According to the newspapers this morning, there is disharmony in the Tory ranks over George Osborne’s speech on cuts yesterday. ‘Sources close to’ Iain Duncan Smith have accused the Chancellor of ‘hacking at the same people’. Nick Clegg also came close to bursting a blood vessel with his condemnation of the idea of further welfare cuts as ‘lopsided and unbalanced’ and a ‘monumental mistake’.
It reminds me of the old adage: ‘When rogues fall out, truth is revealed, and honest men get justice.’ We can but hope.
Osborne’s speech was extraordinary. It was a long way from the pre-Xmas ‘we’ve turned the corner’ rhetoric. He brought us back to austerity with a bang. Now the job ‘is not even half done’ and 2014 would be the ‘year of hard truths’.
His big message was that the extra £25 billion cuts in the two years after the Election – already agreed by the Coalition – would include at least £12 billion from ‘welfare’. But he offered few examples of where the cuts might come from: in fact he mentioned only two possibilities: cutting housing benefit for the under-25s and charging more rent to higher earners who live in social housing.
On the latter, we have rehearsed before (here and here) the arguments about means-testing social tenants in a great bureaucratic effort to discover the few who earn above £60,000. Oddly, it is not even a welfare cut: people on higher incomes are unlikely to be benefit recipients and, if they decide to move because of their higher rent, they are likely to be replaced by a new tenant who is a benefit recipient (whether in or out of work). So it would have the opposite effect to that he wishes for.
Removing housing benefit from the under 25s would be a punitive and controversial move. Half of the under 25s in receipt of HB have dependent children so it’s not just a matter of believing that a young person should go back home as a consequence. Most graduates begin their working careers in low paid jobs, often in the city they were educated in not their home city. What a dreadful situation they would face: stay in a low paid job without HB or try to get a better paid job, which would trigger having to pay back student loans. It seems particularly cruel.
It is interesting that this announcement about under 25s, together with the strong statement from both Osborne and Cameron that they will retain the ‘triple lock’ for pension payments and all other pensioner benefits – which are hugely expensive commitments – has reignited the debate about inter-generational fairness.
Meanwhile, Bozo himself, the London Mayor, confused everyone by condemning all sides. He said Osborne has got it wrong because he should cut health, schools and international aid instead, but also condemned Clegg as performing ‘a very important ceremonial function as David Cameron’s lapdog-cum phophylactic protection device for all the difficult things Cameron has to do… a kind of lapdog’. Funny but completely meaningless as usual.