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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Hopes of an anti-Brexit party are illusory, but Remainers have a new plan to stay in the EU

Stopping Brexit may prove an impossible task. Remainers are looking to the "Article 49 strategy": reapplying for EU membership. 

The Remain campaign lost in the country, but it won by a landslide in parliament. On 23 June 2016, more than two-thirds of MPs voted for EU membership. Ever since the referendum, the possibility that parliament could thwart withdrawal, or at least soften it, has loomed.

Theresa May called an early general election in the hope of securing a majority large enough to neutralise revanchist Remainers. When she was denied a mandate, many proclaimed that “hard Brexit” had been defeated. Yet two months after the Conservatives’ electoral humbling, it appears, as May once remarked, that “nothing has changed”. The government remains committed not merely to leaving the EU but to leaving the single market and the customs union. Even a promise to mimic the arrangements of the customs union during a transition period is consistent with May’s pre-election Lancaster House speech.

EU supporters once drew consolation from the disunity of their opponents. While Leavers have united around several defining aims, however, the Remainers are split. Those who campaigned reluctantly for EU membership, such as May and Jeremy Corbyn, have become de facto Brexiteers. Others are demanding a “soft Brexit” – defined as continued single market membership – or at least a soft transition.

Still more propose a second referendum, perhaps championed by a new centrist party (“the Democrats” is the name suggested by James Chapman, an energetic former aide to George Osborne and the Brexit Secretary, David Davis). Others predict that an economic cataclysm will force the government to rethink.

Faced with this increasingly bewildering menu of options, the average voter still chooses Brexit as their main course. Though Leave’s referendum victory was narrow (52-48), its support base has since widened. Polling has consistently shown that around two-thirds of voters believe that the UK has a duty to leave the EU, regardless of their original preference.

A majority of Remain supporters, as a recent London School of Economics study confirmed, favour greater controls over EU immigration. The opposition of a significant number of Labour and Tory MPs to “soft Brexit” largely rests on this.

Remainers usually retort – as the Chancellor, Philip Hammond, put it – “No one voted to become poorer.” Polls show that, as well as immigration control, voters want to retain the economic benefits of EU membership. The problem is not merely that some politicians wish to have their cake and eat it, but that most of the public does, too.

For Remainers, the imperative now is to avoid an economic catastrophe. This begins by preventing a “cliff-edge” Brexit, under which the UK crashes out on 29 March 2019 without a deal. Though the Leave vote did not trigger a swift recession, a reversion to World Trade Organisation trading terms almost certainly would. Although David Davis publicly maintains that a new EU trade deal could swiftly be agreed, he is said to have privately forecast a time span of five years (the 2016 EU-Canada agreement took seven). A transition period of three years – concluded in time for the 2022 general election – would leave the UK with two further years in the wilderness without a deal.

A coalition of Labour MPs who dislike free movement and those who dislike free markets has prevented the party endorsing “soft Brexit”. Yet the Remainers in the party, backed by 80 per cent of grass-roots members, are encouraged by a recent shift in the leadership’s position. Although Corbyn, a Bennite Eurosceptic, vowed that the UK would leave the single market, the shadow Brexit secretary, Keir Starmer, and the shadow chancellor, John McDonnell, have refused to rule out continued membership.

A group of Remainers from all parties met in the Labour MP Chuka Umunna’s office before recess, and they are hopeful that parliament will force the government to commit to a meaningful transition period, including single market membership. But they have no intention of dissolving tribal loyalties and uniting under one banner. A year after George Osborne first pitched the idea of a new party to Labour MPs, it has gained little traction. “All it would do is weaken Labour,” the former cabinet minister Andrew Adonis, a past Social Democratic Party member, told me. “The only way we can defeat hard Brexit is to have a strong Labour Party.”

In this febrile era, few Remainers dismiss the possibility of a second referendum. Yet most are wary of running ahead of public opinion. “It would simply be too risky,” a senior Labour MP told me, citing one definition of insanity: doing the same thing and expecting a different result.

Thoughtful Remainers, however, are discussing an alternative strategy. Rather than staging a premature referendum in 2018-19, they advocate waiting until the UK has concluded a trade deal with the EU. At this point, voters would be offered a choice between the new agreement and re-entry under Article 49 of the Lisbon Treaty. By the mid-2020s, Remainers calculate, the risks of Brexit will be clearer and the original referendum will be history. The proviso is that the EU would have to allow the UK re-entry on its existing membership terms, rather than the standard ones (ending its opt-outs from the euro and the border-free Schengen Area). Some MPs suggest agreeing a ten-year “grace period” in which Britain can achieve this deal – a formidable challenge, but not an impossible one.

First, though, the Remainers must secure a soft transition. If the UK rips itself from the EU’s institutions in 2019, there will be no life raft back to safe territory. The initial aim is one of damage limitation. But like the Leavers before them, the wise Remainers are playing a long game.

George Eaton is political editor of the New Statesman.

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear