George Osborne is about to walk into his own welfare trap

13th December, 2012 10:22 am

George Osborne comes from one of those families where current events get discussed. His mother Felicity Alexandra Loxton-Peacock was a Labour voter and worked for Amnesty International. His father, the 17th Baronet, wasn’t and didn’t. You can imagine some lively dinner-table conversation.

Having been rejected by the Times graduate trainee scheme, Osborne joined Conservative Central Office in 1994, just as his party was doing its impression of Felix Baumgartner. Osborne was a spy in the camp at the launch of New Labour at the Labour Party conference, when we went pistachio and tore up the Edwardian prose of Clause IV. I didn’t notice the 23-year-old George Osborne there in Blackpool, but I can remember how utterly thrilling it was to finally believe we could win a majority again. I won a cuddly tiger in an amusement arcade, and christened him ‘Tony’. The revivalist atmosphere, backed by serious political modernisation, also made an impression on young George.

It’s not much of a leap of imagination to see how Osborne’s witness to Labour’s success in the 1990s (contrasted with his own party’s abject and legion failures) led him to promote David Cameron’s campaign for the leadership in 2005, when both men had only been in parliament for four years. They both understood the degree to which the Tories had to look and sound (but not necessarily be) different.

But grabbing the zeitgeist by the throat gets you elected for the first time, not the second. For Cameron and Osborne to pull off that trick requires them to look, not to Blair, but to Thatcher. Thatcher was all about dividing lines with real and imagined enemies within. It was about the identification of minority targets, to unify the broader majority: ‘militants’, lesbians and gay men, peace campaigners, benefit scroungers, single parents, urban youth, the North.

That’s what this week’s Uprating Bill is all about. As I wrote last week at Progress, Osborne is political to the tips of his fingers. It’s easy to spot which of his actions as chancellor are driven by narrow political advantage: it’s all of them. By ‘capping’ benefit payments at 1%, he hopes to paint Labour as the party of benefit claimants, and the Tories as the party of those in work. It’s a despicable attempt at divide and rule, but it speaks to a deep and real sense amongst every community that the social security system is unfair, and rewards those who choose not to work, and hammers those who do. As a political stratagem, it has all of the subtlety of a speech by George Galloway.

But Osborne, as he did with the Budget, has got it badly wrong. The people getting hammered by the real-terms cut in benefits are not easily caricatured as good-for-nothing, Jeremy Kyle-watching scroungers. Instead, six out of ten the people seeing their incomes reduced are the people holding down one, two or even three jobs, working night-shifts and weekends, struggling to do the right thing, day after day. As Liam Byrne, Ed Balls and others have argued, they are the strivers, not the shirkers. Those, such as my friend Jacqui Smith, who are hoping for a more sophisticated response to Osborne’s trap than a Tom Daley-esque dive, will not be disappointed. As reported on LabourList yesterday, Liam Byrne is refusing to fall for the trap. Instead he is using the battering ram of constituency-by-constituency figures which show that the number of people in work whose benefits are being cut is greater than the Tory majorities in scores of seats. He is changing the terms of debate.

Byrne is not merely arguing over the narrow terrain of individual winners and losers; he is also making the bigger arguments about how to get the country back to work. He prays in aid the Obama Jobs Act, which has brought US unemployment down to 7.7%, lower than the UK. Byrne points out that the Office of Budget Responsibility (OBR) is revising the claimant count by 340,000 by 2016. The dole bill is now forecast to be £0.9bn higher in 2015-16, and is cumulatively higher by £1.6bn over the next three years. The Tories’ policies are creating long-term unemployment, and there’s no greater strain on the public finances than people out of work.

The hard-working public want to see evidence that the government is tackling debt, but they don’t want to see their tax credits, maternity allowance, maternity pay, sick pay, tax credits and housing benefit shrink whilst millionaires get a tax cut. I think it is only the English language which contains the phrase ‘too clever by half’ but it applies precisely to the trap that George Osborne has set, and is about to step into himself.

  • http://twitter.com/bencobley Ben Cobley

    I do wish we could have a bit of perspective in our use of language. To speak of people having their benefits increased by 1% getting “hammered” is way out of proportion – try telling that to the unemployed in Spain and Greece. I think we would be much better off being selective about what we get angry about; Labour has become very much like the boy who cried wolf. This government is making radical changes across the board, but Labour is spread too thin and doesn’t have the coherence to score hits on hardly any of it.

    • AlanGiles

      ” To speak of people having their benefits increased by 1% getting “hammered” is way out of proportion”

      Hi Ben, it is worth remembering that a single person on JSA gets just over £70 p.w. and one per cent on that isn’t a great deal – especially with the way the weekly supermarket bills rise, plus heating costs etc.

      Provided Labour’s concern is genuine – it is to be applauded. What concerns me is just how genuine the “concern” really is – when you consider you have dissembling would-be Mayor Byrne in charge of shadowing DWP and the old waxworks like Field mumbling in the background, I think we are entitled to be cynical.

      • aracataca

        True to form once again you’re second guessing PLP decisions here. Productive?

        • AlanGiles

          There is none so blind as those who don’t want to see.

          If labour’s new found concern is genuine, I will be the first to applaud it, but it begs the question if they feel like this now, why were’nt the people who are making all the noise now just as critical at the antics of Purnell Byrne and Cooper when they were so ready to embrace freud?

          The way you, Bill – and some other tribalists are carrying on, you would have thought that no Labour MP had ever uttered words like “workshy”, “feckless” etc etc etc in their lives.

          Perhaps you can fool yourself, but I think a lot of intelligent people who can think for themselves will share my scepticism

      • 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, mince, pasta (70p to £1.12 in a year) and potatoes have all gone up way beyond inflation. Canned store brand vegetables go up by around 10% a year.

        Fuel for heating and electricity goes up by 16%-20% per year.

        Bus fares go up much faster (It can now cost one £3 to go and sign on for £70 pw Jobseekers’ Allowance).

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

        The previous “inflation rated” rises 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.

      • 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, mince, pasta (70p to £1.12 in a year) and potatoes have all gone up way beyond inflation. Canned store brand vegetables go up by around 10% a year.

        Fuel for heating and electricity goes up by 16%-20% per year.

        Bus fares go up much faster (It can now cost one £3 to go and sign on for £70 pw Jobseekers’ Allowance).

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

        The previous “inflation rated” rises 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.

        • AlanGiles

          Good morning Paul. You have given some good examples. I can only speak for London, but on January 2nd public transport fares rise above the rate of inflation. It seems to be forgotten also that in addition to the “essentials” there are hidden essentials – shaving foam, even soap, little things that seem to get forgotten by MPs claiming the maximum food allowance. Also of course, when people have job interviews (a rarer event these days thanks to the state of the economy) they have to look presentable – whats it to be? a tin of shoe polish or food?. On a miniscule budget “hard choices” to use politicians favourite expression have to be made.

          It is sad that the politicians and political scribblers in the newspapers don’t not only not understand things like this, but can’t be bothered/don’t want to know what life is like for so many people. On the odd occassion when for publicity stunts politicians have tried to live for a month on state benefit money, they usually throw in the towel after a week and say they can’t manage. I know they have been pampered by having a five year contract job for £65,000 per annum plus “expenses” which the likes of Maria Miller are still exploiting, but even so, they show they don’t understand real life and don’t want to be in touch with it.

          Meanwhile, having looked on line at the front pages of the newspapers this morning (15th Dec) I see the Express is upset because “better off pensioners” might lose £1000 a year under new proposals for a fixed pension. As you get older, you need less materially anyway, and those of us in the fortunate position of not having to worry literally about where the next meal is coming from, should stop belly-aching about things that don’t matter to us, and worry more about those who are genuinely worse off, especially when they might be in poor health to start with. Selfishness is one of the most unpleasant aspects of human nature, and this story seems to encapsulate the small-mindedness of some, and it is sad that politicians and their media lickspittles encourage such self-centeredness. I will find the link to the story and post it underneath this post

    • mactheanti

      We are not Spain or Greece, never have been, and why should we tell them anything? The whole point is that 60% of those in work are going to get hammered and it’s not only the 1% cap. In April people will have to work more than 16 hours or their benefits will be cut, how can they do this if their employer says no because suddenly he will have to pay more NICs? How can they do this if they simply cannot find another job, even part-time? This apart from the death knell it will sound for local economies and the general economy. If we’re not careful we will end up like Greece and it’ll be Osborne’s fault, he’s fiscally illiterate and a political pygmy!

  • Quiet_Sceptic

    Stepping back a bit – hasn’t Byrne potentially set a trap for himself?

    If the Tories were sharper they’d shout the comparison that Byrne is making from the roof tops and turn it around, arguing that it reflects Labour’s internal electoral calculus – using benefits to buy votes.

    As a line of attack it’s so easy to rebut, “we’re making the tough decisions, may be not the popular decisions but what’s best for the economy and the country….” “Labour is stuck in 2005 winning votes by increasing welfare ….”

  • PaulHalsall

    I want Clause IV back.

  • PaulHalsall

    I want Clause IV back.

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