Osborne echoes Miliband as he calls for government to set "the rules" of the market

The Chancellor's announcement of a cap on payday loan charges undermines the coalition's attack on the Labour leader's "Marxist universe".

It was as recently as last year that George Osborne was arguing against a cap on payday loan charges. He told MPs on 6 March 2012: 

I completely understand the concern about excessive and very high interest charges, which have been a problem for many years. I think it is better to tackle the specific abuses. The Government are conducting a review of the cost of credit to consumers, but by tackling very specific abuses such as the roll-over of loans and the use of continuous authority, we think we are getting to the really hard cases and abuses that we want to see ended. I have to say—this was certainly the view of the previous Government, too—that although it could be worth looking at, simply introducing a cap might have the effect of pushing a lot of people into a completely unregulated black economy. I am not sure that any of us would want to see that.

But a cap is precisely what the coalition has announced today, declaring that there is "growing evidence" in support of the move. Interviewed on the Today programme, George Osborne confirmed that the cap would apply not just to the usurious interest rates charged by Wonga and co but also to arrangement fees, penalty fees and rollovers. He also rather euphemistically acknowledged the role "individual MPs" had played in the decision, before (after some prompting from Evan Davis) eventually referencing Stella Creasy by name.

The Walthamstow MP, who has campaigned relentlessly on this issue for three years, is rightly declaring victory today. She said this morning: "Just two months ago this Government criticised Ed Miliband for wanting to reform broken markets, and now today we see them following Labour's lead on the need to act against legal loan-sharking...That the Government is today admitting it got it wrong in opposing these measures and is still playing catch up on how to combat these problems shows it is Labour who have the ideas and determination to tackle Britain's cost of living crisis."

On Today, Osborne sounded remarkably Miliband-esque as he spoke of how government "needs to step in to create the rules of the market" and to ensure that capitalism "works for hardworking people". The Chancellor's rhetoric was all the more surprising given his private warnings to Conservative MPs not to play on Labour's turf by mimicking Miliband's focus on living standards. 
 
Osborne might be right when he argues that those who support a free market system have never believed in "complete laissez-faire" but the problem for him is that the government has often given the impression that they should. After Miliband called for a freeze on energy prices, David Cameron accused him of living in a "Marxist universe where you control these things" and declared that he needed a "basic lesson in economics".
 
The Treasury's response to those noting this irony is to argue that the government will intervene in markets (as in the case of Help to Buy) when it can do so to the genuine benefit of people; a cap on energy prices remains a "gimmick" that will help no one. But after taking action in this area and conceding that the state has a duty to set "the rules" of the market, it will become harder for the Tories to dismiss Miliband's calls for it to do so elsewhere too. 
George Osborne speaks at the Conservative conference in Manchester last month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The government has quietly shut the door on vulnerable child refugees

The government has tried to halt the Dubs Amendment, a scheme designed to save thousands of vulnerable child refugees.  

The "Dubs Amendment" to the Immigration Bill of last year, in which the government begrudgingly promised to accept 3,000 unaccompanied child refugees from other countries in Europe, was halted this month after only 350 children had been admitted.

It has since become absolutely clear that the government is wriggling out of its obligation to accept child refugees, shutting the door on the most vulnerable. 

The amendment was named after my Labour colleague in the House of Lords. Alfred Dubs, who grew up in Britain and was saved from the hands of the German Nazi regime by Nicholas Winton, who rescued 669 children virtually single-handedly from Czechoslovakia.

The decision – announced at a time when the media was mainly concentrating on Brexit - has since been the source of much outcry both within Parliament and beyond. People across Britain are clear that the government must end these efforts to prevent refugees arriving here, and this is not who we as a society are.

Labour simply cannot accept the government’s decision, which seems to breach the spirit of the law passed with cross-party support. I have challenged Home Secretary Amber Rudd on the issue. 

The government's actions have also been criticised by Yvette Cooper, who heads Labour’s refugee task force and the Home Affairs select committee, the Archbishop of Canterbury, Justin Welby, and Scotland’s First Minister, Nicola Sturgeon, who called it “a clear dereliction of the UK’s moral and global duty”. 

Then at the recent Bafta awards, a number of those in attendance including the actor Viggo Mortensen, also wore lapel badges reading “Dubs now”.

And we have seen more than 200 high-profile public figures including Ralph Fiennes, Keira Knightley, Sir Mark Rylance, Gary Lineker, Michael Morpurgo and the band Coldplay write to Theresa May calling on her government not to close the scheme, decrying the decision as “truly shameful” and adding that “the country we know and love is better than this". 

As the letter states, it is embarrassing, that this government cannot match even Winton’s total. As his own daughter put it in her letter to the Prime Minister, “I know we can’t take in every unaccompanied child in Europe, but I suppose there was a sense when the government accepted the Dubs Amendment that they would make a bigger contribution than they have.”

We need to be clear that where safe and legal routes are blocked for these children, they are left with a terrible choice between train tracks on the one hand, and people traffickers on the other. These children have been identified as the most vulnerable in the world, including girls without parents, who are susceptible to sex traffickers.

The government’s decision is particularly disappointing in that we know that many local authorities across Britain, which assume responsibility for the children once they are admitted to the country, are willing to accept more refugees.

Yet the public outcry shows we can still force a change.

Interestingly, former Conservative minister Nicky Morgan has argued that: “Britain has always been a global, outward-facing country as well as being compassionate to those who need our help most. The Conservative party now needs to demonstrate that combination in our approach to issues such as the Dubs children.”

Let’s keep the pressure up on this vital issue. The internationally agreed principles and the Dubs Amendment were never conceived as a “one-off” - they should continue to commit to meeting their international treaty obligations and our own laws.

And on our part, Labour commits to meeting the obligations of the Dubs Amendment. We will restore the scheme and accept some of the most vulnerable children in the world.

 

Diane Abbott is Labour MP for Hackney North and Stoke Newington, and shadow home secretary. She was previously shadow secretary for health.