Tories go on the attack after Balls says Labour's welfare cap would include pensions

The shadow chancellor's latest display of fiscal responsibility is a major political gamble.

When Ed Miliband announced that Labour would introduce a cap on structural welfare spending, the assumption was that it would not include spending on pensioners. But on The Sunday Politics, Ed Balls revealed that the cap would include this area. He said: "George Osborne is going to announce his cap in two weeks' time. I don't know whether he will include pensioner spending or exclude it. At the moment our plan is to include it."

This is sensible policy; pensioners currently account for 42 per cent (£85bn) of all welfare spending, a total that will rise significantly as the population ages and as the economy recovers (reducing cyclical benefit spending). If Balls and Miliband are serious about reducing the social security bill, they cannot afford to exclude them from the cap.

But the politics are difficult for Labour. The Tories, who have previously signalled that the state pension will not be included in George Osborne's cap on annually managed expenditure, will now challenge Balls and Miliband to say how they would reduce spending on the elderly. Would they abandon the coalition's commitment to "triple lock" the state pension, so that it rises by the rate of inflation, average earnings or 2.5 per cent (whichever is highest)? The Tory Treasury Twitter account has already gone on the attack.

On the programme, Balls refused to rule out cutting spending on pensioners in order to avoid breaching the cap but also said that, while means-testing the winter fuel allowance (which would save just £100m), Labour would protect other universal benefits such as free bus passes, free prescriptions and free TV licences (the administrative costs of means-testing the latter would outweigh the savings, Balls suggested). But unless Labour is willing to make reductions elsewhere, the Tories will dismiss the cap as meaningless, while highlighting the £21bn of cuts they have announced to working age benefits.

Since the over-65s are more likely to vote than any other age group (76 per cent did in 2010 compared to 65 per cent of the total population), the Tories clearly believe that there are few votes to be won in running on a platform of lower spending on the elderly. But expect Cameron to now come under pressure from fiscal conservatives to match Labour's direction of travel on pensioner benefits.

Update: Unsurprisingly, Labour has quickly rebutted the Tory line that it "would cut pensions", but has said it would be "peverse" to exclude spending on pensioners from the cap. At present, however, it can only point to increases in the retirement age and means-testing the winter fuel allowance as examples of how it would restrain spending. A source told me:

Labour supports the triple lock on the state pension. But as Ed Balls said, it would be perverse to exclude overall spending on pensioners and the impact of an ageing society from any sensible and long-term fiscal plan to monitor and control structural social security spending. That's why we have supported increases in the retirement age as people live longer and why we have also said we would not pay the winter allowance to the richest 5 per cent of pensioners. We will look at the details of the government's cap when it is announced in the spending review as we develop the details of our own.

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

George Eaton is political editor of the New Statesman.

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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue