Labour plans to challenge Lib Dem MPs with bedroom tax vote

The party's announcement that it will hold a Commons vote next Tuesday on scrapping the measure is a test of those in Clegg's party who have condemned it.

After flooding what he once called the "blank page" with policies, Ed Miliband is setting a series of parliamentary tests for Labour's opponents. Tomorrow, the party will use an opposition day debate to stage a vote on its proposed energy price freeze. Miliband will say in his speech today on living standards: "It is workable, it will happen if Labour wins the next election. And tomorrow Conservative and Liberal Democrat MPs could vote for it. If they line up against it, the British people will know the truth: this government is on the side of the big energy companies not hard-pressed families." It's one thing for the coalition parties not to support an energy price freeze, but it's another for them to actively vote against it. 

Then on Tuesday, Labour will hold a similar vote on its pledge to scrap the bedroom tax. For Lib Dem MPs, this represents a particular challenge. As evidence has grown of the harm inflicted by the policy, Clegg's party has become increasingly uncomfortable with the government's stance. At its recent conference, the party voted in favour of a motion calling for "an immediate evaluation of the impact of the policy" and for "a redrafting of clear housing needs guidelines in association with those representing vulnerable groups including the disabled, elderly and children."

Until new guidelines are in place, it argued that there should be no withdrawal of housing benefit from those on the waiting list for social housing and that there should be an exemption for those who "temporarily have a smaller housing need due to a change in their circumstances, but whose need will predictably return to a higher level (e.g. whose children will pass the age limits for separate rooms within that period)".

But some senior figures went further, with Shirley Williams describing it as "a big mistake" and Charles Kennedy commenting: "I didn’t support it in the Commons and I’m not going to support it here. Mine is the largest geographic constituency in the whole of the UK – but it’s not untypical from any rural area, or for that matter urban area. In a rural area, you don’t have the flexibility, you don’t have the spare capacity in housing to move people vast distances." Another MP, Andrew George, has said: "It is one of the absurdities of the system that it is supposed to save money but it is likely to land the taxpayer with a bigger bill. It will inevitably force rural tenants out of villages where they have lived for years, taking them away from their extended families, schools and support networks. It will take key workers away from areas where they perform vital roles."

Clegg's recent emphasis on the "independent research" the government had commissioned on the policy was an attempt to buy some breathing space. He told the Commons: "Of course, I accept that there will be cases where for some households this change from one system to another creates real dilemmas which need to be addressed through the money we are making available to local authorities.

"To be honest, I have seen lots of widely different figures being cited about the impact of this policy - that is why we are commissioning independent research to exactly understand the impact of this."

While Clegg's words left the impression that he had announced a new review, the study was in fact announced in March by Iain Duncan Smith, who said then: "Going forward I will continue to closely monitor and adjust the implementation of the policy, including an independent evaluation by Ipsos MORI, the Cambridge centre for housing and planning research and the Institute For Fiscal Studies to ensure that the needs of these groups are effectively addressed in the longer term."

As luck would have it, the DWP will this week publish research on "public perceptions of the removal of the spare room subsidy". Should that study confirm public hostility to the measure, a significant number of Lib Dem backbenchers will feel encouraged to join Labour in the division lobby on Tuesday. 

Campaigners protest against the bedroom tax in Trafalgar Square before marching to Downing Street on 30 March 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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How the Conservatives lost the argument over austerity

After repeatedly missing their deficit targets, the Tories can no longer present spending cuts as essential.

“The age of irresponsibility is giving way to the age of austerity,” declared David Cameron at the Conservatives' 2009 spring conference. Fear of spending cuts helped deny his party a majority a year later, but by 2015 the Tories claimed vindication. By framing austerity as unavoidable, they had trapped Labour in a political no man's land. Though voters did not relish cuts, polling consistently showed that they regarded them as necessary.

But only two years later, it is the Conservatives who appear trapped. An austerity-weary electorate has deprived them of their majority and the argument for fiscal restraint is growing weaker by the day. If cuts are the supposed rule, then the £1bn gifted to the Democratic Unionist Party is the most glaring exception. Michael Fallon, the Defence Secretary, sought to justify this largesse as "investment" into "the infrastructure of Northern Ireland" from "which everybody will benefit" – a classic Keynesian argument. But this did not, he hastened to add, mean the end of austerity: "Austerity is never over until we clear the deficit."

Britain's deficit (which peaked at £153bn in 2009-10) was the original and pre-eminent justification for cuts. Unless borrowing was largely eliminated by 2015, George Osborne warned, Britain's public finances would become unsustainable. But as time has passed, this argument has become progressively weaker. The UK has cumulatively borrowed £200bn more than promised by Osborne, yet apocalypse has been averted. With its low borrowing costs, an independent currency and a lender of last resort (the Bank of England), the UK is able to tolerate consistent deficits (borrowing stood at £46.6bn in 2016-17).

In defiance of all this, Osborne vowed to achieve a budget surplus by 2019-20 (a goal achieved by the UK in just 12 years since 1948). The Tories made the target in the knowledge that promised tax cuts and spending increases would make it almost impossible to attain – but it was a political weapon with which to wound Labour.

Brexit, however, forced the Conservatives to disarm. Mindful of the economic instability to come, Philip Hammond postponed the surplus target to 2025 (15 years after Osborne's original goal). Britain's past and future borrowing levels mean the deficit has lost its political potency.

In these circumstances, it is unsurprising that voters are increasingly inclined to look for full-scale alternatives. Labour has remade itself as an unambiguously anti-austerity party and Britain's public realm is frayed from seven years of cuts: overburdened schools and hospitals, dilapidated infrastructure, potholed roads, uncollected bins.

Through a shift in rhetoric, Theresa May acknowledged voters' weariness with austerity but her policies did not match. Though the pace of cuts was slowed, signature measures such as the public sector pay cap and the freeze in working-age benefits endured. May's cold insistence to an underpaid nurse that there was no "magic money tree" exemplified the Tories' predicament.

In his recent Mansion House speech, Philip Hammond conceded that voters were impatient "after seven years of hard slog” but vowed to "make anew the case" for austerity. But other Tories believe they need to stop fighting a losing battle. The Conservatives' historic strength has been their adaptability. Depending on circumstance, they have been Europhile and Eurosceptic, statist and laissez-faire, isolationist and interventionist. If the Tories are to retain power, yet another metamorphosis may be needed: from austerity to stimulus.

George Eaton is political editor of the New Statesman.

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