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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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue