deprivation, keeping the poor at a disadvantage.
All to often, welfare is seen as a luxury within public spending, something that can be easily cut as those in receipt of welfare are often the most disenfranchised within the electoral system. This is simply not the case, welfare and child benefit are integral in sustaining the low-income families that will be most affected by the proposed reforms. The policy also extenuates what The Guardian has called, ‘the war on women’, in that women receive around a fifth of their income from welfare payments. The cap will have a direct impact on their ability to sustain themselves. Cutting money to children’s services also severs a vital lifeline for many women, and by adopting this policy, Labour are merely continuing the marginalisation of women’s needs established by the current Tory government.
It is clear that Labour are seeking to promote an appearance of economic responsibility, but in doing so, they are unwittingly sliding further into Conservative territory. The move is presumably designed to appease the doubts over Labour’s competency with regards to the economy. Although Labour need to regain the trust of the electorate, it should not be done in a way which turns its back so fully on the party’s socialist roots.
This is particularly significant given the recent results in the Scottish independence referendum. Despite a ‘No’ majority, 45 per cent of Scottish residents still remain unhappy with the current system, in many cases as a response to the policies of a Tory government they did not vote for. Labour are already at risk of losing Scottish support over their decision to back the ‘No’ campaign and a further pursuit of austerity measures regarding welfare can only be detrimental to this support. If the referendum demonstrated a decline in Scottish Labour, capping child benefit could mark the death of it.
Labour’s apparent disregard for its supporters is not nearly as concerning as the impact such a scheme will have on families reliant on welfare. Labour’s departure from its more traditional, benevolent stance towards benefits fails to recognise that the UK as a whole cannot expect to thrive if large portions of its citizens are struggling to survive. This decision will not only disappoint supporters, but also endanger the very people whose interests Labour claims to protect.