Is benefit-bashing the next Osborne gamble to go wrong?

The Chancellor was ready to be seen as heartless. He didn't count on also looking hopeless.

The row about work capability assessments rumbles on. These are the tests that are meant to establish which recipients of incapacity benefit should be deemed fit and moved to a lower, more conditional rate. The Department for Work and Pensions insists the tests - administered by Atos, a private contractor - are an effective way of distinguishing between those genuinely unable to take on work and those who might simply have given up trying. Critics of the process allege it is a cynical device to shovel disabled and chronically ill people from a benefit that costs the Exchequer lots of money to one that costs less - without due regard for the personal circumstances and medical nuances of individual cases.

The accusation is that the government, confident of political cover in the form of the widespread assumption that many benefit claims are bogus, is saving money by targeting people unable to fight back and who mostly don't vote Tory. The rebuttal is that the DWP is working hard to get everyone into work - which for many people currently receiving incapacity benefit would have a rehabilitative effect, restoring independence and self esteem. As one government advisor put it to me recently: "Which part of your progressive tradition says it is ok to just let people rot on benefits their whole lives?" (Of course, for the DWP "tough love" narrative to have a happy ending, there need to be enough jobs out there ... )

It is worth noting that Atos first got contracts to do these assessments under the last Labour government. The assumption then, as now, was that family GPs were too indulgent in handing out 'sick notes' or felt intimidated if they refused to accept a patient's claim of inability to work. The current government has accelerated the process and ramped up the scale. A predictable consequence is the accusation of brutal targeting - setting semi-official minimum rates for assessors to clear people as fit for work. Atos deny this. The number of decisions successfully contested in court certainly suggests some cavalier assessment is going on. Today's story in the Guardian suggesting the DWP sought to censor information about the appeals process suggests ministers think the courts represent some kind if loophole for scroungers who might slip through the Atos net.

So far this whole story hasn't made a big political impact. That is largely because the received wisdom in Westminster is that public opinion supports the government almost without equivocation when it comes to benefit cuts. That view is backed up by polling, private and public, showing most people would gladly see the axe wielded harder and faster against the welfare budget. Labour, for that very reason, are squeamish about opposing benefit cuts. Their MPs hear enough complaints about 'scroungers' on the doorstep to know how toxic the issue can be. The famous squeezed middle that Ed Miliband would like to represent simmers with as much resentment against neighbours whose rent is paid by the state as against bankers.  

That sentiment is what lies behind the strategic decision by the Chancellor to target the welfare bill in his deficit reduction programme (that and, of course, the sheer size of the DWP spend, but the numbers are often inflated by pension payments.) Osborne's calculation is that you can hardly be too tough on benefits. Squeezing the so-called scroungers creates a nifty dividing line from Labour and keeps the public on side for painful cuts. The last government, the story goes, wasted all of the taxpayers' money handing out dole cheques for people to spend on strong lager and sit around watching Jeremy Kyle. The Tories are clearing up the mess. Etc.

A thought: what if Osborne is wrong about this? Opinion polls and Tory-leaning newspapers still endorse the benefit-bashing approach. But the Conservative approach, if it is not to look plain vindictive, relies on two things. First, the fiscal strategy must actually be seen to be working. Second, there must be jobs for people who are allegedly workshy to be ushered into. Both conditions are looking unmet in the absence of economic growth - and the real effect of departmental budget squeezes has hardly kicked in at all. At the start of this parliament it was reasonable to assume that many voters accepted the need for some harsh treatment at the hands of the coalition in the name of necessary budgetary correction. That support was conditional on the pain being delivered fairly and competently.  If, as one shadow cabinet minister puts it, the Tories look "hopeless as well as heartless" the political dynamic changes dramatically.

I doubt the ambient cultural noise around scrounging and benefit fraud will quieten down very quickly. But a prolonged slump, in which ever more people - and people higher up the income scale - feel insecure is bound to have an impact on perceptions of those who have fallen through the safety net. It is not inconceivable that scorn will turn to pity, especially if there are grounds for doubting the government's basic competence in delivering cuts fairly.  Lib Dem MPs will also come under increasing pressure in the next public spending review to distance themselves from Osborne's aggressive targeting of welfare. The junior coalition party has to present itself as the palliative agent in the mix, softening harsh Tory edges.

Besides, and this is the point where Tories should feel nervous, the whole "can't be too tough on benefits" approach came from the mind of Osborne, whose greatest strategic gamble so far - on the economy - has unravelled. If, as seems now apparent, he is not the Chess Grandmaster of politics as he was once advertised to be, is it not possible that he has called this one wrong too?

George Osborne plans to reduce the welfare budget by a further £10bn. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.