Social security cuts: hard times | Editorial
The sights and smells of poverty in Charles Dickens were harvested during his walking tours through London streets. That much is familiar. Less appreciated is where he learned about the attitude that the haves harbour towards the have-nots. A recent Hansard Society event celebrated the novelist's early career as a parliamentary reporter. Listening to wealthy men thrash out the New Poor Law – a measure that, in the name of "reform", imprisoned the penniless in workhouses – taught him all he needed to know about how well-fed burghers and beadles thought about their wards.
Perhaps the literature of the future will one day gain from the many losses meted out in the autumn statement this week. The chancellor announced that social security would no longer keep pace with the rising costs of buying baked beans, fixing broken boilers or doing anything else. Instead, it would be slowly ratcheted down in real terms. He said this was necessary to be "fair to the person who leaves home every morning to go out to work" and walks past houses where – in his phrase to Tory conference – workshy paupers are "sleeping off a life on benefits". Dickens would have had fun with a baronet-to-be implicitly likening the condition of unemployment to an eight-pint bender.
This agenda contradicts the inaugural words that David Cameron spoke outside the door of No 10. In May 2010, he promised a government that "always looks after the … poorest in our country". Today, however, Downing Street believes there is unlimited mileage in setting the striving majority against supposed skivers. After all, wages have now slipped behind inflation for years on end. Leftists might protest that the poor are getting poorer, but the Conservative bet is that the working majority will regard it as right and proper for benefits to share in the great wage squeeze. Most of the polling suggests as much, and then there is the additional political attraction of setting a trap for the opposition. The chancellor is delighted with his ruse to effect this retrenchment through an entirely gratuitous piece of legislation. He will defy Ed Miliband to vote against. Should he do so, the Tories will be able to argue that the looming public service cuts – cuts that the IFS already calls "inconceivably" deep – would have to be deeper still under a Labour government, since it would squander more resources on bigger benefit cheques.
For all these reasons Mr Osborne spent Wednesday struggling to suppress a smile at his own cunning, and the dilemma posed is undeniably a real one for Labour. Some whisper that commonsensical caution requires Mr Miliband to acquiesce in a popular move he cannot stop. And yet the pitch that snatched the party leadership for him centred on narrowing Britain's financial gap. Research has shown that the single most important force behind the great economic divergence of the 1980s was the decoupling of benefits from earnings, so Mr Miliband cannot now with any integrity support a further decoupling from prices which will make things very much worse.
In his bid for the top job Mr Miliband also highlighted the coalition's lopsided coalition retrenchment. The imbalance between slashed social spending and taxation has got starker since – cuts are now doing 85% of the work. If economies need to be made, let them address the real divide in this country: that between the rich and the rest. A new Compass pamphlet cheekily reclaims the Osborne lexicon, blasting "scrounging" employers whose low pay is topped up by benefits, and corporate "shirkers" who dodge their tax. Mr Osborne's own discourse retains traction for now, but don't assume this will last. His schism between skivers and strivers is an illusion: working parents claim tax credits too. As the benefit squeeze bites on these, its popularity will surely wane. Mr Miliband should hold his nerve and vote against – for in the end, the truth has power.