Osborne: welfare cheats are "mugging" taxpayers

Measures to tackle benefit fraud are outlined ahead of spending review

David Cameron, his deputy Nick Clegg and Chancellor George Osborne are (according to Andrew Marr) holed up at the Prime Minister's residence Chequers "putting the final touches" to the spending review this weekend. The full review will be announced on Wednesday this week. Details are inevitably emerging into the press in advance, and today measures for tackling benefit fraud have been revealed.

In an interview with the News of the World (paywall) today, Chancellor George Osborne described benefit cheats as being like "muggers" who robbed taxpayers of billions pounds a year. He said:

"This is a fight. We are really going to go after the welfare cheats. Frankly, a welfare cheat is no different from someone who comes up and robs you in the street. It's your money. You're leaving the house at seven in the morning or whatever to go to work and paying your taxes - and then the person down the street is defrauding the welfare system. This money is paid through our taxes which is meant to be going to the most vulnerable in our society, not into the pockets of criminals."

Alongside his pugnacious accusations, the Department of Work and Pensions has said that hi-tech detection techniques and mobile "hit squads" will be introduced in order to seek out and punish offenders. Osborne's aggressive rhetoric (and his decision to place an interview with the NOTW) clearly indicates an appeal to certain constituencies (the Daily Mail and Daily Express have rewarded him with headlines such as: "Three strikes and you are off benefits"). The Chancellor will be keen to get people onside before the cuts are announced on Wednesday - cuts that will deeply affect many natural Tory voters' lives.

Speaking on the Andrew Marr Show this morning, Osborne talked about his "very tough" welfare proposals - including fines for one-off benefit errors, and the threat of losing benefits for three years for repeatedly false claims. He also defended the government's "sensible" economic plans, saying it was the only way to restore "economic credibility". But Osborne struggled to defend the fundamental inconsistency in his child benefit policy which would see double-income families still receiving the benefit, while single-income families (earning less) would not.

Osborne said: "What I've sought to do is provide a simple system that doesn't abolish child benefit... but does remove it from high-rate taxpayers." When challenged on the inherent unfairness, Osborne repeated the fact that he wanted the system to be simple, but offered no alternative to his proposals that will see single earners losing out. For the voters who support him on tackling benefit fraud, this major flaw in his policy will not be so easily dismissed. Osborne will be fighting to defend his child benefit plan for some time to come.

Sophie Elmhirst is features editor of the New Statesman

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After a year of division, a new centre is emerging in Labour

Clive Lewis, Lisa Nandy and Jonathan Reynolds show how factionalism is being transcended. 

On 26 September, Clive Lewis sat onstage at Labour’s conference in Liverpool and puffed out his cheeks in exasperation. He had just been informed that a line in his speech as shadow defence secretary committing the party to Trident renewal had been removed by Jeremy Corbyn’s office. Such was his annoyance that he was said to have later punched a wall in anger ("I punched no walls," he told me when we recently met). 

For Lewis, however, the feud proved to be a blessing. Hitherto hostile MPs hailed his pragmatism and deference to party unity (he is a long-standing opponent of Trident renewal). The former soldier also affirmed Labour’s support for Nato and for collective self-defence. “The values that underpin Nato are social-democratic values: liberty, democracy, freedom of expression,” Lewis, an early Corbyn ally, told me. “Let’s not forget, it was Clement Attlee and the New Deal Democrats who initiated and set up Nato. It’s about being in it to win it. It’s about winning the arguments inside Nato and making sure that it’s a force for good. Some people would say that’s impossible. I say you’ve got to be in it to be able to make those changes.”

In October, Lewis was replaced as shadow defence secretary by Nia Griffith and became shadow business secretary. Many regarded the appointment as a punishment. “Do I think there was an ulterior motive? I’ll never know,” Lewis said. “I’m confident that the reason I was moved – what I was told – is that they wanted me to be able to take on a big portfolio.”

Whatever the truth, Griffith has since said that Labour’s next general election manifesto will include a commitment to Trident renewal and will support multilateral, rather than unilateral, disarmament.

Many MPs had long feared that the divide between them and their leader would prove unbridgeable. Some contemplated standing on bespoke manifestos. Yet with little drama, Corbyn has retreated from a conflict that he could not win. Labour’s conference, at which the largely pro-Trident trade unions hold 50 per cent of the vote on policy and which the leader has vowed to respect, would never have endorsed unilateralism.

“Jeremy Corbyn deserves credit for that,” Lewis said. “Everyone understands that his position hasn’t changed. He still believes in unilateral disarmament . . . But he’s also a democrat, and he’s a pragmatist, despite what people say.”

In policy terms, at least, Labour will contest the next general election as a less divided party than many anticipated. As Corbyn’s team has long emphasised, there is unity around issues such as opposition to spending cuts and support for rail renationalisation. A new centre for Labour, embodied by Lewis, is emerging.

“When I became an MP,” the 45-year-old told me (he was elected in Norwich South in 2015), “to be anti-austerity, to say that cuts don’t work and they’re bad economics, meant you weren’t in touch with reality, and that you had no interest in winning elections. Within the space of 18 months, there’s now a growing consensus that cuts aren’t the way forward and that we need an industrial strategy.”

Theresa May’s support for new grammar schools and “hard Brexit” has given Labour MPs other issues to unite around. After Corbyn’s second landslide leadership victory, many of his opponents have reached the final stage of grief: acceptance. Others, as Lewis noted, are imbued with “an eager enthusiasm to make this work”. Contrary to some predictions, more than half of the 63 frontbenchers who resigned last summer have returned.

An emblematic figure is Jonathan Reynolds. The Liz Kendall supporter, who resigned as shadow transport minister in January 2016, has rejoined the front bench as shadow City minister. Earlier this year, Reynolds backed the introduction of a universal basic income, an idea that is now being explored by John McDonnell’s team (and that Barack Obama has called for “debate” on). In July, Reynolds and Lewis wrote a joint piece in support of proportional representation (PR), warning that without it “a more equal, democratic and sustainable society is less likely”.

Another advocate of PR is Lisa Nandy, the former shadow energy secretary and a friend of Lewis (on 26 October, along with Reynolds, they called for Labour to stand aside in the Richmond by-election to aid the Liberal Democrats). In the view of some, the defining divide in Labour is no longer between left and right but between open and closed. On one side are pluralists such as Lewis, Reynolds and Nandy, while on the other are tribalists such as Ian Lavery (pro-Corbyn) and John Spellar (anti-Corbyn).

The division stretches to the top, with McDonnell in favour and Corbyn opposed. “It’s a work in progress,” Lewis said of his efforts to convert the Labour leader. “There’s a growing movement of MPs who now either support PR or understand the growing necessity for it. They may not be quite there themselves, but they’re moving in that direction.”

At times since Corbyn became leader, the parliamentary party’s divisions have appeared to many to be insurmountable, even as the party in the country has grown and been inspired by Corbyn. Yet a new consensus is being forged in the PLP: anti-austerity, pro-Trident, pro-Nato and, increasingly, committed to political and constitutional reform. If there is any consolation for a becalmed Labour Party, it is that its European counterparts are faring little better. In Spain, France and Germany, an already divided left is further fragmenting.

But Labour is likely to both fight and survive the next general election as a united force. If Lewis can retain his seat in Norwich (he has a potentially vulnerable majority of 7,654), he could one day act as the bridge between the party’s “soft” and “hard” left. After a year of factional skirmishes, the common ground in which Labour’s future will be shaped is emerging.

George Eaton is political editor of the New Statesman.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage