Diane Abbott told The Staggers that she was opposed to an "arbitrary cap". Photograph: Getty Images.
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Labour MPs set to rebel against party over welfare cap

Diane Abbott and other backbenchers refuse to join leadership in backing Osborne's measure.

When George Osborne announced the level of the new cap on welfare spending in his Budget and the government's plan to stage a vote on the issue this week, many predicted Labour would walk into his "trap" and vow to oppose the measure. But immediately after the Chancellor's speech, Ed Balls defied expectations by announcing that his party would be supporting it. As he explained at his post-Budget briefing to journalists, "We'll vote yes on the welfare cap next week...Ed Miliband called for a welfare cap last year, in his speech in June, and we have agreed with the way in which the government has structured the welfare cap, what's in and what's out in the next parliament."

Since the cap (set at £119bn for 2015-16) excludes cyclical benefits such as Jobseeker's Allowance and housing benefit for the unemployed, spending on which fluctuates according to the state of the economy, Labour is prepared to accept it. As Balls alluded to, Ed Miliband used his speech on social security last summer to announce his support for a cap on "structural welfare spending", a pre-emptive move designed to spike Osborne's guns.

But while the Labour leadership has endorsed the government's cap (and will whip MPs in favour on Wednesday), a significant minority of Miliband's backbenchers are opposed to the policy. When I spoke to Diane Abbott this morning, she told me that she would not be voting in favour of the cap on the grounds that it will "encourage cuts in benefits, rather than long-term strategies to do things to bring the benefits bill down, like housebuilding, like a rise in the minimum wage ... I cannot support an arbitrary cap".

She warned that the measure was "part of a political narrative which demonises welfare claimants; most of the public don’t understand that half of welfare claimants are pensioners and that another quarter are in work." When I asked her whether she would be voting against, she told me that she was "consulting with her local party". But backbenchers John McDonnell, Ian Lavery and Mike Wood have all told The Staggers that they will be opposing the measure, with at least 10-15 expected to join them.

The size of the rebellion will be a good indicator of the number of MPs who could be expected to oppose future austerity measures introduced under a Labour government. If Miliband enters Downing Street with a small majority, he could be held hostage by his party's left. 

P.S. The Tories are keen to point out that as well as voting for the welfare cap on Wednesday, Labour will also be endorsing Osborne's current fiscal rules: to eliminate the structural deficit over a rolling, five-year period and to reduce the national debt as a proportion of GDP by 2015-16. But one Labour source pointed out to me that the Chancellor is still forecast to breach the second of these commitments (debt is not forecast to fall until 2016-17), remarking that "the Tories have rather messed this up if they want to highlight their broken fiscal targets".

George Eaton is political editor of the New Statesman.

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We still have time to change our minds on Brexit

The British people will soon find they have been misled. 

On the radio on 29 March 2017, another "independence day" for rejoicing Brexiteers, former SNP leader Alex Salmond and former Ukip leader Nigel Farage battled hard over the ramifications of Brexit. Here are two people who could be responsible for the break-up of the United Kingdom. Farage said it was a day we were getting our country back.

Yet let alone getting our country back, we could be losing our country. And what is so frustrating is that not only have we always had our country by being part of the European Union, but we have had the best of both worlds.

It is Philip Hammond who said: “We cannot cherry pick, we cannot have our cake and eat it too”. The irony is that we have had our cake and eaten it, too.

We are not in Schengen, we are not in the euro and we make the laws that affect our daily lives in Westminster – not in Europe – be it our taxes, be it our planning laws, be it business rates, be it tax credits, be it benefits or welfare, be it healthcare. We measure our roads in miles because we choose to and we pour our beer in pints because we choose to. We have not been part of any move towards further integration and an EU super-state, let alone the EU army.

Since the formation of the EU, Britain has had the highest cumulative GDP growth of any country in the EU – 62 per cent, compared with Germany at 35 per cent. We have done well out of being part of the EU. What we have embarked on in the form of Brexit is utter folly.

The triggering of Article 50 now is a self-imposed deadline by the Prime Minister for purely political reasons. She wants to fix the two-year process to end by March 2019 well in time to go into the election in 2020, with the negotiations completed.

There is nothing more or less to this timing. People need to wake up to this. Why else would she trigger Article 50 before the French and German elections, when we know Europe’s attention will be elsewhere?

We are going to waste six months of those two years, all because Prime Minister Theresa May hopes the negotiations are complete before her term comes to an end. I can guarantee that the British people will soon become aware of this plot. The Emperor has no clothes.

Reading through the letter that has been delivered to the EU and listening to the Prime Minister’s statement in Parliament today amounted to reading and listening to pure platitudes and, quite frankly, hot air. It recalls the meaningless phrase, "Brexit means Brexit".

What the letter and the statement very clearly outlined is how complex the negotiations are going to be over the next two years. In fact, they admit that it is unlikely that they are going to be able to conclude negotiations within the two-year period set aside.

That is not the only way in which the British people have been misled. The Conservative party manifesto clearly stated that staying in the single market was a priority. Now the Prime Minister has very clearly stated in her Lancaster House speech, and in Parliament on 29 March that we are not going to be staying in the single market.

Had the British people been told this by the Leave campaign, I can guarantee many people would not have voted to leave.

Had British businesses been consulted, British businesses unanimously – small, medium and large – would have said they appreciate and benefit from the single market, the free movement of goods and services, the movement of people, the three million people from the EU that work in the UK, who we need. We have an unemployment rate of under 5 per cent – what would we do without these 3m people?

Furthermore, this country is one of the leaders in the world in financial services, which benefits from being able to operate freely in the European Union and our businesses benefit from that as a result. We benefit from exporting, tariff-free, to every EU country. That is now in jeopardy as well.

The Prime Minister’s letter to the EU talks with bravado about our demands for a fair negotiation, when we in Britain are in the very weakest position to negotiate. We are just one country up against 27 countries, the European Commission and the European Council and the European Parliament. India, the US and the rest of the world do not want us to leave the European Union.

The Prime Minister’s letter of notice already talks of transitional deals beyond the two years. No country, no business and no economy likes uncertainty for such a prolonged period. This letter not just prolongs but accentuates the uncertainty that the UK is going to face in the coming years.

Britain is one of the three largest recipients of inward investment in the world and our economy depends on inward investment. Since the referendum, the pound has fallen 20 per cent. That is a clear signal from the world, saying, "We do not like this uncertainty and we do not like Brexit."

Though the Prime Minister said there is it no turning back, if we come to our senses we will not leave the EU. Article 50 is revocable. At any time from today we can decide we want to stay on.

That is for the benefit of the British economy, for keeping the United Kingdom "United", and for Europe as a whole – let alone the global economy.

Lord Bilimoria is the founder and chairman of Cobra Beer, Chancellor of the University of Birmingham and the founding Chairman of the UK-India Business Council.