Can Miliband beat Osborne on Welfare?

December 9, 2012 1:48 pm

There is a political speech that I will never forget. It was by Neil Kinnock after Labour had just lost the 1992 General Election. He described it as the triumph of fear over hope. It was the first general election I’d followed and it has left its mark. Labour made enormous errors over its tax policy in that election. George Osborne wants to make welfare the equivalent of tax in 1992 next time round.

In that context, the interventions from Ed Miliband in the press this morning are intriguing. The only logical conclusion is that Labour will oppose the Government’s new welfare bill. Battle lines have been drawn.

Ed Miliband has a habit of getting ahead of the political debate. He did on corporate irresponsibility and again on press intrusion and corruption. And, lets be honest, he did so with his own leadership campaign. He is either astute or lucky. Whichever it is, as long as he doesn’t lose the knack, it will bode well politically. Once again he is setting himself against conventional political wisdom. How will it play out?

Today’s YouGov poll for the Sunday Times would seem to lean in the direction of the conventional political wisdom: that this is not a smart short or long term political move by Miliband. 52% think that George Osborne’s three year, 1% increase for most benefits is either right or too generous (19% favour a cash freeze). A third of Labour voters are in this camp. 35% of the total are against the real terms cut.

Open and shut case? Not quite. Firstly, if you look at the wording of the YouGov question it specifies benefits and doesn’t mention tax credits. My hunch is that people don’t see tax credits as benefits. Humans are conditioned with deep loss aversion. If you ask them about a loss of credits that will hit them rather than other people then the polling result could be very different. There is a framing issue here.

Moreover, there is a broader context. The major strategic error that George Osborne has made is the cut in the 50p rate of tax supported by some pretty flimsy calculations by HMRC. He failed to rectify it in the Autumn Statement.

The biggest irony of all is that if the Prime Minister hadn’t stopped the Chancellor capitulating to Liberal Democrat demands for a mansion tax, then this welfare debate may be slightly clearer cut. Ironically, the Liberal Democrats’ proposal would have given George Osborne more political cover to limit in-work credits. People will be confused why they have to suffer while the wealthiest seem to suffer minimally despite being able to afford it the least.

A safe counter-position for Labour is to oppose the squeeze on in-work benefits and promising to protect all benefits for the disabled. This could be funded by a commitment to reintroduce the 50p rate of tax or introduce a mansions tax. As a political position, this would likely evade the Osborne trap. It may even spring it on the person who set it.

The problem here is that this would mean deserting some of the weakest and most needy in society. Just how one nation is that? So it would appear that Labour is going to oppose the whole package. This creates two issues: one fiscal and one political. The fiscal problem is that would Labour would have to show how it would plug a £3.5billion per annum hole by 2015. What’s more, you can guarantee that there will be further cuts to come in the Spending Review 2013. And politically, there is still a widespread feeling that out of work welfare recipients do not do all they can – in general  – to haul themselves back into work. That’s just where the public is, like it or not.

For Miliband’s gamble to pay off depends on this latter condition changing. For months now left-wing columnists have been forecasting that public attitudes to welfare are about to go through a sea-change. There has been some minor shift but no more. An avalanche of stories about food banks, pay-day loan (legal) sharks, fuel poverty, families (veterans? disabled?) in unsuitable accommodation and yes, there could be a shift. If this happens then yet another Miliband gamble has paid off. Maybe, as Will Hutton rather histrionically argues in this morning’s Observer, people will feel that there is something going on that doesn’t quite chime with what it is to be part of ‘western civilisation’. It is just that there is little sign of this as yet.

So the likely outcome is a scrappy no score draw. Hope and fear are not clearly defined in this battle – Osborne has botched the operation luckily. The problem Miliband faces is that he still needs to convince people that Labour does care as much about every pound of public spending as the individual taxpayer does. Despite moves in a sensible direction earlier this year, Labour is just not demonstrating that it understands people’s anxieties about the party. ‘We told you so’ and ‘aren’t the Tories mean’ politics isn’t delivering. That is why Osborne was able to float through this week despite an appalling Financial Statement in every conceivable respect.

On the question of welfare and politics, the conventional wisdom is only half right. This welfare battle will be fought and there is unlikely to be a clear winner. But the bigger strategic issues remain – how can Labour convince people it can be trusted? Only by more firmly addressing this – being clear that Labour would manage the public finances effectively but in a fairer fashion than the Coalition – will hope have a chance to defeat fear and another 1992 can be avoided. Miliband is taking his stance as a moral rather than a political position and that is to his credit. That doesn’t mean that there aren’t political ramifications. Unfortunately, Labour may just be allowing Osborne to get away with it. And that is of no benefit to the weakest and most vulnerable at all.

  • Amber_Star

    Labour might want to try linking the benefits issue more strongly to Labour’s proposal of a living wage.
    1. In-work benefits are needed because people aren’t paid enough to live on; &
    2. Out-of-work benefits are needed because, when wages don’t cover living costs, it logically follows that people cannot save for periods of unemployment.
    Labour could also attack the underlying assumptions. The government’s figure for savings assumes that ‘x’ people will be unemployed & ‘y’ people will still be earning less than they need to live on with ‘z’ children in poverty for the next 3 years. Implementing the living wage would make most of this pain unnecessary etc.
    Well, Ed M probably has a better plan than mine about how to face Osborne down on this issue. As Anthony says, Ed has a good record of surfing the wave when he’s widely expected to wipe out.

  • Amber_Star

    Labour might want to try linking the benefits issue more strongly to Labour’s proposal of a living wage.
    1. In-work benefits are needed because people aren’t paid enough to live on; &
    2. Out-of-work benefits are needed because, when wages don’t cover living costs, it logically follows that people cannot save for periods of unemployment.
    Labour could also attack the underlying assumptions. The government’s figure for savings assumes that ‘x’ people will be unemployed & ‘y’ people will still be earning less than they need to live on with ‘z’ children in poverty for the next 3 years. Implementing the living wage would make most of this pain unnecessary etc.
    Well, Ed M probably has a better plan than mine about how to face Osborne down on this issue. As Anthony says, Ed has a good record of surfing the wave when he’s widely expected to wipe out.

  • Amber_Star

    Labour might want to try linking the benefits issue more strongly to Labour’s proposal of a living wage.
    1. In-work benefits are needed because people aren’t paid enough to live on; &
    2. Out-of-work benefits are needed because, when wages don’t cover living costs, it logically follows that people cannot save for periods of unemployment.
    Labour could also attack the underlying assumptions. The government’s figure for savings assumes that ‘x’ people will be unemployed & ‘y’ people will still be earning less than they need to live on with ‘z’ children in poverty for the next 3 years. Implementing the living wage would make most of this pain unnecessary etc.
    Well, Ed M probably has a better plan than mine about how to face Osborne down on this issue. As Anthony says, Ed has a good record of surfing the wave when he’s widely expected to wipe out.

    • http://twitter.com/pfisucks tollick, john

      I have a dream of a place (let’s call it the UK) where a thoughtful and honest government (let’s call this the next Labour government) forces all employers to pay living wages that require no tax credit top ups, and all landlords charge affordable rents so no one in work is forced to bring up their children in poverty.
      In this place surplus workers are employed by local authorities and a new “National Service” Force to work on infrastructure and community projects.
      People with disabilities are encouraged to contribute what they can to the good of their community in return for “living” benefits.
      No one receives extra benefits for having more than 2 children.
      At this point I usually wake up.
      Is any of this possible????

  • LondonStatto

    “In-work benefits are needed because people aren’t paid enough to live on;”

    If ther minimum wage isn’t enough to live on then either (a) the minimum wage needs to be increased, or (b) the income tax personal allowance needs to be increased.

    The present government is, at least, doing (b). And it didn’t double the lowest rate of income tax either.

  • LondonStatto

    “In-work benefits are needed because people aren’t paid enough to live on;”

    If ther minimum wage isn’t enough to live on then either (a) the minimum wage needs to be increased, or (b) the income tax personal allowance needs to be increased.

    The present government is, at least, doing (b). And it didn’t double the lowest rate of income tax either.

  • LondonStatto

    “In-work benefits are needed because people aren’t paid enough to live on;”

    If ther minimum wage isn’t enough to live on then either (a) the minimum wage needs to be increased, or (b) the income tax personal allowance needs to be increased.

    The present government is, at least, doing (b). And it didn’t double the lowest rate of income tax either.

    • rekrab

      So your saying everyone on the minimum wage income has had a wage lift of something like 95 pence an hour due to the threshold of income tax being lifted to a higher level? well listen in!!!! if the income bracket rises the offset in tax-credit is lowered, so the reality for some in work will be a lower general income and that is unfair.

    • Dave Postles

      Who gains most from the personal allowance being increased?

  • rekrab

    106 years ago new liberalism was born when Asquith took over from Bannerman and appointed Llyod George and Churchill to prominent cabinet positions.The laissez-fare system of self help had been blasted apart by the Rowntree and Booth reports and lets not forget that the biggest threat to the largest party’s at that time was the creation of the labour party, Llyod George and Churchill both knew that if government didn’t act on behalf of it’s peoples needs, then there would be only one winner in town come election time.106 years on from those reforms Ed has got to be on to a winner.Like someone once said “It’s a no brainer”

  • rekrab

    106 years ago new liberalism was born when Asquith took over from Bannerman and appointed Llyod George and Churchill to prominent cabinet positions.The laissez-fare system of self help had been blasted apart by the Rowntree and Booth reports and lets not forget that the biggest threat to the largest party’s at that time was the creation of the labour party, Llyod George and Churchill both knew that if government didn’t act on behalf of it’s peoples needs, then there would be only one winner in town come election time.106 years on from those reforms Ed has got to be on to a winner.Like someone once said “It’s a no brainer”

  • rekrab

    106 years ago new liberalism was born when Asquith took over from Bannerman and appointed Llyod George and Churchill to prominent cabinet positions.The laissez-fare system of self help had been blasted apart by the Rowntree and Booth reports and lets not forget that the biggest threat to the largest party’s at that time was the creation of the labour party, Llyod George and Churchill both knew that if government didn’t act on behalf of it’s peoples needs, then there would be only one winner in town come election time.106 years on from those reforms Ed has got to be on to a winner.Like someone once said “It’s a no brainer”

  • Serbitar

    It is vital for the Labour Party to get on the right side of things now and oppose the real terms cut in welfare to the poor. The tide is about to turn. Osborne’s cynical nastiness as far as his real terms cut to welfare will shortly begin to unravel just like some of his earlier ill thought out although milder aberrations did, e.g., the caravan and pasty tax. From next April onward the real pain of Osborne’s cuts will begin to be seen EVERYWHERE. It will well up like a rising tide of pain and misery to lap at the feet of EVERYBODY in too obvious a manner for ANYBODY to be able to ignore.

    The point that creatures like Osborne miss is that although employed hard-working men and women frown upon people who live long-term on benefits, the employed don’t actually want to see anyone made homeless, or starve, or freeze, or face destitution, or suffer the torments of the damned. In my experience working people are kind rather than cruel and only really expect their workless peers to attempt to do what can, whenever they can, to try to pull their own weight, as best they may.

    The problem is that for many the opportunity to work and earn and keep themselves just isn’t there at present. The recently released statistics spelling out the abject failure of the Tory Work Programme demonstrates this conclusively: despite the best efforts of profit making highly incentivised “pay by results” private companies specialising in training and job finding, given carte blanche to “do whatever is required” to get participants into “sustainable work”, including stripping benefits from them for two weeks to three years if they don’t toe the line, only managed to get about 3.5% of people referred to them into six months paid work. These are the facts. For many people in too many parts of the country work at the moment is an impossible dream; even with millions of pounds worth of help from private companies supposedly expert in managing human resources.

    Who are the unemployed anyway? Are they members of some subclass of humanity? An inferior parasitic species that deserves to be reviled, hated, impoverished and scorned? The Tories have worked overtime to sell lies tantamount to this with full-on help from the media for years but it isn’t true. The truth of the matter is that the overwhelming majority of men, women and families currently eking out their lives on benefit were formerly hard working “strivers” themselves, who are currently unable to secure gainful employment because of economic, political and other forces outside the compass of their control. They are us. We are them. There is no difference whatever the Tories might say to the contrary as they poison the well and try to divide and conquer.

    George Osborne and David Cameron are despicable and cruel wretches.

    Men and women of good heart should never side with such people.

    I believe that Ed Miliband is a man of good heart.

  • Serbitar

    It is vital for the Labour Party to get on the right side of things now and oppose the real terms cut in welfare to the poor. The tide is about to turn. Osborne’s cynical nastiness as far as his real terms cut to welfare will shortly begin to unravel just like some of his earlier ill thought out although milder aberrations did, e.g., the caravan and pasty tax. From next April onward the real pain of Osborne’s cuts will begin to be seen EVERYWHERE. It will well up like a rising tide of pain and misery to lap at the feet of EVERYBODY in too obvious a manner for ANYBODY to be able to ignore.

    The point that creatures like Osborne miss is that although employed hard-working men and women frown upon people who live long-term on benefits, the employed don’t actually want to see anyone made homeless, or starve, or freeze, or face destitution, or suffer the torments of the damned. In my experience working people are kind rather than cruel and only really expect their workless peers to attempt to do what can, whenever they can, to try to pull their own weight, as best they may.

    The problem is that for many the opportunity to work and earn and keep themselves just isn’t there at present. The recently released statistics spelling out the abject failure of the Tory Work Programme demonstrates this conclusively: despite the best efforts of profit making highly incentivised “pay by results” private companies specialising in training and job finding, given carte blanche to “do whatever is required” to get participants into “sustainable work”, including stripping benefits from them for two weeks to three years if they don’t toe the line, only managed to get about 3.5% of people referred to them into six months paid work. These are the facts. For many people in too many parts of the country work at the moment is an impossible dream; even with millions of pounds worth of help from private companies supposedly expert in managing human resources.

    Who are the unemployed anyway? Are they members of some subclass of humanity? An inferior parasitic species that deserves to be reviled, hated, impoverished and scorned? The Tories have worked overtime to sell lies tantamount to this with full-on help from the media for years but it isn’t true. The truth of the matter is that the overwhelming majority of men, women and families currently eking out their lives on benefit were formerly hard working “strivers” themselves, who are currently unable to secure gainful employment because of economic, political and other forces outside the compass of their control. They are us. We are them. There is no difference whatever the Tories might say to the contrary as they poison the well and try to divide and conquer.

    George Osborne and David Cameron are despicable and cruel wretches.

    Men and women of good heart should never side with such people.

    I believe that Ed Miliband is a man of good heart.

    • Dave Postles

      Another eloquent comment by Serbitar. People in employment and underemployment will feel the effect of this constraint on benefits as well as those suffering unemployment. Who believes that inflation will not push up to 3% over the winter and spring? – possibly only Merv the Swerve.

  • rekrab

    Let us remind this chancellor of the reception he received when he entered the Olympic stadium back in August!!!!!!

  • rekrab

    Let us remind this chancellor of the reception he received when he entered the Olympic stadium back in August!!!!!!

  • rekrab

    Let us remind this chancellor of the reception he received when he entered the Olympic stadium back in August!!!!!!

  • David B

    You are trying frame this debate in the terms of what is fair to those that recieve benefits. Osborn is looking at the “squeezed” middle who are forced to pay the bills but cannot afford them any longer and asking what is fair to them.

    Miliband has hung himself of the fairness hook only to discover that it is a selfish place, because fairness to one is unfair to another and the majority in the squeezed middle find capping benefit fair.

  • David B

    You are trying frame this debate in the terms of what is fair to those that recieve benefits. Osborn is looking at the “squeezed” middle who are forced to pay the bills but cannot afford them any longer and asking what is fair to them.

    Miliband has hung himself of the fairness hook only to discover that it is a selfish place, because fairness to one is unfair to another and the majority in the squeezed middle find capping benefit fair.

  • David B

    You are trying frame this debate in the terms of what is fair to those that recieve benefits. Osborn is looking at the “squeezed” middle who are forced to pay the bills but cannot afford them any longer and asking what is fair to them.

    Miliband has hung himself of the fairness hook only to discover that it is a selfish place, because fairness to one is unfair to another and the majority in the squeezed middle find capping benefit fair.

    • http://twitter.com/rlpkamath Rahul Kamath

      I think you are basically correct and am puzzled as to why the article says that Osborne has botched it. Public perception could change if the issue is framed as millionaires vs the rest of us (Labours story) vs hard working Britons vs skivers (Tory story). Tax credits are the unknown factor here though as of course they apply to hard working Britons. I also think the real issue is less unemployed vs employed (except for chronic cases, people do move back and forth) and more some groups getting welfare (HB recipients in central London, large families) vs groups in similar income brackets not getting anything.

    • Dave Postles

      The ‘squeezed middle’ is fictitious. Who constitutes the ‘squeezed middle’? Is the comparison between poor people who are finding it difficult to buy a loaf of bread and have to visit the food bank as opposed to the ‘squeezed middle’ who cannot drive as many miles as before or who will have to buy a less expensive car? The mantra about the ‘squeezed middle’ is becoming tedious. It was the lower- middle-class complaints which brought us the disaster of Thatcherism. If this ‘squeezed middle’ finds penalizing the poor ‘fair’, then this country has sunk into a quagmire from which it will never recover.

    • leslie48

      But we have to remind the “squeezed” middle that nasty car accidents, sudden serious illnesses, large scale redundancies, downsizing, separation from partners, widowhood, children with disabilities…that any of life’s misfortunes can happen and threaten their income; this is social democracy of course but while most Europeans get this here in the UK we have the daily Tory tabloid propaganda machine’s ugly demonisation.

      • jaime taurosangastre candelas

        You are correct in the more dramatic events, but a significant proportion of the total bill is spent on the more mundane benefits: housing benefit, child benefit, SMP, Winter Fuel, and so. There is room to “rein back” the total levels spent on these, particularly by making some elements truly progressive and not universal. That would “free up” money to be re-applied to those benefits grossly underfunded, such as the paltry JSA, and the total amount spent not change.

        To be simplistic, I think we as a nation spend money on far too many types of benefits and so the money is spread thinly***, rather than concentrate on those benefits which are really needed, and fund them properly.

        *** and this is defiantly inefficient. My family does not need child benefit, yet we receive it and invest it into University accounts for the children, to reduce the future impact of fees. It would be better as a nation if the total amount of child benefit was invested in a smaller amount of children whose parents really need the help. I am trying to be not proud or boastful, it is a matter of fact that when my children go to university I could – and should, and probably will – fund their studies with a single cheque. That opportunity is not available to many children, and it should be.

        Even Gordon had it correct with his “baby bonds” idea, and while we have them and top them up monthly with the CB, they seem to be little advertised now.

  • Forlornehope

    To think that John Smith “made enormous errors” in Labour’s tax policy for the 1992 election, to wit 10p on National Insurance for most swing voters, you have to believe that he was very, very stupid but he wasn’t. It is far more credible to accept that he did this deliberately and then try and imagine what he could possibly have gained by it.

  • rekrab

    Anthony’s seems to saying that Ed faces a similar fate as Neil Kinnock? I think Anthony has spent to much time studying American politics.

  • rekrab

    Anthony’s seems to saying that Ed faces a similar fate as Neil Kinnock? I think Anthony has spent to much time studying American politics.

    • aracataca

      Is he saying that?

    • aracataca

      Is he saying that?

    • aracataca

      Is he saying that?

    • aracataca

      Is he saying that?

      • http://twitter.com/anthonypainter Anthony Painter

        No.

        • aracataca

          Thought so Anthony.

      • rekrab

        Why start an article relating to that elusive labour victory that didn’t go with the pre polls?

  • leslie48

    Will Hutton is always bang on. He is one of the few who since Wednesday has articulated a brilliant attack on Osbourne. We have to remind the electorate what the point of the welfare state is; many have forgotten about life’s misfortunes. Interesting though that we can take billions from poor working families and give it to corporates ( who we will pay less tax ), and wealthy couples who can put even more of their money into tax free ISAs ( surely that could have been frozen at 22,560 tax free pounds for two people ).

    Of course its the way you get this over to the public – its Robin Hood in reverse. But lets never forget Gramsci who taught us that one ideology never dominates all the time. There’s a mixture of ideologies in ‘contest’ and one that is easy to sell is rich corporates, millionaires getting more money in April and growing low incomes. Our electorate despite what the clever Eton boys think- do have a sense of decency.

  • Open_Palm

    Is it me or do I detect a tinge of New Labour-esque apprehension in this article? It is a strange day indeed when right wing writers like Tim Montgomerie and Mathew d’Ancona are urging caution in welcoming Osborne’s benefits uprating bill whilst the author of this piece is suggesting Messrs Montgomerie and d’Ancona have less to worry. Strange day indeed.

  • Daniel Speight

    You know Anthony at some point the Labour Party has to take a principled stand no matter how dire the consequences, which in this case I suspect are a lot less dire than you would suggest. Otherwise, what does the Labour Party become except for another centrist party filled with careerists fighting for their own personal happiness as opposed to that of the citizens of this country?

  • Daniel Speight

    You know Anthony at some point the Labour Party has to take a principled stand no matter how dire the consequences, which in this case I suspect are a lot less dire than you would suggest. Otherwise, what does the Labour Party become except for another centrist party filled with careerists fighting for their own personal happiness as opposed to that of the citizens of this country?

  • Daniel Speight

    You know Anthony at some point the Labour Party has to take a principled stand no matter how dire the consequences, which in this case I suspect are a lot less dire than you would suggest. Otherwise, what does the Labour Party become except for another centrist party filled with careerists fighting for their own personal happiness as opposed to that of the citizens of this country?

  • Daniel Speight

    You know Anthony at some point the Labour Party has to take a principled stand no matter how dire the consequences, which in this case I suspect are a lot less dire than you would suggest. Otherwise, what does the Labour Party become except for another centrist party filled with careerists fighting for their own personal happiness as opposed to that of the citizens of this country?

  • Daniel Speight

    You know Anthony at some point the Labour Party has to take a principled stand no matter how dire the consequences, which in this case I suspect are a lot less dire than you would suggest. Otherwise, what does the Labour Party become except for another centrist party filled with careerists fighting for their own personal happiness as opposed to that of the citizens of this country?

  • Daniel Speight

    You know Anthony at some point the Labour Party has to take a principled stand no matter how dire the consequences, which in this case I suspect are a lot less dire than you would suggest. Otherwise, what does the Labour Party become except for another centrist party filled with careerists fighting for their own personal happiness as opposed to that of the citizens of this country?

  • postageincluded

    Don’t let Kinnock’s bitterness mislead you, Anthony. His defeat in 1992 wasn’t “the triumph of hope over fear” at all. A study conducted by the party following the election pinned the blame of a variety of causes including anti-Welsh racism, the Sheffield Arena Embarassment, and Neil’s head in a lightbulb. A major contributor was the post-Poll-Tax disenfranchisement of many Labour voters – without which we’d probably have had a hung parliament. It may suit the Blairist narrative to assert that “fear beats hope, so make them afraid” but that’s not the only analysis available.

    As for the YouGov results on cuts to benefits – it’s push-polling. Respondents are given three options: a) 1% b) 0% c) inflation or more. There is no option for just “in line with inflation”, so the respondent is forced to choose between giving claimants a possibly greater than inflation increase or giving them less than that. When YouGov does a poll that gives the option of being fair to claimants we can talk about the results, not until then.

    • John Reid

      I disagree it was the triumph of fear over hope, the fear that Laobur couldn’t run the economy couldnt control union militantantism and that unions still wanting more powers and funding loabur could get them

  • trotters1957

    Benefits were called “the social wage”, because that is what they are for those in work.. Perhaps if we stopped using the same language as the Tories we might be able to reframe the argument.

  • http://twitter.com/gunnerb peter scott

    We all need to oppose cuts in Welfare benefits because a decent level of Benefits is Our insurance policy. Many of today’s workers will be relying on Benefits tomorrow if Osborne continues with his ideological assault on the Welfare State. Workers have paid into National Insurance and Govt have used the fund to bail out the banks etc. Introduce taxes on the idle rich and if they leave lock them out they cant take their mansions and country estates with them. Sell the Governments Art collection that adorns Ministerial offices, cancel Trident if we have no decent welfare system we don’t need nuclear weapons to defend whats left.

  • http://twitter.com/LouieWoodall Louie Woodall

    Once again Anthony frames the challenge facing Labour within a strict Tory paradigm.

    The pace and scale of cuts has been dictated to the country by the Coalition, and they are shifting their own timetables month by month. Why should Labour dance to their tune?

  • brianbarder

    Labour should surely offer a clear choice between the coalition’s policies of austerity and cuts all round, including swingeing cuts to welfare benefits, and Labour’s alternative of giving priority to economic recovery (I think the word ‘growth’ begs too many questions) as the most effective road to reducing the deficit and re-balancing the economy. Both approaches entail increased borrowing in the short term, but under the Labour strategy the additional borrowing would be devoted to reviving aggregate demand in the economy, including by massive public investment in infrastructure projects, halving VAT and NI contributions, and increasing instead of cutting benefits, thereby also reviving business confidence and a motive for recommencing investment activity and the hiring of labour. The Labour party can justly claim that their approach will be more effective, more quickly, in starting to reduce the deficit, and that it will reduce the benefits bill, not by condemning the most vulnerable and poorest to penury but by stimulating the labour market and investment, decreasing the numbers on benefit and increasing the number of people in work and paying taxes. The volume of extra borrowing required can be minimised by increased taxes on the rich, reduction of tax-dodging by closing tax havens in territories within UK jurisdiction, and sharp cuts in the absurdly swollen defence budget, including preeminently abandoning the “independent” (not) nuclear “deterrent” (which has no-one to deter).

    The coalition’s approach can be exposed as holding out little or no hope of economic recovery as long as the economic resources needed for recovery remain unused on such a scale, with masses of would-be working people unemployed and the banks sitting on piles of cash that business lacks the confidence to borrow for expanded employment, investment and production.

    A major parallel objective should be to begin the long-haul effort to reduce the present gross inequalities of income and wealth in society, on both ethical and economic grounds.

    All this would add up to a much more fair, humane and constructive alternative to coalition hair-shirt masochism, or perhaps we should say sadism, which hurts the poorest and vulnerable the most, and above all which doesn’t work. The Tories, as coalition senior partners in crime, can be ruthlessly exposed as seeking to dismantle the welfare state for purely doctrinaire and ideological reasons, under cover of their futile and heartless obsession with reducing the deficit without damaging the interests of their rich supporters and funders. Labour need make no concessions to such an indefensible ideology.

  • PaulHalsall

    Many people are now facing hunger. Not starvation, but hunger none the less. And cold.

    The core survival foods of tuna (28p to 50p in a year), sausages (£1.50 to £2), mince (still cheap, but there is a limit with what you can do), pasta (70p to £1.12 in a year) and potatoes have all gone up way beyond inflation. Brassica’s (Broccoli, sprouts, Cauliflower, up 70%). Canned store brand vegetables go up by around 10% a year (Mushy Peas from ASDA 6p to 16p this year.)

    Fuel for heating and electricity goes up by 16%-20% per year. (Like many people I use PAYG cards – because I cannot face a big bill – and the gas meter is spinning at £1.30 a day right now).

    Bus fares go up much faster (It can now cost one £3 to go and sign on for £70 pw Jobseekers’ Allowance). (In 2007, the same fare was £1.40)

    Meanwhile, as claims shift to the internet, many libraries are closing or charging £1 a hour for internet access.

    The previous “inflation rated” rises in benefitd did not really apply to the inflation the poor face in any case..

    And now the Tories want to cut even that minimal survival amount; AND attack DLA so that 20% loose it altogether.

    These people have pure evil in their hearts.

  • http://twitter.com/pfisucks tollick, john

    Most of the comments thus far are bogged down in the benefit culture. (deserving poor, squeezed middle etc) Instead of taxing economic activity to provide benefits for people who want to earn enough to live on but can’t, do the following:-

    1] legislate for a Living Wage

    2] Legislate for fair rents

    3] Provide opportunities for people with disabilities to contribute to their communities in return for a state funded wage that covers all their living expenses

    4] Provide child benefit for 2 children only to include initial maternity benefit

    5] Stop all other benefits apart from the state pension.

    6] Introduce Local Authority Direct Labour Schemes to make good use of people who cannot find work otherwise, and pay them the living wage.

    7] Cancel Trident

    I leave the arguments about how to balance the books to others.

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