The Government traps itself in a generational war

AME must be cut, but if pensions are protected, then working-age people will be hit.

Research by the Social Market Foundation suggests that the increase in welfare spending over the next five years won't come from working age benefits, but instead will be due to the growing number of elderly people claiming things like the state pension and free TV licences.

This is will end up biting harder than it needs to, given a set of artificial constraints introduced by the government. Firstly, David Cameron pledged in 2010 to protect the universal elderly benefits like free bus passes and TV licenses, at the cost of £4bn. Then, Osborne announced a "triple lock" for old age pensions, promising that they would rise by the highest of inflation, wage growth, or 2.5 per cent.

Those two policies clash with the Chancellor's plan, announced in the budget, to set a cap on Annually Managed Expenditure (AME), a measure of public spending which includes social security benefits like the pension. The Social Market Foundation writes that:

While working-age welfare has been the biggest element of the rise in AME in recent years, it is set to fall in the future as the economy recovers and government cuts take effect. In contrast, pensioner benefits will continue to rise rapidly as the population ages, meaning that further cuts to working age benefits are likely under a cap unless the Chancellor is planning to cut pensioner entitlements.

The Conservatives have managed to engineer a situation in which they are forced to choose between working- and old-age benefits; and rather than trying to balance that obligation, they are cutting working-age benefits while boosting old-age ones, which is what the triple-lock ensures.

The Chancellor has also said that he will attempt to avoid cuts which impair automatic stabilisers – categories of spending which automatically increase in a recession and decrease in a boom, which is true of many of the working-age benefits at risk – but that appears to be a constraint too far.

As the SMF's Ian Mulheirn says, part of the problem comes from the bizarre focus on AME:

The only real virtue in a cap on AME is rhetorical: it lumps together different elements of unrelated spending, which facilitates cuts to some when others rise. This serves to obfuscate rather than clarify public policy choices about the shape of the welfare state at a time when the Chancellor himself is calling for an open debate about welfare.

By talking about pensions, Jobseeker's Allowance, and disability payments in the same category, the government avoids elaborating a coherent vision for the future of the welfare state. Punishing decreases in unemployment benefits hide the fact that there is no real plan to deal with the demographic problem that old age pensions will become; while disability benefits, which exhibit little natural variation, soak up an extra amount of the cost.

The SMF argues that the government should mirror its discussion of the "structural deficit", and cap cyclical changes in spending differently from permanent ones. But whatever the solution, the government is hiding the effects of its welfare policy behind a wall of statistics.

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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Leader: Mourning in Manchester

Yet another attack shows we are going to have to get to used to the idea that our liberalism and our freedoms can only be preserved by a strong state.

Children are murdered and maimed by a suicide bomber as they are leaving a pop concert in Manchester. As a consequence, the government raises the terror threat to “critical”, which implies that another attack is imminent, and the army is sent out on to the streets of our cities in an attempt to reassure and encourage all good citizens to carry on as normal. The general election campaign is suspended. Islamic State gleefully denounces the murdered and wounded as “crusaders” and “polytheists”.

Meanwhile, the usual questions are asked, as they are after each new Islamist terrorist atrocity. Why do they hate us so much? Have they no conscience or pity or sense of fellow feeling? We hear, too, the same platitudes: there is more that unites us than divides us, and so on. And so we wait for the next attack on innocent civilians, the next assault on the free and open society, the next demonstration that Islamism is the world’s most malignant and dangerous ideology.

The truth of the matter is that the Manchester suicide bomber, Salman Ramadan Abedi, was born and educated in Britain. He was 22 when he chose to end his own life. He had grown up among us: indeed, like the London bombers of 7 July 2005, you could call him, however reluctantly, one of us. The son of Libyan refugees, he supported Manchester United, studied business management at Salford University and worshipped at Didsbury Mosque. Yet he hated this country and its people so viscerally that he was prepared to blow himself up in an attempt to murder and wound as many of his fellow citizens as possible.

The Manchester massacre was an act of nihilism by a wicked man. It was also sadly inevitable. “The bomb was,” writes the Mancunian cultural commentator Stuart Maconie on page 26, “as far as we can guess, an attack on the fans of a young American woman and entertainer, on the frivolousness and foolishness and fun of young girlhood, on lipstick and dressing up and dancing, on ‘boyfs’ and ‘bezzies’ and all the other freedoms that so enrage the fanatics and contradict their idiot dogmas. Hatred of women is a smouldering core of their wider, deeper loathing for us. But to single out children feels like a new low of wickedness.”

We understand the geopolitical context for the atrocity. IS is under assault and in retreat in its former strongholds of Mosul and Raqqa. Instead of urging recruits to migrate to the “caliphate”, IS has been urging its sympathisers and operatives in Europe to carry out attacks in their countries of residence. As our contributing writer and terrorism expert, Shiraz Maher, explains on page 22, these attacks are considered to be acts of revenge by the foot soldiers and fellow-travellers of the caliphate. There have been Western interventions in Muslim lands and so, in their view, all civilians in Western countries are legitimate targets for retaliatory violence.

An ever-present threat of terrorism is the new reality of our lives in Europe. If these zealots can murder children at an Ariana Grande concert in Manchester, there is no action that they would not consider unconscionable. And in this country there are many thousands – perhaps even tens of thousands – who are in thrall to Islamist ideology. “Terror makes the new future possible,” the American Don DeLillo wrote in his novel Mao II, long before the al-Qaeda attacks of 11 September 2001. The main work of terrorists “involves mid-air explosions and crumbled buildings. This is the new tragic narrative.”

Immediately after the Paris attacks in November 2015, John Gray reminded us in these pages of how “peaceful coexistence is not the default condition of modern humankind”. We are going to have to get used to the idea that our liberalism and our freedoms can only be preserved by a strong state. “The progressive narrative in which freedom is advancing throughout the world has left liberal societies unaware of their fragility,” John Gray wrote. Liberals may not like it, but a strong state is the precondition of any civilised social order. Certain cherished freedoms may have to be compromised. This is the new tragic narrative.

This article first appeared in the 25 May 2017 issue of the New Statesman, Why Islamic State targets Britain

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