How the Autumn Statement hit "the strivers"

Sixty per cent of welfare cuts made in this parliament will fall on the working poor.

For a Chancellor who prefaced his Autumn Statement with a declaration that he was "on the side of these who want to work hard and get on", George Osborne has made some rather inconsistent announcements yesterday.

Consider, for example, his decision to uprate tax credits at below-inflation levels for the next three years. Both working couples and lone parents look set to lose over £23 of their working tax credit (WTC) in 2013-14 as a result of this move. Not so bad, one might think, but remember that this comes on top of a prior freeze in value of other key elements of WTC which will remain in place, and which will shave an additional £60 off a working family’s entitlement next year.

The changes being made to the personal tax allowance will do little to offset this shortfall. Extending the threshold potentially leaves basic rate taxpayers £47 better off in 2013-14. But for low-income working families, much of this gain evaporates as other forms of support are tapered away in response to their higher post-tax income. While those further up the income scale will keep the full £47, a working family eligible for both housing and council tax benefit will gain only 13p a week extra as a result of extended allowances.

Osborne is fond of the notion that there is a group of hard working "strivers" out there who throw "those with their blinds down" into sharp relief. In truth, the vast majority of those who rely on benefits and tax credits for part of their income have worked, are in work, or will be back in work very shortly in the future.

And with estimates suggesting that around 60 per cent of welfare cuts made in this parliament will hit the working poor, the Chancellor must do much more to show he understands the problems that those on low incomes face. Rather than glib words, Osborne needs to start providing real, rather than merely rhetorical, support for hard-pressed working families and individuals.

Work and Pensions Secretary Iain Duncan Smith leaves 10 Downing Street on 5 December, 2012. Photograph: Getty Images.

Alison Garnham is chief executive of the Child Poverty Action Group

Photo: Getty Images
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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.