Osborne's new welfare measures are anything but fair

Regardless of the actual levels of need, the poor will lose out under the Chancellor's cap.

Big or small, the Chancellor’s spending review announcements on social security were anything but fair.

Take the his most significant plan, to impose a 'super-cap' on the majority of working-age benefits. While Osborne has confirmed that out-of-work benefits will not be included in the cap, other key sources of support such as housing benefit, disability benefits and in-work support for those on low-incomes will all be subject to a nominal limit regardless of the actual levels of need.

So what does this mean in real-terms? If demand exceeds the (artificially capped) supply, benefits will have to be spread more thinly or eligibility restricted in other ways. Low-income families and individuals, then, will have to bear the cost of rising rents, ill-health, low pay and cuts to hours, all of which, of course, are factors beyond their control. It’s hard to see the fairness in that.

On a smaller scale, the announcement that those who lose their jobs will not be eligible for support until seven days have elapsed is mean-spirited in the extreme. While the sums may not seem huge (a couple would lose £64 a week as a result), this move can only cause more hardship in already hard times. How the new rule will work once Universal Credit (UC) is introduced is unclear: will claimants be able to access any of their UC award for the first seven days once all their benefits are rolled up into one? Denying claimants all sources of support in such a situation hardly seems fair either.

Look to the Treasury’s distributional analysis and the real story of the spending review is exposed. While the Chancellor made much of the fact that "those with the broadest shoulders are bearing the greatest burden", the government’s charts (2.D and 2.E) show that those with the slimmest are being made to carry an almost equal amount of the pain. Fairness, then, is clearly very much in the eye of the beholder…

A residential development in the London borough of Tower Hamlets. A recent study has shown that 42 per cent of children in Tower Hamlets live in poverty, making it the worst area of the UK for child poverty. Photograph: Getty Images.

Alison Garnham is chief executive of the Child Poverty Action Group

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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