During the Conservative Party Conference, George Osborne announced a simple change to child benefit. He took a difficult and historic decision to remove payments to households with at least one higher rate taxpayer, saving an estimated £1 billion of public money from going directly to the highest paid 12% in our society.
In what turned out to be my last blog post, I railed – somewhat hysterically – against the reaction to this modest cut. It was clear that the right wing press would oppose such a move. But what was less clear, and more galling, was the way the Labour party and its media allies jumped on the bandwagon, claiming that the Coalition intended to destroy the welfare state through a gradual but pervasive attack on universalism.
Anyone who watched Alan Johnson’s speech yesterday will have quickly realised that Labour do not currently have an economic policy to speak of. Instead of engaging with George Osborne, he chose to preach to the choir, no doubt pleasing his backbenchers and activists with a comprehensive list of tribal accusations and vague, warm-sounding complaints.
But one charge that always sticks is that the Coalition – and specifically the Tories – do not understand or deliver ‘fairness’.
Actually, I think that the people at the top of the government – from both parties – DO understand it. Since May I’ve seen enough from David Cameron and George Osborne to make me believe that they are genuinely trying to produce policies, in partnership with Nick Clegg and Danny Alexander, that share the burden fairly across society.
But the reaction to the child benefit cut pushed them into a political corner. The Daily Mail and Daily Telegraph will always look after their own. But had Labour and the Guardianistas greeted that announcement with calm acceptance (while raising the specific problems that have been described in detail elsewhere), it could have encouraged the Coalition to consider further cuts to so-called ‘middle-class benefits’.
Instead, the furious storm that erupted almost certainly convinced Osborne et al that another cut ‘attacking universalism’ would be political suicide. Because however fair it might be to take away effective tax breaks from those that can afford to lose them, the fallout for the Conservatives in particular would be catastrophic.
So, instead, we have these slashing cuts in welfare payments. Hitting the poorest hardest – because Osborne knows they’re the voiceless, unable to speak up for themselves. The right thing to do would have been to remove further tax breaks from the rich – but the reality of politics and the cynical opposition of Labour to every single cut makes that hard to do. Osborne’s weakness does him no credit. But it is totally understandable.
This situation should leave no one in any doubt as to the way New Labour shaped our society into one that wants to have its cake and eat it too; one of ‘aspiration’ and endless spending on public services. Yesterday, the Coalition failed to reshape it.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Lib Dems urge government to fund scheme that traces Ukrainian children abducted by Russia
Latest voting intention and leadership ratings opinion polls
Free digital skills training
Reform civil war
I appear to be banned from Belfast Pride
Ruth Clark
Mike Peters
Roland
44 Comments
Poor George Osborne forced to hammer the poor and disabled because of that nasty Labour party.
When the Media (mostly the Mail and the other right wing rags) went ballistic over the Child Benefit change, it wasn’t Labour that dictated what happened next but Cameron and Osborne. Labour were, and are, still fumbling about looking for a policy.
When the press turned sour Cameron, who by all accounts fears the right wing press, wobbled. Badly. He started feverishly sending out press releases about possible future changes to the married couples tax allowance to compensate the better off while pleading with Osborne to rethink the change.
Osborne told him to hold fast because this was the cover they needed to introduce the vicious attack on everyone else fon welfare. And the rest, as they say, is history.
Lets also remember that this supposed hardship for the middle classes isn’t even being introduced until 2013. That’s three years of grace while the rest of the welfare system the poor and vulnerable rely on gets gleefully smashed by Osborne
Osborne always wanted to slash cuts in welfare payments.
Hitting the poorest hardest – because that’s who Osborne is.
A millionaire idealogue with no concept or empathy of what life on the margins is like for the poor and vulnerable in society.
Good thing the Lib Dems were consistent in their calls for lower government spending all through their time in opposition. Because if they weren’t this sudden about face on defecit reduction and government spending would look like staggering hypocrisy.
I think there’s a fair point here. Labour’s complaints haven’t really been about the action towards the disabled, or cuts to housing, but rather about other groups such as children, and of the economic effect of cuts – in fact, I’m sure I heard John Denham on the radio saying that the best bit of the CSR was the changes to welfare! Labour’s actions towards those on benefits over the past 13 years aren’t exactly spotless after all – in many ways, there’s cross party consensus on the ‘need’ to ‘clamp down’ on ‘spongers’. Of course, nobody forced Osborne to make these cuts (which are easily the worst bit of the spending review), but no one in the Labour Party is complaining too loudly – certainly not as loudly they were about taking away child benefit from a family on £40,000 a year!
Nick Clegg 2008 budget response:
He told MPs: “This was an opportunity to give whatever help possible to the millions of hard-pressed families who are feeling the pinch, whose money is simply not stretching as far as it once did.
“But that’s not the Budget that the chancellor has delivered.
“This is a meagre, tinkering Budget which gives precious little help to the poor but maintains special treatment to the rich – a Budget designed to fill a black hole masquerading as good for the environment.
“A Budget which will not make Britain fairer. A Budget that is a green cop out.”
Oh Nick what have you become?
There is no point in expecting Labour to come up with an alternative fully costed alternative, they are not going to be in power for at least 5 years. I suppose they could sign pledges about this or that policy, but as you lot have just proved, it doesn’t mean diddly-squat.
If I remember rightly the crackdown on benefits and welfare were the one thing Ed Miliband welcomed and said he could “work with Cameron on” at his first ever PMQs. Shameless political positioning by him to counteract the ‘Red Ed’ tag, as was his subsequent stance on £44,000 child benefit change.
So Labour do indeed have some explaining to do before they attempt to be overly pious on this issue, but the actual decision was still made by Osborne because it’s what he always wanted to do.
There is no point in expecting Labour to come up with an alternative fully costed alternative, they are not going to be in power for at least 5 years.
Problem is that this could be seen as a defining moment in political history for a generation – if the whole thing works out people’s impression of Labour will be `they weren’t relevant at the time – don’t they just cause economic crises`
Although he did say summat about someone who between the ballot box closing and the ministerial car door opening, found Greece. Guess who he was refering to.
And, lemme get this straight, you think the Spending Review – on the matter of welfare, at least – was unfair and inquititous. So, what do you do? Have a go at Labour for not having ideas.
What’s the txtspk for face palm?
That said, removing child benefit from households which earn two or even three times that of others *is* one of the more progressive elements.
It would be great if commenters could read to the end of the article before jumping to conclusions about what I’m actually saying here.
I’m not actually calling for Labour to provide a fully-costed alternative policy. The central point is that Labour (and ‘the left’ in general) gave Osborne political cover by vehemently opposing a cut that predominantly hits high earners.
I don’t agree with LDV Bob that Osborne wants to hit the poorest hardest. It may be true that he has little empathy with those people, though; his rhetoric at times has shown that rather clearly; but I am inclined to think the Coalition’s constant, almost strident attempts to prove that they are adhering to the nebulous concept of ‘fairness’ are generally sincere. Maybe I’m too credulous.
Kehaar – I’m not defending Osborne. I say in the article that the decision to cut more from welfare represents weakness and failure. But Labour are playing into his hands – whether or not you think he’s actively setting out to hurt the most vulnerable.
I’m not actually calling for Labour to provide a fully-costed alternative policy.
They’re idiots if they don’t – this is a defining moment and people want to know what the opposition is offering.
I too am worried about some of the proposals ie the change from 25 to 35 business and a few other things – yet am totally relaxed about families not getting more than the average wage (barring genuine disabilities).
The worst thing was the housing bubble – it has stopped any Social Democratic project in its tracks thus Labour can only do `noises off`. The other huge elephant in the room is the power of London/SE which in fairness terms is unsustainable so I am glad about the GIB and Science funding. The problem is the 14% (not 27%) reduction in Local Government that seems to be throwing up `super-councils`. My desire is to see a full federal system with even further reduced Central Government role. That requires a strong economy and low unemployment.
None of this is easy. There’s a high class poker-game going on at the moment – `it’ll be alright on the night` – if those that swung to the Coalition are happy in five years time Labour will lose the GE. If not then Labour will say `I told you so – I knew that person couldn’t remember their lines`. Both are big political risks.
Tom, I did indeed read to the end of the article. Surely you’re not surprised that Johnson took an opportunity for a little political point scoring? *That* is what happens on the floor of the Commons! And he did it so much better than Miliminor.
To a significant extent, I agree with that. One manifestation has been that child benefit was assumed to be a little perk for the middle-classes who earn far more than all but one member of my wider family ever has.
Talk about brass neck!
– Sorry Britain we have to make cuts because of the Labour Party
– Sorry Britain, we have to make cuts that affect the most vulnerable because of the Labour Party
The reason the cuts are hitting the poorest is because of Tory ideology. Stop being so ridiculous.
The child benefit cut though shows the intellectual paucity at the top of the Government
Cameron said again yesterday that it was not fair for a taxpayer earning 15, 20, 25000 to pay for his children. This is guff
What about a poor family with no kids who are paying for the education of other people children? The state system (including all universal benefits such as health, education, welfare) should be available to all. Even the rich man may fall on hard times and need welfare support in the future. This idea that the state is only there for the poor is a terrible idea to promote.
If we take child benefit as introduced – the fundamental question is what value do we place on child rearing? In most countries there are tax breaks (and often child payments) for those with children.There are no such tax breaks in the UK.
The comparison should be between three households:
i. Two incomes of 40000 with no kids (can have two working parents cos they have no kids) – no benefit
ii. Two incomes of 40000 with 3 kids and a friendly grandparent – £2500 pa
iii, One income of 45000 with 3 kids but mum/dad has to stay at home to look after them – no benefit
I personally think we should value children and any family should receive some contribution from the state when compared to a family on similar income without them. If you disagree with that premise and that there should be no contribution then that is fine – perhaps we should then challenge chlld benefit completely. My wife and I unfortunately are not able to have children and probably for that value them highly
If this is the case then we either have universal child benefit or the tax system takes parents into account. I personally think we should have a mix of the two
not if you cut from the rich
So the Coalition didn’t really want to target the poorest and most vulnerable in society for the brunt of the cuts on Wednesday. However because the Labour Party and Daily Mail were a bit rude about us for 3 days one week they had no choice. The culpability for the actions of a government with a comfortable commons majority and 4.5 years left to run on its term doesn’t lie with it’s self but with a recently crushed Opposition party and a mid market tabloid.
OK.
Yes, that’s awkward. I don’t so much as think it should be restored to group iii. as I think it should have been withdrawn from group i. Group ii. is lucky, like.
But, the likelihood of there being only one earner in the houshold and who earns even a few thousand more than £45,000 is slim. Households with one earner there is far more likely to have another one not far below, and those with only one high-earner is likely to be a very-high-earner.
But, I think we all can admit that this is an undeserving case.
http://www.guardian.co.uk/commentisfree/2010/oct/04/osborne-child-benfit-war-families
The most vehement opponents of the benefit change were the right wing press.
They were the ones who forced Cameron to wobble and throw out all the rubbish about the married couples tax allowance. Which was then rightly criticised by Simon Hughes as it was as out of the blue and news to Liberal Democrat MPs as the benefit change was to almost all of them.
“Fairness” is simply the agreed spin for the cuts.
It was the agreed public relations stance worked out in the days before the PSR at Chequers by Cameron, Clegg, Osborne and Alexander. The idea is to attach the word fairness to the cuts at every opportunity to soften the blow and hope that it sticks. It didn’t and unravelled almost immmediately as the full appalling scale of the slashing of welfare to the poorest and vulnerable became apparent.
It’s also why Nick is ranting and railing in such a desperate manner against the IFS. They are totally undermining the fairness spin he had intended to shove down anyone’s throat who questioned the balance of the cuts between rich and poor.
We also had the ridiculous spectacle last night of Ian Duncan Smith telling the unemployed to get on a bus and find work echoing Tebbit’s Thatcherite rant from the 80’s.
So I simply don’t believe the spin, and the reaction I’ve seen to these cuts tells me large sections of the public and many other Liberal Democrats aren’t buying it either. And I definitely don’t believe that Osborne and most of his Party care much about ‘fairness’ other than as a useful public relations buzzword.
Kehaar
Actually I disagree with your fundamental assumption which I set out above
The state is not there just to be a prop of the poor there are certain things that should be valued and I believe children are one of them, irrespective of income. I believe that any family with children should be preferentially treated over those without who have the same income. If a family does not truly believe they need it then they can donate it to charity or just not claim it
This is a principle used in most of Europe and is often treated through the tax system
There are other ways to raise money that would effect the wealthy such as inheritance tax and other unearned income taxes than removing something universal.
Nice to see you back blogging Tom!
The reason some of the cuts are hitting the poor is that we’re talking large amounts to recoup and there are so many more of them! If only 12% of people pay higher rate then you’d need 8x the change levied on them to raise the same as a change on the majority!
For so long as we limit the scope of savings to income and not wealth we’ll have this conundrum; it’s the concentration of wealth, not income, that had the greatest potential for redistribution to create social mobility.
Bascz, as loathe as I am to reference Ozzie, but the principles of child benefit has moved on from the early 1950s. My opinion of that comedy gold from Joseph Harker – who, lettuce knot forget, is the deputy Comments Editor of the Graun – can be summed-up with this response:
Setting aside the question of whether NI or Income Tax could have been raised, the simple idea of withdrawing such benefits from high-earners so it can be retained for low-earners *is*, for want of a better word, progressive. This IFS report suggests that such parents had previously spent the benefit on products and services for themselves – e.g. wine, adult clothes – and, on removal, would economize so to provide for their progeny.
As parents should do.
I think we should agree to disagree on this particular point
I blame Labour for stirring up fear on every cut and issue despite knowing they themselves had committed to massive cuts. If Labour hadn’t made such a massive point about it before the election Cameron wouldn’t have been forced to commit to maintaining all old-age universal welfare perks. Without that we could have had the same restrictions to the range of universal old-age benefits we’ve had to child benefit, thus saving money that could have been spent helping the poor.
I blame the Labour party for poisoning debate in this country when they know that spending reductions and tax rises must occur.
Labour’s point was that the Tories were aiming to take benefits away from the most vulnerable in society, they don’t seem to have been far off the mark. Labour admitted, continue to admit and had been enacting cuts, cuts were already happening before the election.
However Labour’s broader stance was that cutting too far too deep now, was an extremely risky game, and it is, the Lib Dems also agreed with this prior to the election.
For all of those who support the cuts can you please explain to me why you there is so little taxation included
Any cut in public services, especially welfare spending hits the poor disproportionately. The IFS report clearly shows all the cuts focus on the lowest deciles of income and the only influence on the upper bands was caused by the 50% tax level that the Tories initially opposed.
I would have hoped that the LD would have pushed for a distribution that was, at the worst, equal for the impact on % household income across all deciles – although personally it should be skewed I think it should be skewed against the top 30%. The only way to get the higher deciles to contribute more is taxation and yet this has played a very minor part in the spending review.
Why are things such as inheritance tax, wealth tax, capital gains on property, second home taxation etc etc not included in the pot.
Not the ideal solution for all but perhaps more, dare I say the word, fair
‘We are all in this together’ or rather ‘we are all in this together as long as me on my 50K salary and waiting to inherit a 400K house in Surrey is not actually expected to contribute’
I, on the other hand, attribute the cuts to those who actually implemented them. Logic, like.
Or bazsc, dare one say it, income tax? It was very easy to get some semblance of fairness into this, and they funked it. It was very easy to find heavyweight economic justification for slowing the process, see Krugman and Stiglitz. For a party which fought Thatcher tooth and nail, this is frankly weak, feeble, and politically deceptive and inept. Sorry.
Hi Tim
Income tax is the other possibility but I think the one area in the UK that is undertaxed is unearned income. Other countries tax lots of things such as house sales, inheritance etc more more rigidly than we do – even countries that would be considered liberal in terms of tax (Switzerland being one).
I remember reading (but stand to be corrected) that death duties one covered a third of all estates. Inheritance tax now covers 6%
The other point is that tax cuts are easily reversed – spending cuts definitely aren’t. Labour for all their faults at least tried to invest in public services capital projects (albeit badly) after years of neglect and being someone who lived through the Tory years it was desperately needed
Tahira
Lets say Labour’s economic policy could be written on the back of a postage stamp.
What astounding policy from the ConDems, ignoring the bankers who are the prime cause of the worldwide economic downturn.
There is no point in expecting Labour to come up with an alternative fully costed alternative, they are not going to be in power for at least 5 years.
Tahira, you can’t criticise a plan unless you can suggest a better plan. If Osbournce is the only person with a reasonably coherent idea of what to do, he wins by default.
So, instead, we have these slashing cuts in welfare payments. Hitting the poorest hardest – because Osborne knows they’re the voiceless, unable to speak up for themselves.
Tom, it does not matter how loudly they shout, if most of the electorate does not care for them. And most of the electorate probably regards most benefit claimants as workshy scroungers who have gotten used to being paid to stay unemployed.
The reason the poorest are being targeted is because even if they get around to voting, they mostly don’t vote tory, so no loss of support there. Also Mrs. Thatcher was the originator of our selfish society; New Labour just didn’t do anything to counter her legacy.
I have to keep saying this we shouldn’t being hitting the poorest in our society at all, they are on the edge already.The benefits we pay are some of the worst internationally, whilst our taxes are amongst the lowest. internationally. Mr Clegg please remember what you said in April this year deep cuts could lead to serious social unrest, I agree.
Stephen W
Do you blame labour when its cold? You and Clegg jumped into bed with the Devil. As a Clegg apologist you have sewn the wind for the party but sadly the party will reap the whirlwind.
The cuts are the responsibility of the coalition no one elses, I repeat no one elses.
Andrew Tennant; Sorry to be mathematically critical. but your statement would only apply if nobody earned more than twice the level of change to higher rate tax, and the income distribution patterns in both ranges were identical. Since the upper earnings levels are often very much more than this limit the take from say a 5% tax hike at both levels will be much more even than you suggest. I don’t know the exact figures, it could even be that the return from higher earners would be largest. In fact, since the median income is well below the average income it is quite possible for a much larger take to result from such an equivalent rise. I can give you some simple examples if you wish.
The Lib Dems need to decide where they stand, Beveridge will be turning in his grave at some of the issues Liberals are agreeing to, but to be fair to Beveridge, this isn’t the Liberal party enacting these cuts,
Arithmetic defeats fairness in cuts –
If you take a million pounds from a thousand millionairs, you raise a billion.
If you take twenty pounds a week – a thousand a year – from ten million claiments, you raise ten billion.
The world is a pyramid.
Interesting comments – thanks, people. I hope my HTML tags are up to scratch here…
I think ad really put his finger on the underlying point of my article when he said this:
<blockquote cite="Tom, it does not matter how loudly they shout, if most of the electorate does not care for them. And most of the electorate probably regards most benefit claimants as workshy scroungers who have gotten used to being paid to stay unemployed."
That’s what I was getting at. I agree with an earlier commenter that it was Mrs Thatcher who began to shape our society into a selfish one, but I don’t think anyone can now dissent that it is remarkable how far the modern Labour party – even under the supposedly ‘centre-left’ Ed Miliband – has embraced the idea of ‘aspiration’, which used to be called greed.
HTML fail – oh well. You get the gist.
So, Tom, what do we DO about it? For many in our party we cannot simply shrug and carry on regardless. Our aim is to make the world fairer, more equal, better even! If we were for a moment to accept that this will never change, never get better, that people couldn’t get better informed, many of us would leave electoral politics altogether.
“what do we DO about it? For many in our party we cannot simply shrug and carry on regardless”
’tis nobler in the mind to suffer
The slings and arrows of outrageous Tory decisions ,
Or to take arms against a sea of right wing policies
And, by opposing, end them
It does not matter what labour policies are as even if they were the best in the world they could not change any of the votes in parliament. The lib dem votes have enabled vast cuts to take place, ‘cleansing’ certain areas, cutting benefits for the sick, dismantling services which councils provide, withdrawing countless provision for the vulnerable and slashing jobs in the public service. This dismantling process is already causing fear about stacking of sick people who have no where else to go in hospitals. In addition to all this the discourse that links to these cuts is nasty. Speaking about people who make ‘life style choices’ to be poor, and ‘scroungers’ and so forth. If you listen you will hear words like these spoken all over the uk now, as the coalition has made such discourse almost ‘fashionable’. Progressive?
Hilarious! So the Coalition’s picking on the poorest is all Labour’s fault for opposing some unrelated measure backed by parties that are certain to retain a Commons majority for the duration of this Parliament? I’ve never seen a government defended and absolved of any responsibility for its own policy on the grounds of its spinelessness in the face of – horror of horrors! – opposition from an Official Opposition that’s powerless to overturn it. Surely a new low in pathetic partisan sniping.