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.

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John McDonnell's Mao zinger spectacularly backfires

The shadow chancellor quoted from Mao's Little Red Book in his response to George Osborne's autumn statement.

John McDonnell's response to George Osborne's autumn spending review has quoted from a surprising source: Mao's Little Red Book.

The Little Red Book is the name commonly given to Quotations from Chairman Mao Tse-tung, a book that collected together the - you guessed it - quotations of the former Chairman of the Communist Party of China. It was widely distributed after the cultural revolution during the personality cult of Mao, alongside Lenin's The Three Sources and Three Components of Marxism and Engel's Socialism: Utopian and Scientific. 

In response, George Osborne opened the copy of the book and said "it's his [McDonnell's] personal signed copy".

Aside from chapters on labour, women and the army, the book also collects quotations on topics like "Imperialism and All Reactionaries Are Paper Tigers". Mao's legacy as a political theorist is somewhat contested given the approximately 18 to 45 million people who died during China's "Great Leap Forward", a process of rapid industrialisation instigated by the Communist Party in the late 1950s. The death toll from Mao's cultural cleansing program is hotly debated, but sources generally agree over half a million people died as a direct result.

There has been some suggestion that in terms of "not offering obvious spin opportunities to your opponents", the decision to quote Mao may not have been McDonnell's finest.

I'm a mole, innit.