Interview: Danny Alexander on unemployment, the IMF and Scottish independence

After a 70,000 increase in unemployment and criticism of austerity by the IMF, the Chief Secretary to the Treasury insists the coalition is not on "the wrong path".

It’s been said that the Welfare Reform Act is the most ambitious overhaul the UK’s welfare system has seen in 60 years. It was billed as a restoration of the UK’s welfare system to “one that is fair for society” and promised to improve the lives of 2.8 million low income households; however, according to preliminary research conducted by the New Statesman, the Act has actually made the lives of 2.6 million British families worse. So, who did the reforms help?

“Well look, the central purpose of the reforms is to ensure that we have a welfare system in which people are always better off in work than on benefits – and one of the things that we found with the welfare system as it was when we came into government was that an awful lot of people for whom that just wasn’t the case. So, the system was encouraging people not to go into work, but to stay on benefits instead – and there are an awful lot of people who, with the right support, encouragement and incentives can get into work, are capable of working and want to work. There are also a large numbers of people on benefits – 2.8 million people on incapacity benefit, is one example – who had simply been left on that benefit for very many years without the help and support, many of whom wanted to work and couldn’t.
 
And so I think having a welfare system that genuinely means two things: firstly it has to support people when they’re genuinely in need. Secondly, it has to ensure that people are better off in work than on benefit. That’s good for the whole country, because if you have a welfare system that is offering the opposite incentives – that distorts that whole way our labour market works – it means that there’s an awful lot of people who could be contributing to the economy through work who are not able to do so. But of course, you also have to make sure that those people who genuinely can’t work are also properly helped and supported – and so I think the reforms are fair to those individuals for that reason, but also fair to society at large. We’re asking everybody in this country who pays tax to help support the over £200bn a year cost of our welfare system – and at a time when there is real pressure on our resources as a country, we have an additional responsibility to make sure that resources are used in the right way. Therefore, I think that these reforms are true – if you like – to the original intentions of the welfare system as it was designed and set up by William Beveridge all those years ago.”
 
The IMF recently lambasted the British government for its ‘too-much-too-soon’ austerity measures. Is there any validity to such claims?
 
“I think that dealing with the deficit, that reduction to public spending and so on, are absolutely necessary to restore our country back to health. When we came into office, the deficit – which is the gap between what we raise in tax and what we spend – was over £150bn. To put that in a different way, that’s more than the entire cost of running the National Health Service in England, Wales, Scotland and Northern Ireland – it’s just not sustainable as a country to go on like that.
 
But also, importantly, the interest rates that we pay as a country are very important because we pay a lot of interest on that debt, but also it feeds through to the interest rates that people pay on their homes and their mortgages, businesses and so on. By having a policy for dealing with those financial problems – that the people who borrowing the money trust the financial markets – we’ve managed to keep our interest rates very low. That’s good for the economy as a whole; so, my big worry would be if we abandon that and say, ‘we’re gonna borrow even more and spend even more’, that we would jeopardise that credibility, interest rates would go up and that would be very painful for the whole country.
 
I think that where I would say we’re already actually acting on the sorts of things the IMF has said is that we’ve been very flexible in how we respond to changing circumstances. Just in the budget, last month, despite deterioration in the economy’s forecast, we didn’t chase the numbers with even more cuts. We stuck to the plan we had, and we allowed the automatic stabilisers in our economy to operate in full so that when the economy’s going more slowly than people expect, we’re allowing the borrowing to pick up the strain of lower than expected tax receipts – so, welfare spending, unemployment benefits and so on – may be slightly higher than expected. So actually, I think we’ve shown a lot of flexibility, but the basic plan to get our public finances back into balance I think is essential to the future of our economy.”
 
Figures released this week indicated that unemployment amongst Britons jumped by 70,000 in the three months ending in February – reaching an estimated total of 2.56 million. To some extent, do these figures not validate criticism of George Osbourne’s austerity measures?
 
“I don’t think we’re on the wrong path – and of course I think about this a lot, you know? I’m one of those people responsible for those decisions, so of course I spend a lot of time looking at these things and thinking about them and so on. But the conclusion I’ve reached – and the conclusion the government has reached – is that for all the reasons I’ve just explained, the path we’re on is the right one. We’ve got to stick to that path, we’ve got to do even more at every stage to encourage and support British businesses, to invest and create jobs to grow.
 
Actually, I think if you look over the last two and a half years, the record on employment and the number of new jobs being created in our economy is a success story. Well over a million jobs have been created in the private sector over the past 2 years, and the number of people in work in this country is at one of the highest levels it’s ever been in the United Kingdom. If you compare that to similar countries like France and Germany for example, where their growth forecasts are lower, in France the unemployment is much higher. This suggests that some of the things we’re doing are helping.”
 
I don’t believe everything that Ed Balls says, but…
 
“No, you really shouldn’t.”
 
…he’s called the coalition’s income tax changes a “giveaway” for the rich…
 
“No, I think it’s total nonsense – and also, total hypocrisy coming from a Labour party that left us with a tax system that’s so full of holes that the wealthiest in this country could avoid tax left, right and centre. So I think it’s pretty hypocritical, to be honest.”
 
So, does that mean the system is fair for everyone?
 
“I think by far the biggest income tax cut that came through the system in April was that the increase in the tax-free amount that every pays. Everyone who’s working on the basic rate income tax – 25 million people this month across the UK – are getting an income tax cut because we’re putting our own resources where we promised in the Lib Dem manifesto we would do, which is in cutting taxes for working people. Actually, the wealthiest in society are paying more tax now than they ever did when Ed Balls was in government.”
 
The so-called ‘granny tax’ – which will mean that the personal allowance for pensioners no longer rises with inflation – has received almost as much criticism as the removal of the "spare room subsidy". Shouldn't a person’s income increase to match inflation and unavoidable rises in the costs of living?
 
“As we’re increasing the personal allowance for everyone else so much more quickly than forecast – it will be £10,000 next year – we think it is right, and in the long term, a simplification of the tax system to have the same tax for everybody. But for pensioners, I think we have made some important changes so the rate of increase in the state pension now is greater than it’s ever been before. So, previously it was done by inflation – and that led to derisory increases in previous governments like under Gordon Brown’s 75p a week increase at one stage. But we’ve put in place a triple lock that says that we will increase it every year by inflation, earnings or 2.5% – whichever is the higher. And so, the basic pension that everyone gets is going up much faster than it would have done if we’d left things previously. Only about half of pensioners pay income tax, so I think that’s a good balance.”
 
A couple of weeks ago, cities across the nation took to the streets in protest over the ‘bedroom tax’ – the biggest by far taking place in Glasgow, with an estimated 3,000 protesters. As tensions increase in the run up to the Scottish independence referendum, do you not think that some of these austerity measures will push voters into the hands of the SNP?
 
“No I don’t. I think that the vast majority of people in my constituency and elsewhere are better off as a result of the tax and benefit changes that are coming through tis April. The income tax in particular is a real help especially in areas where people’s incomes are lower – such as in the highlands, where the incomes are lower than the rest of the country – those income tax cuts will make a real difference, as will the acts on fuel duty and in other areas. And look, I think the biggest thing that everyone in Scotland is facing is the debate on independence, and I think that the vast majority of Scots of all age groups and all backgrounds recognise that we’re better together as part of the UK. People see the Nationalists for what they are – which is an organisation that has a one-track mind and want to break up the United Kingdom. That’s the wrong thing for the country, and so I look forward to being successful in that campaign.”
 
Nash Riggins is the politics editor of Brig Newspaper
Chief Secretary to the Treasury Danny Alexander arrives at number 10, Downing Street ahead of a cabinet meeting. Photograph: Getty Images.
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The decline of the north's sporting powerhouse

Yorkshire historically acted as a counterweight to the dominance of southern elites, in sport as in politics and culture. Now, things are different.

On a drive between Sheffield and Barnsley, I spotted a striking painting of the Kes poster. Billy Casper’s two-fingered salute covered the wall of a once-popular pub that is now boarded up.

It is almost 50 years since the late Barry Hines wrote A Kestrel for a Knave, the novel that inspired Ken Loach’s 1969 film, and it seems that the defiant, us-against-the-world, stick-it-to-the-man Yorkshireness he commemorated still resonates here. Almost two-thirds of the people of south Yorkshire voted to leave the EU, flicking two fingers up at what they saw as a London-based establishment, detached from life beyond the capital.

But whatever happened to Billy the unlikely lad, and the myriad other northern characters who were once the stars of stage and screen? Like the pitheads that dominated Casper’s tightly knit neighbourhood, they have disappeared from the landscape. The rot set in during the 1980s, when industries were destroyed and communities collapsed, a point eloquently made in Melvyn Bragg’s excellent radio series The Matter of the North.

Yorkshire historically acted as a counterweight to the dominance of southern elites, in sport as in politics and culture. Yet today, we rarely get to hear the voices of Barnsley, Sheffield, Doncaster and Rotherham. And the Yorkshire sporting powerhouse is no more – at least, not as we once knew it.

This should be a matter of national concern. The White Rose county is, after all, the home of the world’s oldest registered football club – Sheffield FC, formed in 1857 – and the first English team to win three successive League titles, Huddersfield Town, in the mid-1920s. Hull City are now Yorkshire’s lone representative in the Premier League.

Howard Wilkinson, the manager of Leeds United when they were crowned champions in 1992, the season before the Premier League was founded, lamented the passing of a less money-obsessed era. “My dad worked at Orgreave,” he said, “the scene of Mrs Thatcher’s greatest hour, bless her. You paid for putting an axe through what is a very strong culture of community and joint responsibility.”

The best-known scene in Loach’s film shows a football match in which Mr Sugden, the PE teacher, played by Brian Glover, comically assumes the role of Bobby Charlton. It was played out on the muddy school fields of Barnsley’s run-down Athersley estate. On a visit to his alma mater a few years ago, David Bradley, who played the scrawny 15-year-old Billy, showed me the goalposts that he had swung from as a reluctant goalkeeper. “You can still see the dint in the crossbar,” he said. When I spoke to him recently, Bradley enthused about his lifelong support for Barnsley FC. “But I’ve not been to the ground over the last season and a half,” he said. “I can’t afford it.”

Bradley is not alone. Many long-standing fans have been priced out. Barnsley is only a Championship side, but for their home encounter with Newcastle last October, their fans had to pay £30 for a ticket.

The English game is rooted in the northern, working-class communities that have borne the brunt of austerity over the past six years. The top leagues – like the EU – are perceived to be out of touch and skewed in favour of the moneyed elites.

Bradley, an ardent Remainer, despaired after the Brexit vote. “They did not know what they were doing. But I can understand why. There’s still a lot of neglect, a lot of deprivation in parts of Barnsley. They feel left behind because they have been left behind.”

It is true that there has been a feel-good factor in Yorkshire following the Rio Olympics; if the county were a country, it would have finished 17th in the international medals table. Yet while millions have been invested in “podium-level athletes”, in the team games that are most relevant to the lives of most Yorkshire folk – football, cricket and rugby league – there is a clear division between sport’s elites and its grass roots. While lucrative TV deals have enriched ruling bodies and top clubs, there has been a large decrease in the number of adults playing any sport in the four years since London staged the Games.

According to figures from Sport England, there are now 67,000 fewer people in Yorkshire involved in sport than there were in 2012. In Doncaster, to take a typical post-industrial White Rose town, there has been a 13 per cent drop in participation – compared with a 0.4 per cent decline nationally.

Attendances at rugby league, the region’s “national sport”, are falling. But cricket, in theory, is thriving, with Yorkshire winning the County Championship in 2014 and 2015. Yet Joe Root, the batsman and poster boy for this renaissance, plays far more games for his country than for his county and was rested from Yorkshire’s 2016 title decider against Middlesex.

“Root’s almost not a Yorkshire player nowadays,” said Stuart Rayner, whose book The War of the White Roses chronicles the club’s fortunes between 1968 and 1986. As a fan back then, I frequently watched Geoffrey Boycott and other local stars at Headingley. My favourite was the England bowler Chris Old, a gritty, defiant, unsung anti-hero in the Billy Casper mould.

When Old made his debut, 13 of the 17-strong Yorkshire squad were registered as working-class professionals. Half a century later, three of the five Yorkshiremen selec­ted for the last Ashes series – Root, Jonny Bairstow and Gary Ballance – were privately educated. “The game of cricket now is played in public schools,” Old told me. “Top players are getting huge amounts of money, but the grass-roots game doesn’t seem to have benefited in any way.”

“In ten years’ time you won’t get a Joe Root,” Rayner said. “If you haven’t seen these top Yorkshire cricketers playing in your backyard and you haven’t got Sky, it will be difficult to get the whole cricket bug. So where is the next generation of Roots going to come from?” Or the next generation of Jessica Ennis-Hills? Three years ago, the Sheffield stadium where she trained and first discovered athletics was closed after cuts to local services.

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era