PMQs review: Cameron's "spare room subsidy" won't beat the "bedroom tax"

The PM has left it too late to reframe the debate over the welfare cut, not least with a phrase as clunky as his.

Bankers' bonuses may be even less popular with the public than the EU, so the Tories' decision to oppose Brussels's cap on bonuses was a political gift that Ed Miliband readily seized on at today's PMQs. The Labour leader began amusingly by asking David Cameron how he would help "John in East London", who earns £1m and is worried that his bonus may be capped at £2m. Cameron replied that bonuses were now a quarter of what they were under Labour and that he wouldn't listen to "the croupier in the casino when it all went bust". It was a strong reply - voters still blame the last Labour government for the cuts, rather than the coalition - but, politically speaking, it is hard for Cameron to reconcile this with his opposition to further curbs on bonuses. 

Miliband went on to contrast the PM's stance on bonuses, with his introduction of the "bedroom tax". At this point, Cameron declared that before moving on to the "spare room subsidy" (the PM's preferred term), he wanted Miliband to apologise for the "mess he left the country in". When Cameron deploys this tactic, Miliband usually replies that "it's called Prime Minister's Questions, I ask the questions, he answers them". But this week the Labour leader had prepared a wittier than ususal riposte. "It's good to see him preparing for opposition," he joked, adding that he was "looking forward" to facing Theresa May, whose leadership ambitions are the subject of growing speculation. At this quip, the Home Secretary shot Milband a look of thunder. 

Much of the rest of the session was taken up by the "bedroom tax", with Cameron accusing Labour of scaremongering over the policy. Referring all the time to the "spare room subsidy", the PM said that pensioners and those with severely disabled children were "exempt" from the subsidy. Except they're not; they will receive the subsidy. In his determination not to use "bedroom tax", the PM ended up misdescribing his own policy. Cameron isn't wrong to recognise the importance of "framing" the debate but after weeks in which the "bedroom tax" has become the media's phrase of choice, he has left it too late to do so. Just as the "poll tax" triumphed over the "community charge", so the "bedroom tax" will triumph over the (clunky) "spare room subsidy". 

But the PM was on stronger ground when he revealed that Labour had opposed £83bn of welfare cuts. The perception that the party is incapable of taking tough decisions and would simply "borrow more" is one that Cameron is rightly keen to encourage. And with Ed Balls and Ed Miliband unwilling to argue explicitly for deficit-financed stimulus, the charge that they are concealing their true intentions could gain ground. 

David Cameron outside 10 Downing Street. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Forget gaining £350m a week, Brexit would cost the UK £300m a week

Figures from the government's own Office for Budget Responsibility reveal the negative economic impact Brexit would have. 

Even now, there are some who persist in claiming that Boris Johnson's use of the £350m a week figure was accurate. The UK's gross, as opposed to net EU contribution, is precisely this large, they say. Yet this ignores that Britain's annual rebate (which reduced its overall 2016 contribution to £252m a week) is not "returned" by Brussels but, rather, never leaves Britain to begin with. 

Then there is the £4.1bn that the government received from the EU in public funding, and the £1.5bn allocated directly to British organisations. Fine, the Leavers say, the latter could be better managed by the UK after Brexit (with more for the NHS and less for agriculture).

But this entire discussion ignores that EU withdrawal is set to leave the UK with less, rather than more, to spend. As Carl Emmerson, the deputy director of the Institute for Fiscal Studies, notes in a letter in today's Times: "The bigger picture is that the forecast health of the public finances was downgraded by £15bn per year - or almost £300m per week - as a direct result of the Brexit vote. Not only will we not regain control of £350m weekly as a result of Brexit, we are likely to make a net fiscal loss from it. Those are the numbers and forecasts which the government has adopted. It is perhaps surprising that members of the government are suggesting rather different figures."

The Office for Budget Responsibility forecasts, to which Emmerson refers, are shown below (the £15bn figure appearing in the 2020/21 column).

Some on the right contend that a blitz of tax cuts and deregulation following Brexit would unleash  higher growth. But aside from the deleterious economic and social consequences that could result, there is, as I noted yesterday, no majority in parliament or in the country for this course. 

George Eaton is political editor of the New Statesman.