One of the most surprising things about George Osborne’s omnishambles budget statement was that it undermined his reputation as a canny – some might say devious – political operator. The autumn statement has gone some way to restoring this reputation. His proposal to cap benefit payment increases has set a potential trap for Labour. We need a much more sophisticated response than that suggested by the headline in Sunday’s Observer – ‘Ed Miliband to wage war on Osborne over benefit cuts’.
Within the article a ‘senior Labour figure’ suggested that there was a ‘caucus of “new Labour” figures believing it will be politically suicidal to leave the party open to charges that it sides with ‘scroungers’ and is in denial over the need to cut the benefits bill’. I’m sure this wasn’t meant as a good thing by the ‘senior Labour figure’, but frankly you can count me into this ‘caucus’. And incidentally I’m pretty sure it would include a large number of people who’ve knocked on doors recently and been told that the problem for Labour is that they think we caused the deficit and they’re not yet convinced we know how we’ll solve it.
The Tories want to paint us as a party which cares more about those unwilling to work than those struggling in work and who are careless with taxpayers’ money. This is a nasty way of pitting one set of poor people against another set, but the Tories’ polling will tell them that this is a strong message with voters. In the medium term, then, our ability to be able to get into government and to put right the unfairness and economic incompetence of this government depends on being able to change this view in the short term. This requires a more sophisticated approach to the trap set by Osborne than simply to jump into it even if this is accompanied by cheering from church and voluntary sector groups.
Ed Balls and the Treasury team have done sterling work in reframing the context for this decision. They are wholly right that there is a prior question about the government’s failure to deliver growth in the economy which is the reason we are faced with the need for further cuts. Paying out more in benefits is also part of the ‘automatic stabilisers’ which help to maintain demand in the economy at a time of recession. They are right to identify that the benefit cap would mostly hit those in work on low pay, so is not about ‘strivers versus shirkers’. They are right to identify the unfairness in providing tax cuts at the top and benefit cuts at the bottom and the fact that we are not all in it together when it comes to sorting out the deficit. Women are paying £3 for every £1 paid by men in Osborne’s tax, benefit and spending changes, for example.
So I am hopeful that there is also some really hard thinking going on about how to respond to the Osborne trap. How do we scale up the living wage campaign so that there aren’t so many people in work still needing benefits to help them make ends meet? Given the failure of the work programme to deliver job opportunities, what would we do to get people into work and cut the cost of unemployment? What are the cut-through headlines which show we’re serious about dealing with the deficit? In the same Observer piece, a ‘senior figure close to Miliband’ said, ‘Make no mistake, we would come down very hard on people who milk the system’ Let’s flesh out what this would look like and how to rebuild support for a modern welfare system focused on work and opportunity.
The battles over pasties, caravans, charities and grannies were gifted to us by Osborne’s ‘eye off the ball’ budget. This is a much more difficult challenge – our ability to rise to it in a principled, but politically mature, way will say much about our likelihood of success at the next general election.
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