This is set to be a big week for Labour. Today Ed Balls launched a foray into pensioner benefits, later this week Ed Miliband is set to address the question of working age welfare. The question is what principle (or combination of principles) should underpin any new approach. The shadow chancellor’s announcement today points towards more means-testing but in January, Miliband defended universal benefits and since then Liam Byrne has promised that Labour would “strengthen the old principle of contribution”.
Means-testing and the contributory principle are, of course, uneasy bedfellows; one judges eligibility by what people need to take out of a system, the other by what people have put in. Labour should plump for more emphasis on the latter. This matters most for working age welfare, which has been haemorrhaging support in recent years. International evidence shows that the UK has one of the least generous welfare systems for the unemployed –and one of those with the weakest relationship between what people have paid in and what they get out. The two are linked: people tend to support systems with a stronger contributory element.
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