George Osborne during a visit to the Royal Mint earlier today in Llantrisant, Wales. Photograph: Getty Images.
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Will George Osborne's welfare cap stand the test of time?

Self-conscious attempts by one government to constrain the hands of their successors rarely work.

George Osborne's welfare cap will be voted on tomorrow. It's viewed by many as a moment of reckoning for Labour in which it will be caught in a deadly trap: support eye-wateringly tight and binding proposals that threaten the future of the welfare state or oppose them and stand exposed as the believers in big welfare spending that their critics allege.

It’s not only supposed to be a tricky tactical test but it’s also billed as a strategically important piece of policy that will make it more likely that any future government will have to back the choices being made by the current one. Which, depending on your political point of view, is why it’s lauded as a "potentially momentous punctuation mark" in Britain’s attachment to overblown welfare spending or a grave threat to what remains of social security. Both friend and foe of the proposal concur that it will cast a long shadow.

Or perhaps not. Leaving the parliamentary theatre to one side, self-conscious attempts by one government to constrain the hands of their successors rarely work. They tend to generate much media and parliamentary excitement at the time but leave relatively little historical mark.

The last Labour government also attempted this via legislation in 2009 that was supposed to enshrine a legal duty on the Secretary of State for Welfare to abolish child poverty by 2020. There were no caveats or get-outs and it paved the way, or so it was thought, for judicial reviews to be mounted against a non-compliant government. There were a panoply of reporting requirements, legal duties and new bodies like the Child Poverty Commission to give life to the ambition.    

Yet the world didn’t really change. Even the tactical challenge didn’t work: the parliamentary vote turned out to be quite useful for the then Conservative opposition (the Labour leadership may end up feeling the same about this week’s vote).  Five years on and it’s safe to say that Ian Duncan Smith doesn't wake up in the morning worrying about the provisions of Labour's law. The 2020 child poverty objectives are going to be missed by a country mile. The legislation didn't lock in anything.

In some respects, this week’s vote is less meaningful. For a start, the coalition’s fiscal mandate, of which the new welfare cap is part, automatically dissolves at the end of this Parliament. It will be replaced by whatever new fiscal arrangements that the government of the day selects.  The opportunities for adjusting the cap are many – this could be done in a low-key way by simply changing the very tight forecast margin that is built into the numbers or more overtly by shifting which benefits fall inside it, or the time period over which it applies.

More fundamentally, any government that wanted to undertake policy changes to cut spending on social security is likely to do so with or without the cap. And if they wanted to let spending rise by more than the cap would permit, they would also be able to do so (and if they can’t win a Commons vote on a budget related issue like this they won’t be in power for long). Nothing about its introduction alters the real choices on the underlying deficit: raise taxes, cut social security or public services by more than is already planned or have a larger deficit for longer.

Which isn’t to say that it is irrelevant. Like many of these devices, the welfare cap is effectively a self-embarrassment tool.  Its real effect is to make it more likely than would have otherwise been the case that higher than expected social security spending will get noticed and be debated. In a climate of widespread welfare-scepticism that could matter.

It’s also the case that if the government of the day wishes to use adherence to the cap as a public justification for making controversial policy measures then the design of it matters. And here it is noteworthy that the proposed cap sits uneasily with Universal Credit, the coalition’s flagship welfare reform that aims to seamlessely integrate a wide range of benefits. Most of these will fall inside the cap (mainly for the in-work) and some outside (mainly for the out of work such as Jobseeker's Allowance and housing benefit for the unemployed).  A rushed effort to bear down on covered areas of welfare spending – if the OBR reports at an Autumn Statement that there is likely to be an overshoot in spending it is supposed to result in policy changes in the following Budget – could change the shape of Universal Credit and very easily undermine work incentives.

There is another sense in which all this should, or at least could, in theory matter. For all the heat in the current welfare debate, there is relatively little light about the underlying causes of the trends in social security expenditure, and far less still on whether alternative policy choices would, or wouldn’t, affect them (a point Graeme Cook also makes). How much difference would a major boost to housing supply, or a steadily rising minimum wage over a Parliament, make to spending on tax credits and benefits? We don’t really know. Because it’s not anyone’s job in government to think hard about the interactions of policy choices and welfare spending, we have only a limited sense of what the real choices and trade-offs are. An improved process of thinking about social security (and other) spending including on costly tax-reliefs could help remedy this.

Amidst the Parliamentary antics this week, we should keep all this in proportion. When the next chapter of the history of the welfare state gets written, this week’s vote is unlikely to have a leading part.

This post originally appeared on the Resolution Foundation website

Gavin Kelly is chief executive of the Resolution Foundation 

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.