If you were expecting a fight from Labour over welfare reforms, forget it.
Douglas Alexander, the new shadow work and pensions secretary, today moved to clarify Labour's stance on welfare by saying he will back phased reform of housing benefit and stressing the party's support for stricter incapacity benefit tests. He also said he was broadly supportive of plans for a universal credit, the centrepiece of Iain Duncan Smith's welfare white paper, due to be unveiled next week, but set a series of tests for his support. The universal credit will unify most benefits and tax credits into a single payment.
In his first interview since taking on what is likely to be a central political battleground, Alexander told the Guardian his preference was a Danish model of the state guaranteeing work, and then obliging people to take the job or lose benefit. "This is a form of conditional welfare. Real guarantees of work, but real sanctions if the offer is not taken up."
Duncan Smith, he said, had by contrast been obliged by the Treasury to follow an American punitive model of simply cutting benefit, regardless of whether work was available. In return for his £2bn universal credit scheme, Duncan Smith had agreed to £18bn of welfare cuts, many of which will reduce disincentives to work. Alexander and Duncan Smith are due to clash on welfare in a Commons debate on Tuesday.
Labour has been criticised, including by its former party general secretary Peter Watt, for appearing to be siding with the feckless poor against the hard-working squeezed middle, so appearing less credible on how to tackle the deficit. But Alexander listed a series of welfare reforms he was willing to accept, including changing access to disability living allowance, driving out fraud, temporary changes to the upgrading of some benefits, and testing the availability for work of incapacity benefit claimants.
On the planned reductions in housing benefit for those in the private rented sector – the issue that has led to allegations that as many as 80,000 poor families will be driven from their homes – he said Labour supported the principle. But critically, Alexander said, the government was making an error by making the changes in one year and by cutting the level of benefit down from the 50th to the 30th percentile of rents in the local area, a move he said would mean 700,000 of the poorest people losing an average £9 a week.
"The government are [sic] trying to pretend these rushed and arbitrary changes will affect a small number of people – it will affect hundreds of thousands of people," he said. He added: "If the government produced a proposal for a staged and lower percentile reduction over years that is something we could consider." But he said he was implacably opposed to plans from April 2013 to cut 10% of housing benefit from anyone claiming unemployment benefit for a year. "This is just punitive," he said.
Alexander acknowledged that Labour in office had made mistakes on welfare. The Labour government should have done more to tackle low pay job insecurity, he said, adding Labour came relatively late to tackling the large numbers placed on incapacity benefit for years by the Thatcher government. Labour had initially focused instead on reducing unemployment. He also conceded that the housing benefit bill had been forced to take too much of the strain "for generation-long failures in the housing market, principally the lack of affordable homes to rent and buy".
Challenged that Labour had been slow in office to reform welfare, he said: "We made significant reforms, but welfare reform is easier to assert than achieve. Many of the government's current reforms build on what we set in train." Alexander predicted: "Welfare is going to be a central battleground not just of political argument, but public discussions in the years ahead. Our responsibility is to protect people and help them into work. My grave fear is that this government, like the Thatcher government, will show themselves very good at welfare cuts, and very bad at getting people into work."
George Osborne, and his Liberal Democrat allies, had burnt a lot of credibility in trying to prove that the overall spending package was fair, when independent think-tank's had demolished those claims. He said the coming battle would not simply be about cuts or fairness, but about the pressure being applied on the living standards of hard-working families. He also asserted that many other Tory reforms in the spending review, including cuts to childcare, the freezing of tax credit, and the increase in commuter fares, created disincentives to work. He added that the localisation of council tax benefit proposed by Osborne risked complicating the simplicity of the universal credit system.
