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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Over a Martini with my mother, I decide I'd rather not talk Brexit

A drink with her reduces me to a nine-year-old boy recounting his cricketing triumphs.

To the Royal Academy with my mother. As well as being a very competent (ex-professional, on Broadway) singer, she is a talented artist, and has a good critical eye, albeit one more tolerant of the brighter shades of the spectrum than mine. I love the RA’s summer exhibition: it offers one the chance to be effortlessly superior about three times a minute.

“Goddammit,” she says, in her finest New York accent, after standing in front of a particularly wretched daub. The tone is one of some vexation: not quite locking-yourself-out-of-the-house vexed, but remembering-you’ve-left-your-wallet-behind-a-hundred-yards-from-the-house vexed. This helps us sort out at least one of the problems she has been facing since widowhood: she is going to get cracking with the painting again, and I am going to supply the titles.

I am not sure I have the satirical chops or shamelessness to come up with anything as dreadful as Dancing With the Dead in My Dreams (artwork number 688, something that would have shown a disturbing kind of promise if executed by an eight-year-old), or The End From: One Day This Glass Will Break (number 521; not too bad, actually), but we work out that if she does reasonably OK prints and charges £500 a pop for each plus £1,000 for the original – this being at the lower end of the price scale – then she’ll be able to come out well up on the deal. (The other solution to her loneliness: get a cat, and perhaps we are nudged in this direction by an amusing video installation of a cat drinking milk from a saucer which attracts an indulgent, medium-sized crowd.)

We wonder where to go for lunch. As a sizeable quantity of the art there seems to hark back to the 1960s in general, and the style of the film Yellow Submarine in particular, I suggest Langan’s Brasserie, which neither of us has been to for years. We order our customary Martinis. Well, she does, while I go through a silly monologue that runs: “I don’t think I’ll have a Martini, I have to write my column this afternoon, oh sod it, I’ll have a Martini.”

“So,” she says as they arrive, “how has life been treating you?”

Good question. How, indeed, has life been treating me? Most oddly, I have to say. These are strange times we live in, a bit strange even for me, and if we wake up on 24 June to find ourselves no longer in Europe and with Nigel Farage’s toadlike mug gurning at us from every newspaper in the land, then I’m off to Scotland, or the US, or at least strongly thinking about it. Not even Hunter S Thompson’s mantra – “When the going gets weird, the weird turn pro” – will be enough to arm myself with, I fear.

The heart has been taking something of a pummelling, as close readers of this column may have gathered, but there is nothing like finding out that the person you fear you might be losing it to is probably going to vote Brexit to clear up that potential mess in a hurry. The heart may be stupid, but there are some things that will shake even that organ from its reverie. However, operating on a need-to-know basis, I feel my mother can do without this information, and I find myself talking about the cricket match I played on Sunday, the first half of which was spent standing watching our team get clouted out of the park, in rain not quite strong enough to take us off the field, but certainly strong enough to make us wet.

“Show me the way to go home,” I sang quietly to myself, “I’m tired and I want to go to bed,” etc. The second half of it, though, was spent first watching an astonishing, even by our standards, batting collapse, then going in at number seven . . . and making the top score for our team. OK, that score was 12, but still, it was the top score for our team, dammit.

The inner glow and sense of bien-être that this imparted on Sunday persists three days later as I write. And as I tell my mother the story – she has now lived long enough in this country, and absorbed enough of the game by osmosis, to know that 17 for five is a pretty piss-poor score – I realise I might as well be nine years old, and telling her of my successes on the pitch. Only, when I was nine, I had no such successes under my belt.

With age comes fearlessness: I don’t worry about the hard ball coming at me. Why should I? I’ve got a bloody bat, gloves, pads, the lot. The only things that scare me now are, as usual, dying alone, that jackanapes Farage, and bad art. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 23 June 2016 issue of the New Statesman, Divided Britain