Burying The Hatchet Man

Polly Toynbee is not right about everything, and she is not quite right even about one or two things here, but she certainly has the measure of the despicable David Laws:

Who would be a politician? As yet another Icarus falls, many would-be politicians will shy away, appalled by the British press acting as the nation's moral Taliban. Few people live without hypocrisy, with no contradictions between principle and practice, nothing embarrassing that risks exposure. David Laws had every right to hide his private life. But scrupulous honesty with public money was essential for this Savonarola about to conduct a bonfire of others' benefits, services and livelihoods.

Desire to conceal the truth about his lover may have caused the duplicity over his £40,000 rent claims, but other expenses also show him falling short. He claimed £150 a month for utilities and £200 a month for service charges until receipts began to be demanded, when his claims abruptly dropped to £37 and £25 respectively – trifling sums for a rich man, but for the lord high axeman political death. How does he take away a baby's child trust fund while being so casual about similar sums himself? How does he tell classroom assistants the loss of their job is a price worth paying?

As for the right to privacy, it doesn't exist for benefit claimants. Iain Duncan Smith and other scourges of welfare protest that single mothers cheat the system by claiming not to be living with or sleeping with anyone else. While the tax system assesses individuals, the benefits system assesses household income, demanding to know, in nosy detail, who is in your bed and how often. Snoopers are common. People live in fear of falling out with malicious neighbours. James Purnell had ads put up in bus stops in poor areas exhorting people to grass up their neighbours. No ads appeared in City wine bars calling for informers against tax frauds costing the state between 40 and 100 times more than benefit cheats.

While outrageous fraud cases do hit the headlines, most of those caught for working while claiming only do odd hours, temporary and uncertain, too risky to declare when there are long delays in reclaiming benefits. But this toughness on the poor with a reason to cheat, and laxness on tax evasion or MPs' expenses, sets politicians up for a stern dose of their own medicine.

This is the faultline between £64,000-a-year Westminster MPs and millions of people's daily lives. Britain's median income is only £24,000 – and MPs (and journalists) forget at their peril that they are in the top 10%. The oddity about British attitudes right now concerns the class fury easily aroused by hypergreed in the boardroom or the Queen demanding £6m more at a time like this. The incomes of over half the population hardly rose in the boom years, yet now those people risk paying a heavy penalty for the behaviour of bankers and City types clamouring for deeper cuts, their press diverting anger from the true cause of this catastrophe towards the "bloated" public sector.

The same Daily Telegraph that berates the public sector and castigates MPs' expenses is owned by a pair of tax exiles refusing to pay their public dues. The same owners are running a vociferous "Hands Off Our Assets" campaign against raising capital gains tax. David Cameron and George Osborne declare they are "listening" to a bullying clamour for loopholes so large that most of the rich will hardly pay more. (Only 130,000 shareholders and 250,000 second-home owners must pay, as gains of less than £10,100 a year attract no tax). Expect an outburst of public anger if the government backtracks to allow huge loopholes: Vince Cable last week on Radio 4 adamantly ruled out as unworkable any kind of "taper" arrangement.

An edgy rancour about unfairness erupts easily these days yet doesn't quite express itself as class politics. Class simmers everywhere with unfocused resentments since Labour deliberately stopped being a conduit for the inchoate indignation of the bottom half or two-thirds. After next April's budget when public employees cascade on to the dole, will this scratchy resentfulness crystallise into a political movement? Or will the sense of social injustice be skilfully channelled by government and press into outbursts against dole cheats, immigrants, overpaid public-sector chiefs, MPs and each new scapegoat of the day?

It is by no means clear if Labour's leadership candidates have an economic strategy to oppose unemployment on the scale we are about to witness. The Institute for Fiscal Studies warns there will be 25% cuts in unprotected departments – a quarter of staff in schools, nurseries, colleges and universities, police, prisons, social care, child protection, street cleaning, parks, road repair. Nor will NHS jobs be preserved. The terrifying scale has not begun to sink in with the public, or politicians still claiming that the deficit is the priority: it won't be soon. The US treasury is warning Europe against the frenzied cutting each country is embarked on, risking a downward spiral when growth should come before cuts.

On resigning, David Laws said: "How much I regret having to leave such vital work, which I feel all my life has prepared me for." How odd that his relished life goal was to cast people out of work. As editor of the Orange Book that staked out new turf for Liberal Democrats as state-shrinking economic neoliberals, he called for a rejection of "soggy socialism" and breaking the NHS into a private insurance system. Laws's faction rejected the heritage of Beveridge and Keynes, the two great Liberal giants.

So perhaps Labour negotiators in the days after the election should not have been so shocked when Laws and Alexander demanded that the Tories' £6bn of cuts should be implemented this year, although they had campaigned against cuts in the election. Laws's biggest cut last week was £700m from Labour's Keynesian stimulus to kickstart manufacturing and growth.

He would have been a Tory, were it not for repugnance at section 28 social Conservatism. I regret the manner of his fall, but not the departure of one who expressed little sympathy for the lives of others being damaged by a too harsh interpretation of economic necessity.