Why aren't we talking about the "disability tax"?

The Chancellor presented some pretty unconvincing reasoning in the Autumn Statement.

As Jonathan Portes writes, the Chancellor's explanation for using the Autumn statement to cut spending in real-terms (which includes the "mummy tax", as well what we might call the "poverty tax", "disability tax", "unemployment tax" and "civil servant tax") doesn't stand up.

The Chancellor said:

With pay restraint in businesses and government, average earnings have risen by around 10% since 2007. Out of work benefits have gone up by around 20%. That’s not fair to working people who pay the taxes that fund them.

Portes responds:

The numbers are correct: but they are highly selective… The value of out of work benefits relative to average earnings (and more broadly the incomes of those in work) has fallen steadily over the past three decades, until the recent slight uptick resulting from the recession…

Unless we are stuck in permanent depression, even a modest recovery will in time lead to earnings rising significantly faster than prices, and the relative value of out of work benefits will decline again. No policy action is required to ensure this (although economic recovery would help!).

The Chancellor was also incredibly sneaky in conflating out-of-work benefits with the other, in-work benefits, which he is also cutting, including local housing allowances – a key part of housing benefit – and "elements" of the child tax credit and the working tax credits.

The child tax credit cut is the one which has been dubbed the "mummy tax" – but focusing on that change to the exclusion of others does damage to the point. Even in the Mail's mummy tax story, for instance, the case-study they present is of a woman who stands to lose far more from the housing benefit cuts than the child tax credit ones. And the idea, implicit in the selective complaints, that it is worse to hurt "mummies" than it is to hurt, say, the disabled is distasteful.

While Osborne may have been sloppy in conflating in- and out-of-work benefits, he was smarter than many commentators in not implying that the change was because such benefits were in some way "unsustainable" – a charge levied by, among others, the Sunday Times' David Smith.

Given 53 per cent of welfare spending goes on pensioners (table 3), the real unsustainable change was made in the last budget. In the spring, Osborne announced a "triple lock" for pensions, guaranteeing that they would be uprated by the higher of CPI, average wages or 2.5 per cent. And sure enough, the Autumn Statement saw the state pension uprated by more than either CPI or average wages.

The Chancellor isn't chasing sustainability. He's just attacking the poor.

Osborne. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

New Statesman
Show Hide image

Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.