PMQs review: Miliband's fiercest attack yet on the welfare cuts

Labour leader says the government is hitting people "they don't meet and whose lives they will never understand".

Rarely has Ed Miliband sounded as outraged at the government as he did at today's PMQs. Challenging David Cameron on the coalition's welfare cuts, he declared: "They look after their friends, the people on their Christmas card list and, meanwhile, they hit people they don't meet and whose lives they will never understand." He turned George Osborne's rhetoric on its head by declaring that the Chancellor's cleaner would lose out "while his curtains are still drawn and he's still in bed." Despite the political risks (the majority of voters support the benefit cuts), this is a battle that Miliband has decided he must fight.

Cameron didn't deny that the 1 per cent cap on benefit increases would fall most heavily on working households ("everyone who is on tax credits will be affected by those changes," he said), rather he argued that the cap was necessary to reduce the welfare bill and pointed out that families would benefit from the large increase in the personal allowance. "This is the party for people who work, his is the party for unlimited welfare," he declared. In response, Miliband highlighted research by the Institute for Fiscal Studies showing that the average one earner couple will be £534 a year worse off by 2015, a point Cameron was unable to rebut.

But it was the personal, not the policy clashes, that were most memorable. After Cameron described Ed Balls as a bully who can "dish it out but can't take it", Miliband replied: "I've heard it all when the boy from the Bullingdon Club lectures people on bullying. Have you wrecked a restaurant recently?"

The Tories remain confident that voters will support their tough stance on the deficit and welfare, rather than Labour's. Conversely, Labour believes that the government has badly miscalculated by hitting the very "strivers" it claims to support. The outcome of the next election will likely rest on which is right. 

Labour leader Ed Miliband addresses a Trade Union Congress (TUC) rally in Hyde Park earlier this year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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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.