The onslaught against working families continues

The government's response to youth unemployment will squeeze the "squeezed middle" even further.

If today's report proves correct then tomorrow Nick Clegg will announce a further blow for low-to-middle income families in order to pay for a new programme for the young unemployed.

Let's start with the better, latter, half of that sentence. The new programme will, according to insiders, walk and talk like Labour's "Future Jobs Fund", which offered incentives to employers to take on 18-24 year olds who had been out of work for more than 6 months. In case it has passed you by, this is the very programme that David Cameron likes to mock as being profligate and ineffective. Hence the new coalition version of it will under no circumstances be called by the same name (no doubt some Whitehall wag would have proposed the moniker "the fund for future jobs" -- but I'm guessing coalition ministers will have screened that out).

We'll find out tomorrow what the scheme looks like but if, as seems likely, the coalition has decided to swallow its ideological opposition to wage subsidies going to firms in order to encourage them to take on the young unemployed, then that is to be welcomed -- though it is scandalous that it's taken youth unemployment to reach 1 million to bring this about.

Now let's turn to how the nastier element of tomorrow's promised announcement: how it is to be paid for. Assuming the FT hasn't got it wrong, then the money will be found by the decision not to uprate tax-credits in line with inflation. Which is odd, iniquitous, and revealing all at the same time.

 

It's a bit odd because the Treasury has already banked the savings from freezing the working tax credit for the next three years. Which leaves the other big area of spending: child tax-credit. But here the coalition has sought to burnish their progressive credentials by announcing that they will over index the child element for the next few years (in an attempt to demonstrate some commitment to the child poverty target). Doubtless HM Treasury will have some wheeze up its sleeve for changing the indexing system for this child tax-credits - perhaps by uprating in line with earnings for this year, not inflation. But if this is the case they will face the charge they have broken with the spirit of the key spending commitment they have made on helping families with low-income children.

It's iniquitous because this will hit precisely those families who have already been on the end of the most severe squeeze of their lives. This April they already saw a major hit to support for childcare paid out via the tax credit system. This, along with other changes to tax-credits, mean that a single parent on £28k with two kids is losing £1,300 this year; or a couple with two kids on a joint income in the high £30ks is losing £2800 this year. And these cuts are a mere warm up for more than £1bn of further reductions to tax-credits that have already been announced and will commence in April 2012 - all of them targeted at the same families.

And let's not forget yesterday's news that median wages have plummeted 3.5% in real terms this year, far more for the low paid. So families whose wages are falling at a rapid rate, who have already been severely hit by April's budget cuts, and will be made poorer still in April 2012, are about to be told that they are first in line to take a cut to pay for a new programme.

Which is why this decision is also revealing. It demonstrates very clearly the knee-jerk response of ministers when pressed to find resources for a new funding pressure: take it from families getting tax-credits.

To be clear, I'm all for more action to deal with youth unemployment -- indeed, I suspect that I'd want something more ambitious than what is likely to be announced tomorrow. And that, of course, has got to be paid for. But not by low-to-middle income families.

It's not as if there are no alternatives. Labour will pursue their line that this should be funded through a tax on bankers' bonuses - and for all its well rehearsed feel, this will still strike a chord with many. But if the coalition didn't want to turn to the City there are other principled alternatives. The £7bn-£8bn spent on higher rate pension tax relief? Or stopping affluent pensioners receiving winter fuel allowance?

If this goes ahead, then don't let anyone say there was no alternative. Youth unemployment could be tackled without a further unnecessary squeeze on low-to-middle income Britain.

 

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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Corbyn's supporters loved his principles. But he ditched them in the EU campaign

Jeremy Corbyn never wanted Remain to win, and every gutless performance showed that. Labour voters deserve better. 

“A good and decent man but he is not a leader. That is the problem.” This was just-sacked Hilary Benn’s verdict on Jeremy Corbyn, and he’s two-thirds right. Corbyn is not a leader, and if that wasn’t obvious before the referendum campaign, it should be now. If the Vice documentary didn’t convince you that Corbyn is a man who cannot lead – marked by both insubstantiality and intransigence, both appalling presentation and mortal vanity – then surely his botched efforts for Remain must have.

But so what. Even Corbyn’s greatest supporters don’t rate him as a statesman. They like him because he believes in something. Not just something (after all, Farage believes in something: he believes in a bleached white endless village fete with rifle-toting freemen at the gates) but the right things. Socialist things. Non-Blairite things. The things they believe in. And the one thing that the EU referendum campaign should absolutely put the lie to is any image of Corbyn as a politician of principle – or one who shares his party’s values.

He never supported Remain. He never wanted Remain to win, and every gutless performance showed that. Watching his big centrepiece speech, anyone not explicitly informed that Labour was pro-Remain would have come away with the impression that the EU was a corrupt conglomerate that we’re better off out of. He dedicated more time to attacking the institution he was supposed to be defending, than he did to taking apart his ostensive opposition. And that’s because Leave weren’t his opposition, not really. He has long wanted out of the EU, and he got out.

It is neither good nor decent to lead a bad campaign for a cause you don’t believe in. I don’t think a more committed Corbyn could have swung it for Remain – Labour voters were firmly for Remain, despite his feeble efforts – but giving a serious, passionate account of what what the EU has done for us would at least have established some opposition to the Ukip/Tory carve-up of the nation. Now, there is nothing. No sound, no fury and no party to speak for the half the nation that didn’t want out, or the stragglers who are belatedly realising what out is going to mean.

At a vigil for Jo Cox last Saturday, a Corbyn supporter told me that she hoped the Labour party would now unify behind its leader. It was a noble sentiment, but an entirely misplaced one when the person we are supposed to get behind was busily undermining the cause his members were working for. Corbyn supporters should know this: he has failed you, and will continue to fail you as long as he is party leader.

The longer he stays in office, the further Labour drifts from ever being able to exercise power. The further Labour drifts from power, the more utterly hopeless the prospects for all the things you hoped he would accomplish. He will never end austerity. He will never speak to the nation’s disenfranchised. He will achieve nothing beyond grinding Labour ever further into smallness and irrelevance.

Corbyn does not care about winning, because he does not understand the consequences of losing. That was true of the referendum, and it’s true of his attitude to politics in general. Corbyn isn’t an alternative to right-wing hegemony, he’s a relic – happy to sit in a glass case like a saint’s dead and holy hand, transported from one rapturous crowd of true believers to another, but somehow never able to pull off the miracles he’s credited with.

If you believe the Labour party needs to be more than a rest home for embittered idealists – if you believe the working class must have a political party – if you believe that the job of opposing the government cannot be left to Ukip – if you believe that Britain is better than racism and insularity, and will vote against those vicious principles when given a reason to; if you believe any of those things, then Corbyn must go. Not just because he’s ineffectual, but because he’s untrustworthy too.

Some politicians can get away with being liars. There is a kind of anti-politics that is its own exemplum, whose representatives tell voters that all politicians are on the make, and then prove it by being on the make themselves and posing as the only honest apples in the whole bad barrel. That’s good enough for the right-wing populists who will take us out of Europe but it is not, it never has been, what the Labour Party is. Labour needs better than Corbyn, and the country that needs Labour must not be failed again.

Sarah Ditum is a journalist who writes regularly for the Guardian, New Statesman and others. Her website is here.