Welfare at the start of 2013

Useful little article this from the New Statesman (a left wing journal) about the current big debates in welfare in 2013

The original is here
http://www.newstatesman.com/politics/uk-politics/2013/01/playing-long-game

but you'll have to scroll down a bit to find the relevant section


The cruellest month
Many will be hit by tax and benefit changes due to come into effect in April. Deferred cuts to child benefit and tax credits will kick in. As the squeeze on local authorities tightens, nonessential services will start to disappear and essential ones will look shabbier.

The Lib Dems hope to win friends with their flagship policy of raising the personal allow - ance for income tax. April is when the additional money should start boosting pay packets for low-income families. That is also when council-tax reforms – and cuts to the support for those who can’t pay – come into force. With the arrival of the new system, bills will be landing on the doormats of families that have never previously faced the levy. Many will already be struggling to keep their heads above water. In town halls across the country, this change is said to be a potential shredder of popularity on a par with the poll tax.

Also in April, the cap on the overall level of benefits that any household can receive will take effect. George Osborne has sold this as a device to thwart those idlers whose lavish lifestyle on the dole is funded by the taxes of their toiling peers. In practice, the main outcome of the cap will be to deny housing benefit to poor families with several children and living in London, where rents are high even for miserable housing. There will be a forced march towards cheaper slums in areas away from the capital, where services will be strained and homelessness will rise.

There is no guarantee that this displacement will change attitudes towards what has been a popular policy. It will certainly cause aggravation for local authorities and for the MPs who find their advice surgeries overflowing with benefit-cap refugees.

There is an entrenched suspicion in much of the country that the social security system has been routinely corrupted to transfer scarce resources from the industrious to the idle. Exploiting that resentment is central to the Conservatives’ political strategy as devised by Osborne, and 2013 will be the year that the Chancellor’s judgement in that respect will be tested. His calculation is that Britain’s appetite for welfare cuts is boundless and that Labour can be trapped into an unelectable defence of hated handouts for layabouts.

Osborne plans to make parliament vote on a bill that will limit the proportion by which benefits can rise to 1 per cent per year for three years – a cut in real terms. He expects Ed Mili - band to oppose the measure and, in so doing, to dig himself into a hole. He envisages the opposition setting up camp on a pious lefty fringe from where the votes that decide marginal constituencies are beyond reach.

Privately, some members of the shadow cabinet fear that he is right. Labour’s opinionpoll lead reflects the aggregation of anti-Tory impulses drawn from the Labour core vote and left-leaning former Lib Dems. If sustained, that bloc could be enough to stop the Tories from winning a majority but it cannot win outright victory for Labour. To take his lead into commanding territory, Miliband has to appeal to precisely the segment of the electorate that Osborne thinks can be sealed off from Labour with benefit cuts. “It’s obvious where our next set of votes has to come from,” says one shadow cabinet minister. “It’s all those people who don’t trust us on welfare – it may not be comfortable, but that doesn’t mean it isn’t true.”

It isn’t just Labour’s record of benefit spending that holds the party back from sealing the deal with swing voters: those on low to middle incomes who feel financially exposed and politically neglected. They are just as wary of the last government’s perceived laxness in controlling immigration, which they see as driving down wages, crowding British workers out of the job market and swamping public services.

One of Miliband’s earliest recognised accomplishments was to identify the “squeezed middle” as a social and economic phenomenon earlier than his rivals. In theory, those families surviving on modest means should be receptive to the Labour leader’s call for a grand reordering of the way wealth and opportunity are distributed. They are likely to be hit hard when the April cuts commence and also to harbour resentment of a Tory high command drawn from the ranks of inherited privilege. Yet Miliband’s soft-left sensibilities are less easily applied to the social attitudes that often accompany economic insecurity. There is no easy extrapolation from individual hardship to collective solidarity. On the contrary, austerity often drives conservative impulses.

Miliband’s gamble for 2013 is that voters will recoil from the social consequences of the cuts, seeing them not as the necessary price of consolidating the Budget but as a familiar symptom of Tory flint-heartedness. For that response to benefit Labour, the party needs a coherent account of how it would manage the same financial challenges in less brutal fashion. But neither Miliband nor Ed Balls wants to spell out speci - fic cuts that they would make in government – or coalition measures they would keep.

When challenged about this reticence, Balls’s allies point out that he has already signed up to a public-sector pay freeze, provoking the fury of the trade unions in the process. Any more detailed chalking-up of services for the chop would, according to the Labour leadership, tie the opposition’s hands prematurely and concede the terms of that battle to the Tories. In a competition to prove who would be less squeamish about wielding the axe, the coalition parties have the obvious advantage.

Senior figures in Labour think that this is a risk worth taking. Voices are often raised around the shadow cabinet table urging clarity about spending priorities as a precondition for getting the attention of voters who still don’t trust the party with their money. Miliband has chosen another path. His conviction is that there is appetite for an entirely new way of talking about the challenge facing the country. It starts with the premise that the coalition destroys while Labour rebuilds.