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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The most terrifying thing about Donald Trump's speech? What he didn't say

No politician uses official speeches to put across their most controversial ideas. But Donald Trump's are not hard to find. 

As Donald Trump took the podium on a cold Washington day to deliver his inauguration speech, the world held its breath. Viewers hunched over televisions or internet streaming services watched Trump mouth “thank you” to the camera, no doubt wondering how he could possibly live up to his deranged late-night Twitter persona. In newsrooms across America, reporters unsure when they might next get access to a president who seems to delight in denying them the right to ask questions got ready to parse his words for any clue as to what was to come. Some, deciding they couldn’t bear to watch, studiously busied themselves with other things.

But when the moment came, Trump’s speech was uncharacteristically professional – at least compared to his previous performances. The fractured, repetitive grammar that marks many of his off-the-cuff statements was missing, and so, too, were most of his most controversial policy ideas.

Trump told the crowd that his presidency would “determine the course of America, and the world, for many, many years to come” before expressing his gratefulness to President Barack Obama and Michelle Obama for their “gracious aid” during the transition. “They have been magnificent," Trump said, before leading applause of thanks from the crowd.

If this opening was innocent enough, however, it all changed in the next breath. The new president moved quickly to the “historic movement”, “the likes of which the world has never seen before”, that elected him President. Following the small-state rhetoric of his campaign, Trump promised to take power from the “establishment” and restore it to the American people. “This moment," he told them, “Is your moment. It belongs to you.”

A good deal of the speech was given over to re-iterating his nationalist positions while also making repeated references to the key issues – “Islamic terrorism” and families – that remain points of commonality within the fractured Republican GOP.

The loss of business to overseas producers was blamed for “destroying our jobs”. “Protection," Trump said, “Will lead to great strength." He promised to end what he called the “American carnage” caused by drugs and crime.

“From this day forward," Trump said, “It’s going to be only America first."

There was plenty in the speech, then, that should worry viewers, particularly if you read Trump’s promises to make America “unstoppable” so it can “win” again in light of his recent tweets about China

But it was the things Trump didn't mention that should worry us most. Trump, we know, doesn’t use official channels to communicate his most troubling ideas. From bizarre television interviews to his upsetting and offensive rallies and, of course, the infamous tweets, the new President is inclined to fling his thoughts into the world as and when he sees fit, not on the occasions when he’s required to address the nation (see, also, his anodyne acceptance speech).

It’s important to remember that Trump’s administration wins when it makes itself seem as innocent as possible. During the speech, I was reminded of my colleague Helen Lewis’ recent thoughts on the “gaslighter-in-chief”, reflecting on Trump’s lying claim that he never mocked a disabled reporter. “Now we can see," she wrote, “A false narrative being built in real time, tweet by tweet."

Saying things that are untrue isn’t the only way of lying – it is also possible to lie by omission.

There has been much discussion as to whether Trump will soften after he becomes president. All the things this speech did not mention were designed to keep us guessing about many of the President’s most controversial promises.

Trump did not mention his proposed ban on Muslims entering the US, nor the wall he insists he will erect between America and Mexico (which he maintains the latter will pay for). He maintained a polite coolness towards the former President and avoiding any discussion of alleged cuts to anti-domestic violence programs and abortion regulations. Why? Trump wanted to leave viewers unsure as to whether he actually intends to carry through on his election rhetoric.

To understand what Trump is capable of, therefore, it is best not to look to his speeches on a global stage, but to the promises he makes to his allies. So when the President’s personal website still insists he will build a wall, end catch-and-release, suspend immigration from “terror-prone regions” “where adequate screening cannot occur”; when, despite saying he understands only 3 per cent of Planned Parenthood services relate to abortion and that “millions” of women are helped by their cancer screening, he plans to defund Planned Parenthood; when the president says he will remove gun-free zones around schools “on his first day” - believe him.  

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland