George Osborne thinks he can win by appealing to mean-spiritedness

Here's why he's wrong.

During his pre-budget statement last week, the Chancellor George Osborne set out his intent to ensure that many benefits only rise by one per cent for the next three years.

This has been hailed by some on the right of politics as a fiscally responsible thing to do and a way of ensuring that benefits do not rise by more than many people's wages have in the last few years. There have been others who have claimed that it is regressive and unfair to heap such a burden of real-terms cuts on those in society least able to afford it.

But what many think, regardless of what they consider the rights and wrongs of the decision, is that Osborne has set a clever trap for Eds Miliband and Balls to fall into. The theory goes that public opinion is on the side of those who want to "control" the benefits bill and that anyone arguing against this will essentially be putting themselves on the side of the "skivers" as opposed to the "strivers".

As it happens it is beginning to look like Osborne has actually got this calculation wrong with 69 per cent of people in a recent poll saying they thought benefits should rise in line with inflation or higher. However, even without polling evidence, this move just feels wrong. The idea that the poorest in society should suffer a real terms cut in their income when many of those people are already close to the edge financially (witness the huge rise of payday lenders in recent years for example) sits very ill with me.

Part of the problem that was identified almost straight away by opponents of the measure is that 60 per cent of those affected by the cuts are actually in work. But really, that shouldn't matter either. Trying to pitch those who are working against those who are not is the worst kind of politics. The vast majority of those out of work would love to have a job and although unemployment is falling it is still far too high. Many of those who Osborne seems to be painting as skivers currently have no choice.

He has made a serious political mistake here. Ten years ago Theresa May made a speech where she described how the Conservatives had the unwelcome mantle of "The Nasty Party". This resonated because it rang true. David Cameron has spent years trying to detoxify his party with trips to the Arctic, endless speeches on the NHS and all sorts of other measures to attempt to reassure voters that they have changed.

With measures like this one per cent rise Osborne is retoxifying his party. He is punishing the poorest in society for an economic situation that they had nothing to do with creating and doing it in such a way as to try and pitch different sections of society against each other. He seems to be hoping that envy will win the day.

I hope and expect he is wrong about this. Not because opinion polls tell us so. But because I do not recognise the mean-spirited picture of Britain that he seems determined to paint. We're better than that.

The trap he thought he had set has sprung shut on the Chancellor as he tried to tip-toe away from it.

He and his party will ultimately pay a heavy price for this.

Mark Thompson is a political blogger and commentator who edits the award winning Mark Thompson's Blog and is on Twitter @MarkReckons.

George Osborne.
Getty Images.
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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.