Will Clegg cave in on freezing benefits?

Lib Dem leader may agree to Osborne's benefits freeze in exchange for a wealth tax.

Last year it was the Liberal Democrats, along with Iain Duncan Smith, who vetoed George Osborne's plan to freeze benefits on the grounds that the poorest should not be squeezed even more. Now, with his deficit reduction programme increasingly off track, the Chancellor has come back for a second try. As I wrote yesterday, Osborne is reportedly considering freezing most benefits for two years and then linking them to wages, rather than prices (the former are expected to rise more slowly than the latter, a sure sign of a depressed economy). The plan would hit the poorest hardest and further depress growth (the poor spend, rather than save, what little they receive) but Osborne, a man with a deficit target to meet, will likely wave away such quibbles.

And it looks as if he may get his way. Today's Sun reports a source close to Clegg as saying, "This is a time of incredible economic challenges and we have to look at all the options available." It's the sort of story perfectly timed to unsettle the Lib Dem faithful as they gather  for their annual conference in Brighton this weekend. The party, most of whose activists remain solidly social democratic, has already accepted £18bn of welfare cuts (Osborne is attempting to secure a further £10bn), will it really acquiesce to yet another raid on the poorest? Provided certain conditions are met, the answer is yes. Clegg has openly said that he is willing to agree to further welfare cuts in exchange for some form of wealth tax.

He told the Guardian last month: "The blunt truth is that we will need to find further savings in welfare. It constitutes close to a third of total government expenditure ... Welfare reform does have a continuing role. But that has to be done in a way which starts at the top rather than starts at the bottom."

But if Clegg does want to strike a grand bargain with Osborne he had better make sure it is one worthy of the name. Before the 50p tax rate was abolished, we were told that the Lib Dems would only accept such a move in return for the introduction of a "mansion tax". Yet the rate was scrapped and all Clegg's party received in return was a higher rate of stamp duty on £2m properties and some token action on tax avoidance. In the eyes of the voters, the Lib Dems were complicit in a giveaway to the richest. If Clegg is to avoid relinquishing any more credibility, he must not repeat this error.

George Osborne is considering a two-year freeze on most benefits. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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