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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How should Labour's disgruntled moderates behave?

The price for loyalty looks like being long-term opposition. Sometimes exiting can be brave.

When Albert O. Hirschman was writing Exit, Voice, Loyalty: Responses to decline in Firms, Organizations, and States he wasn’t thinking of the British Labour Party.  That doesn’t mean, though, that one of the world’s seminal applications of economics to politics can’t help us clarify the options open to the 80 to 90 per cent of Labour MPs who, after another week of utter chaos, are in total despair at what’s happening under Jeremy Corbyn.

According to Hirschman, people in their situation have essentially three choices – all of which stand some chance, although there are no guarantees, of turning things around sooner or later.

The first option is simply to get the hell out: exit, after all, can send a pretty powerful, market-style signal to those at the top that things are going wrong and that something has to change.

The second option is to speak up and shout out: if the leadership’s not listening then complaining loudly might mean they get the message.

The third option is to sit tight and shut up, believing that if the boat isn’t rocked it will somehow eventually make it safely to port.

Most Labour MPs have so far plumped for the third course of action.  They’ve battened down the hatches and are waiting for the storm to pass.  In some ways, that makes sense.  For one thing, Labour’s rules and Corbyn’s famous ‘mandate’ make him difficult to dislodge, and anyone seen to move against him risks deselection by angry activists.

For another, there will be a reckoning – a general election defeat so bad that it will be difficult even for diehards to deny there’s a problem: maybe Labour has to do ‘déjà vu all over again’ and lose like it did in 1983 in order to come to its senses. The problem, however, is that this scenario could still see it stuck in opposition for at least a decade. And that’s presuming that the left hasn’t so effectively consolidated its grip on the party that it can’t get out from under.

That’s presumably why a handful of Labour MPs have gone for option two – voice.  Michael Dugher, John Woodcock, Kevan Jones, Wes Streeting and, of course, John Mann have made it pretty clear they think the whole thing’s a mess and that something – ideally Jeremy Corbyn and those around him – has to give.  They’re joined by others – most recently Stephen Kinnock, who’s talked about the party having to take ‘remedial action’ if its performance in local elections turns out to be as woeful as some are suggesting.  And then of course there are potential leadership challengers making none-too-coded keynote speeches and public appearances (both virtual and real), as well as a whole host of back and frontbenchers prepared to criticise Corbyn and those around him, but only off the record.

So far, however, we’ve seen no-one prepared to take the exit option – or at least to go the whole hog. Admittedly, some, like Emma Reynolds, Chuka Umunna, Dan Jarvis, Yvette Cooper, and Rachel Reeves, have gone halfway by pointedly refusing to serve in Corbyn’s Shadow Cabinet.  But nobody has so far declared their intention to leave politics altogether or to quit the party, either to become an independent or to try to set up something else.

The latter is easily dismissed as a pipe-dream, especially in the light of what happened when Labour moderates tried to do it with the SDP in the eighties.  But maybe it’s time to think again.  After all, in order to refuse even to contemplate it you have to believe that the pendulum will naturally swing back to Labour at a time when, all over Europe, the centre-left looks like being left behind by the march of time and when, in the UK, there seems precious little chance of a now shrunken, predominantly public-sector union movement urging the party back to the centre ground in the same way that its more powerful predecessors did back in the fifties and the late-eighties and nineties. 

Maybe it’s also worth wondering whether those Labour MPs who left for the SDP could and should have done things differently.  Instead of simply jumping ship in relatively small numbers and then staying in parliament, something much bolder and much more dramatic is needed.  What if over one hundred current Labour MPs simultaneously declared they were setting up ‘Real Labour’?  What if they simultaneously resigned from the Commons and then simultaneously fought scores of by-elections under that banner?

To many, even to ask the question is to answer it. The obstacles – political, procedural, and financial – are formidable and forbidding.  The risks are huge and the pay-off massively uncertain.  Indeed, the whole idea can be swiftly written off as a thought-experiment explicitly designed to demonstrate that nothing like it will ever come to pass.

On the other hand, Labour MPs, whether we use Hirschman’s three-way schema or not, are fast running out of options.  The price for loyalty looks like being long-term opposition.  Voice can only do so much when those you’re complaining about seem – in both senses of the word – immovable.  Exit, of course, can easily be made to seem like the coward’s way out. Sometimes, however, it really is the bravest and the best thing to do.

Tim Bale is professor of politics at QMUL. His latest book, Five Year Mission, chronicles Ed Miliband's leadership of the Labour party.