Danny Alexander’s revelation should be a wake-up call for everyone [
including the taxi trade ]
Polly Toynbee Thursday 30 April 2015
Is there a secret plan to cut tax credits, child benefit and disability pay for middle- to low-earners? Absolutely not, says David Cameron, hot denials flying through the air today. And indeed there isn’t, there really, really isn’t. George Osborne has deliberately refused to write one, so it doesn’t exist. So £12bn will be cut from the welfare bill, but there is no plan in any drawer.
Danny Alexander has helpfully “lifted the lid” on Iain Duncan Smith’s plan, which was presented to senior ministers back in 2012, showing what £8bn cuts would look like. Even cutting a third less than the £12bn in cuts now planned, a working family with three children would have lost £3,500. To cut £12bn from working-age benefits is to inflict huge amounts of pain on very large numbers of people, says Jonathan Portes of the National Institute of Economic and Social Research, once chief economist at the Department for Work and Pensions (DWP).
"The Tories reckon people don’t much care – but they’d care if they knew these 'welfare' cuts would hit them"For two years Osborne has repeated his promise of £12bn “welfare” cuts with hand-rubbing relish. The Institute for Fiscal Studies (IFS), saying, “It is time we knew more about what they might actually involve,” has laid out options – all of them excruciating and “massively regressive”. But focus groups tell Cameron, Osborne and their campaign director, Lynton Crosby, that cutting welfare is hugely popular, even with Labour voters. Welfare is what other people get. Welfare is what keeps Benefit Street people lounging around all day with cans of lager. Duncan Smith sends favoured newspapers (never the Guardian) eye-popping cases of fraudsters caught working as roofers or running marathons when claiming incapacity benefit. Redirecting the indignation of voters who are enduring large falls in income towards undeserving benefit cheats also handily diverts outrage from tax cuts and inheritance bonuses for the best-off.
There is no secret plan,
because these £12bn cuts will fall almost entirely on millions of voters who are hard at work and hard-pressed or sick, an army of the low-paid who don’t see themselves as being on “welfare”. Labour has just a week to make sure people know what they stand to lose. Yesterday their calculations, in keeping with IFS estimates, spelled it out – 4.3 million families losing £1,000, and any family earning around the median £27,000 or more losing child benefit. Housing benefit cuts are inevitable, forcing more of the low-paid out of their homes. Cameron pretended to rule out cuts for the disabled, but that’s impossible: two-thirds of bedroom tax victims are disabled.
The last-minute cascade of numbers may be hazing voters, but the imminent loss for millions of households of a huge sum in Osborne’s first budget would concentrate minds powerfully. And that’s why there is no Osborne plan.
The New Policy Institute estimates a sharp rise in child poverty, in official figures which are most conveniently unavailable until June. Expect the million children Labour took out of poverty to be sunk back again by another Tory term. Forget Osborne’s long-lost pledge not to balance the books on the back of the poor. The Tories reckon people don’t much care – but hell yes, they’d care if they knew these “welfare” cuts would hit them, far outweighing any gain in tax cuts. Alexander doesn’t have clean hands: the much-vaunted Lib Dem raising of the income tax threshold is wonderfully duplicitous. It sounds as if it helps the lowest-paid, but three-quarters of the gain goes to households in the top half – those more likely to vote Tory and Lib Dem.
Poverty – and child poverty in particular – is rising
To avoid saying where cuts will fall, Cameron and Osborne repeat breezily that as they cut £21bn already, another £12bn will be easy. But it’s not true. Astonishingly, they have only succeeded in cutting £2bn so far: millions suffered deep cuts, yet the total bill barely fell. Why? Because housing benefit soared due to rising rents, and tax credits rose due to ever more people earning too little to keep their families above the starvation line. Cameron made a preposterous claim to Evan Davis that large numbers had been taken off incapacity benefit by “getting people back to work”, but the number on disability benefits is 400,000 above what was expected, due to the total collapse of the assessment system. The work programme is one of the DWP’s pile-up of disasters: Portes’s research shows that only one in 10 disabled people have been found jobs.
Can Cameron and Osborne slither through this last week denying any and every cut implied in that £12bn? Every expert, anyone with a passing knowledge of the benefits system, knows there is no way to take this colossal sum just from a handful of idlers and malingerers. Why? Because, shamefully, the social security system is no longer a safety net for the unlucky – it’s the backbone propping up an entire economy reliant on low pay and high rents. Cut £12bn and half the population will feel it: parents, grandparents, healthcare assistants, supermarket checkout staff, teachers, nurses – everyone who knows anyone in the bottom half. That’s why there is no plan, there really, really isn’t.
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