Osborne hits the unemployed and poor students

A new seven day wait before people can claim benefits and a freeze in student maintenance grants will hit the poor hardest.

George Osborne was careful in his Spending Review to avoid spelling out who would lose from the £11.5bn of cuts he announced. As Ed Balls asked in his impressively fluent response, will there be fewer police officers, fewer nurses, fewer Sure Start centres? Will free museum entry end? We weren't told today. 

But the Chancellor made no attempt to disguise two of the biggest losers: students and the unemployed. In the case of the former, Osborne announced that maintenance grants would be frozen, a real-terms cut of £60m that will fall hardest on low-income undergraduates and that entirely undermines the government's commitment to social mobility. 

In the case of the jobless, Osborne announced that he would introduce "a new seven day wait before people can claim benefits."  It will delight the tabloids, but it's hard to think of a more callous policy. As charities regularly testify, benefit delays are the biggest reason for food bank referrals. Forcing claimants to wait a minimum of seven days, with every chance of further administrative delay, will inevitably force thousands more to turn to emergency support. 

Even after handing the highest earners an average tax cut of £100,000, the Chancellor again had the chutzpah to claim that "we're all in this together". But after today's announcements, it's even more dangerous to be poor in Osborne's Britain. 

George Osborne leaves 11 Downing Street in London on June 19, 2013. 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.