The cuts to tax credits will be the story of this Parliament. Just as the 1997 Election was over before the end of 1992, so the 2020 Election will be over before the end of 2015.
Gaby Hinsliff writes:
Gaby Hinsliff writes:
Well, this is awkward: not quite how the new politics was
meant to pan out.
Thousands of people marching good-naturedly through
Manchester protesting against austerity have been upstaged by a handful of the
usual suspects spitting on journalists and screaming “Tory scumbag” at random
(and thus often not Tory) party conference-goers.
Meanwhile the new and most
influential player in the battle to stop George Osborne reducing the tax
credits on which low-income families rely turns out to be … The Sun.
In an editorial this morning it warned that a “living wage”, which isn’t really anything of the sort, won’t compensate for cuts in benefit paid to working people and rightly suggested this undermines Osborne’s attempt to portray himself as a blue collar hero.
Tory wonks and commentators, led by the writer Tim Montgomerie, have been publicly making the same point, and so privately have Tory MPs in marginal seats whose constituents are waking up to the nature of what they actually voted for in May.
The new politics was always supposed to mean that millions of people outside the charmed circle – graphically represented in Manchester by the secure “ring of steel” surrounding the conference – would make themselves heard within it.
It just wasn’t meant to be the Murdoch press providing the loudspeaker. Like I said, awkward.
It’s awkward for those who loftily said there were no votes to be had in middle England swing seats from defending the welfare state; that Labour shouldn’t fall into the “Tory trap” of opposing all benefit cuts.
Actually there are plenty of families in Nuneaton and Swindon and Loughborough who cannot afford to lose £1,000 a year and feel conned because they didn’t think the David Cameron they saw during the election campaign – the one supposedly in favour of helping hardworking families get on – would do this.
It’s a preview of the way austerity will start hurting people who didn’t think it was about them (possibly because they read The Sun, which inexplicably failed to make it clear before the election) and to whom the words “Tory trap” may soon have a different meaning.
Clever speeches – and Osborne’s today was clever – don’t change that.
But it’s awkward, too, for those who thought the battle against austerity would involve a grassroots leftwing popular uprising against a Thatcherite establishment and who didn’t appreciate how much being in opposition (and behind in the polls) means being irrelevant.
This time they find themselves sidelined from a battle others can fight, since people who work long hours but just aren’t paid enough are a pretty sympathetic cause.
But when more vulnerable and marginalised people are hit and The Sun doesn’t come swooping in – well, that’s when the new politics will really be tested; and when the grim reality of being out of office may start to sink in.
In an editorial this morning it warned that a “living wage”, which isn’t really anything of the sort, won’t compensate for cuts in benefit paid to working people and rightly suggested this undermines Osborne’s attempt to portray himself as a blue collar hero.
Tory wonks and commentators, led by the writer Tim Montgomerie, have been publicly making the same point, and so privately have Tory MPs in marginal seats whose constituents are waking up to the nature of what they actually voted for in May.
The new politics was always supposed to mean that millions of people outside the charmed circle – graphically represented in Manchester by the secure “ring of steel” surrounding the conference – would make themselves heard within it.
It just wasn’t meant to be the Murdoch press providing the loudspeaker. Like I said, awkward.
It’s awkward for those who loftily said there were no votes to be had in middle England swing seats from defending the welfare state; that Labour shouldn’t fall into the “Tory trap” of opposing all benefit cuts.
Actually there are plenty of families in Nuneaton and Swindon and Loughborough who cannot afford to lose £1,000 a year and feel conned because they didn’t think the David Cameron they saw during the election campaign – the one supposedly in favour of helping hardworking families get on – would do this.
It’s a preview of the way austerity will start hurting people who didn’t think it was about them (possibly because they read The Sun, which inexplicably failed to make it clear before the election) and to whom the words “Tory trap” may soon have a different meaning.
Clever speeches – and Osborne’s today was clever – don’t change that.
But it’s awkward, too, for those who thought the battle against austerity would involve a grassroots leftwing popular uprising against a Thatcherite establishment and who didn’t appreciate how much being in opposition (and behind in the polls) means being irrelevant.
This time they find themselves sidelined from a battle others can fight, since people who work long hours but just aren’t paid enough are a pretty sympathetic cause.
But when more vulnerable and marginalised people are hit and The Sun doesn’t come swooping in – well, that’s when the new politics will really be tested; and when the grim reality of being out of office may start to sink in.
And Ruby Stockham
Speaking to Mishal Husain on Radio 4’s Today programme,
chancellor George Osborne insisted this morning that working families
would be better off as a result of his planned changes to tax credits:
“The typical family with someone working full-time on the minimum wage will be better off, not just a little bit better off but over £2000 better off.”
But shadow Work and Pensions secretary Owen Smith warned today that the cuts would be ‘an insult to working people’ and would leave families dreading news of slashes to their income before Christmas.
Smith may not be an impartial commentator, but it’s worth remembering that the independent Institute for Fiscal Studies (IFS) said in July that it would be ‘arithmetically impossible’ for the new higher minimum wage to compensate fully for the losses felt by recipients of tax credits.
Paul Johnson, the IFS’s director, pointed out after Osborne’s summer Budget that the gross increase in employment income from the higher minimum wage would be about £4 billion, but welfare spending as a whole is due to fall by £12 billion.
Even excluding the effects of the four-year freeze, tax credit spending is due to be cut by almost £6 billion.
Labour has also highlighted today that in the Tories’ 25 most marginal constituencies 130,000 working families will be hit.
In the Welsh constituency of Gower for example, where Byron Davis has a majority of just 27, 3,600 working families receive tax credits.
In Derby North, where Amanda Solloway has a majority of 41, 5,800 families will be affected.
Countrywide, about 3 million families will be affected by the changes, due to come into effect in April 2016.
Speaking ahead of his conference speech today Osborne appeared full of confidence, but tax credit changes have also caused tension within the party.
Tory MP David Davis told The Sun today:
“The government needs to look at this again. For three million families losing £1,000 doesn’t mean cancelling your holiday, it means an empty pantry. I hope this doesn’t turn out to be our Poll Tax.”
And on Saturday former Tory minister David Willets warned that:
“When the reductions in tax credits start hitting purses and wallets next April there is a real risk that it could turn sour as some of those hard-working families that politicians love realise they are heavy losers. Too many people will see their work incentives fall.”
Playing on the security riff that has become his trademark, the chancellor said today that ‘working people of this country want economic security. The worst possible thing you can do for working families is to bust the public finances and have a welfare system the country cannot afford.’
Osborne has rejected the estimates of the IFS outright and refused to back down on the cuts.
He has cited increases in personal allowances and improvements in childcare along with the new National Living Wage as compensating factors which will, he believes, leave working families £2,000 better off.
The IFS predicts that families will be left £1,090 worse off.
This uncertainty will make for an uncomfortable few months for the families affected.
“The typical family with someone working full-time on the minimum wage will be better off, not just a little bit better off but over £2000 better off.”
But shadow Work and Pensions secretary Owen Smith warned today that the cuts would be ‘an insult to working people’ and would leave families dreading news of slashes to their income before Christmas.
Smith may not be an impartial commentator, but it’s worth remembering that the independent Institute for Fiscal Studies (IFS) said in July that it would be ‘arithmetically impossible’ for the new higher minimum wage to compensate fully for the losses felt by recipients of tax credits.
Paul Johnson, the IFS’s director, pointed out after Osborne’s summer Budget that the gross increase in employment income from the higher minimum wage would be about £4 billion, but welfare spending as a whole is due to fall by £12 billion.
Even excluding the effects of the four-year freeze, tax credit spending is due to be cut by almost £6 billion.
Labour has also highlighted today that in the Tories’ 25 most marginal constituencies 130,000 working families will be hit.
In the Welsh constituency of Gower for example, where Byron Davis has a majority of just 27, 3,600 working families receive tax credits.
In Derby North, where Amanda Solloway has a majority of 41, 5,800 families will be affected.
Countrywide, about 3 million families will be affected by the changes, due to come into effect in April 2016.
Speaking ahead of his conference speech today Osborne appeared full of confidence, but tax credit changes have also caused tension within the party.
Tory MP David Davis told The Sun today:
“The government needs to look at this again. For three million families losing £1,000 doesn’t mean cancelling your holiday, it means an empty pantry. I hope this doesn’t turn out to be our Poll Tax.”
And on Saturday former Tory minister David Willets warned that:
“When the reductions in tax credits start hitting purses and wallets next April there is a real risk that it could turn sour as some of those hard-working families that politicians love realise they are heavy losers. Too many people will see their work incentives fall.”
Playing on the security riff that has become his trademark, the chancellor said today that ‘working people of this country want economic security. The worst possible thing you can do for working families is to bust the public finances and have a welfare system the country cannot afford.’
Osborne has rejected the estimates of the IFS outright and refused to back down on the cuts.
He has cited increases in personal allowances and improvements in childcare along with the new National Living Wage as compensating factors which will, he believes, leave working families £2,000 better off.
The IFS predicts that families will be left £1,090 worse off.
This uncertainty will make for an uncomfortable few months for the families affected.
No comments:
Post a Comment