Labour tries to avoid falling into Osborne's welfare trap

Balls signals that he is willing to support the Chancellor's new curbs on claimants, including a seven-day wait for benefits.

Every time that George Osborne announces new restrictions on benefits it has as much to do with tripping up Labour as it does with saving money. Aware of how much support the party's perceived softness on claimants cost it in 2010, he aims to paint it as "the welfare party". 

Having opposed most of the £18bn of cuts previously announced by the coalition, it is a trap Ed Miliband and Ed Balls are now keen to avoid. After Osborne announced in the Budget that he would unveil plans to cap Annually Managed Expenditure (AME) in the Spending Review, (the area of public spending that includes volatile and demand-led items such as welfare, debt interest and EU contributions), Labour pre-empted him by outlining its own cap on "structural" welfare spending and announced that it would remove Winter Fuel Payments from the wealthiest 5 per cent of pensioners, a (rather successful) attempt to redirect attention on to the main driver of higher social spending: an ageing population. 

In today's review, Osborne announced a series of tougher rules for claimants, including a seven-day wait before they can claim benefits, a duty to learn English (with benefits docked if they fail to attend language classes), the introduction of weekly, rather than fortnightly, visits to the jobcentre for half of all jobseekers, a requirement for all single parents of children aged three or over to prepare for work and a duty for individuals to prepare a CV and register for an online job search before they can receive benefits. 

In response, it was notable that Balls avoided opposing any of the measures outright. He told BBC News: 

We need to look at the detail, obviously. On the welfare things, English language for incoming migrants - definitely. For the seven-day - is it going to be a blank cheque for Wonga? Let's look at the detail. If it saves money and it works, fine.

So, while expressing some scepticism, Balls has essentially accepted the principle of a seven-day wait for benefits provided that it "saves money" (it will, but at a terrible cost to claimants forced to turn to foodbanks) and that it "works" (again, based on Osborne's definition, it will). Nor, the party signalled, will it oppose the requirement for single parents to look for work. 

In his statement, Osborne also served notice of the biggest welfare trap of all. He announced that his new cap on total benefit spending would be set in next year's Budget and would apply from April 2015. Expect him to adopt the toughest limit possible and then challenge Labour to match it. Should it do so, it will be accused of signing up to an unconscionable attack on the poorest. Should it not, it will be accused of failing to control runaway spending. Having signalled that it will not borrow more to reverse cuts to current spending (only to invest in capital projects such as housing), any difference will need to be funded through tax rises. 

Ed Miliband and Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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