Pensioners have been cushioned for too long. It’s time for Labour to get off the sofa on welfare

Welfare policy casts a long shadow for the Labour party. During the campaign for the 2015 general election a pollster asked its clients for an image they regarded as encapsulating the Labour party. The most common response was a man lying lazily on a sofa. The something-for-nothing party, the hand-out not hand-up party, the party of welfare not work, which is, of course, a disaster for a party whose actual name is Labour.

This image haunts the party now, as this week the chancellor introduced the universal credit (removal of the two-child limit) bill in the House of Commons. There is a good case for this bill. The social democratic case, which we will hear a lot as the legislation passes through parliament, is that it will mean another half a million British children will live in households whose income is now just above, rather than just below, the poverty line. The liberal argument for the bill is that though it is prudent for parents not to have children they cannot afford – and many people do make such choices – none of this is the child’s fault and public support is therefore warranted.

All that said, it is still the case that the only welfare change that Labour will move so far involves an increase, rather than a reduction, in the welfare bill. Twice the government has gestured towards change and twice it has blinked. The political capitulation over the winter fuel allowance instructed campaigners and recalcitrant backbenchers that this government folds under pressure. Then Liz Kendall tried, as secretary of state for work and pensions, to reduce the growing bill for disability benefits. Colleagues forced her to desist and she was moved into a new portfolio as a reward. Her successor, Pat McFadden, is the government’s best political operator and he has been put in that role so that when the time is right, the government will try again on welfare reform. Removing the two-child cap is in part political preparation for less pleasant business.

McFadden, the antithesis of the lazy man on the sofa, is seized by the need to act. This coming financial year the nation will spend £323bn on social security. That is close to a quarter of all public expenditure and a tenth of gross domestic product. It is worth breaking the numbers down because there are two conspicuous problems. The first is that disability benefits are rising quickly amid a surge of mental health diagnoses. The second is that the bulk of the welfare bill, 55% to be precise, is spent on pensioners.

It is not hard to identify where the problem is but welfare still poses an acute dilemma like nothing else. Imagine you are the secretary of state and your policy expert informs you that one in four of all working-age adults are claiming disability benefits. You know very well that this was never what disability benefit was designed for. You know this is not financially viable. You resolve to act and then your political adviser points out that a policy designed expressly and deliberately to take money away from one in four voters of working age might not be the capital idea you first thought it was. So, it’s a good idea; it’s a terrible idea. It has to happen; it cannot be allowed to happen.

Then you recall the haunting image of the lazy man on the sofa and you conclude that, as hard as it may be, the Labour party cannot afford to allow the welfare bill to grow. That is to say nothing about the rights and wrongs of the issue itself, the other things the money might buy, the better lives that could be led by people who have come off welfare and have got back into work. So if the government concludes that action is imperative, what to do?

Kendall’s attempt, though ineptly handled, was at least pointing at one of the two right places. It is possible that McFadden will be able to devise a plan that looks sufficiently unlike the Kendall sally to revisit disability benefits. Possible, but difficult. That really leaves just the one glaring option. In 2010, in one of the early acts of the coalition government, George Osborne courted the votes of conservative pensioners by ensuring the state pension would rise by whichever was the highest between the rate of inflation, average earnings or 2.5%. The pensions triple lock is the very definition of the triumph of politics over policy, introduced to create a cadre of client voters. There is no reason, apart from politics, why wealthy pensioners should receive free bus passes and TV licences. It is a terrible policy, but the distribution of the vote in 2015, which showed pensioners overwhelmingly voted Conservative, showed it was good politics.

Imagine now if the chancellor had opened her budget in November with words to the effect of the following: “There will have to come a day when a chancellor of the exchequer comes to this House and tells you a truth that you know already. There will have to come a day when a chancellor stands at this despatch box and tells you, in all honesty, that we cannot, sad to say, afford the pensions triple lock. Well, that day is today and that chancellor is me.” It would have been electrifying, and it would have been true.

In fact, it might have been electrifying because it is true. Boldness is the only way through the paradox of policy and politics. There is a dividend for clarity and honesty in politics, even when the policy is unpopular. This is not exactly a government with a reputation for knowing what it wants. It does not suffer from the accusation that it makes too many tough choices. To settle on a difficult decision, to do the right thing out of conviction, would be leadership. Deep down, enough people know this needs to happen. It’s time for Labour to get up off the sofa on welfare.

Photograph by Amit Lennon/The Observer