Conservative cabinet ministers at the party's press conference at Millbank this afternoon. Photograph: Getty Images.
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The trap the Tories have set for Labour on cuts

Osborne's claim of a "blackhole" in Miliband's plans is forcing his party to shout louder about its commitment to continued austerity. 

The sight of five cabinet ministers (George Osborne, William Hague, Theresa May, Nicky Morgan and Sajid Javid) taking the stage at the Tories' first press conference of this election year was a rather odd one. As I noted on Twitter, it looked like a leadership hustings with Boris strangely absent, or the reformation of an aged pop group. But the quintet were all unambiguously singing from the same hymn sheet. The choice, we were repeatedly told, was between Tory "competence" and Labour "chaos", between sticking to "our long-term economic plan", or returning to "the mess" of 2010. 

The event was held to mark the launch of the Conservatives' attack dossier on the opposition's spending plans. The 82-page document (decked out in Budget red to lend it spurious authority) claimed to have uncovered a £20.7bn black hole in Labour's programme (alleging £23.26bn of spending commitments against £2.52bn of cuts/tax rises). But it quickly began to unravel under the mildest of scrutiny. As several journalists noted during the Q&A, the document falsely equates criticism of cuts with a commitment to reverse them. For instance, nowhere has Labour suggested that it will cancel £3.35bn of local authority cuts, or £83m of Arts Council funding reductions. 

But Javid, the Tories' attack dog of choice, had a ready response: "If Labour thinks that we're wrong in asserting this, then it's up to them to come out today and they can say 'We will not reverse those cuts.'" This the Labour press team promptly did, tweeting that "p.44 of Tory dossier says Labour will cancel cuts to the arts budget. We won't." The rapid rebuttal allows Labour to claim that its plans are fully costed and credible (as the IFS has said) but at the cost of reminding voters of its commitment to continued austerity. In short, "We didn't like the cuts, we attacked the cuts, but we're going to have to keep them." 

This frugal stance opens up political space for the SNP and the Greens, both having recently eaten into Labour's left-wing support. The dilemma that the party faces is between appearing less credible than it would like or more austere than it would like. At the briefing that followed, an Osborne aide declared satisfiedly: "If they want to pull out other examples and say 'That's not our policy' that is going to cause them massive problems." 

The Tories are not short of their own problems. When challenged on how they would pay for their promise of £7.2bn of tax cuts, Osborne merely asserted that his cuts were forecast to produce a surplus of £23bn. But having pledged in 2010 to all but eliminate the deficit and ended up only halving it (and even then only as a share of GDP), why should we take his word for it? Javid fared even worse on The World At One when he conceded that the Tories hadn't "spelt out" how they would afford the planned tax cuts. But their wager (and it may prove right) remains that their poll lead on economic credibility is so great as to allow them to play faster and looser than Labour. In the meantime, they can be reasonably satisfied with forcing the opposition onto the mine-laden pitch of austerity. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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Theresa May's U-Turn may have just traded one problem for another

The problems of the policy have been moved, not eradicated. 

That didn’t take long. Theresa May has U-Turned on her plan to make people personally liable for the costs of social care until they have just £100,000 worth of assets, including property, left.

As the average home is valued at £317,000, in practice, that meant that most property owners would have to remortgage their house in order to pay for the cost of their social care. That upwards of 75 per cent of baby boomers – the largest group in the UK, both in terms of raw numbers and their higher tendency to vote – own their homes made the proposal politically toxic.

(The political pain is more acute when you remember that, on the whole, the properties owned by the elderly are worth more than those owned by the young. Why? Because most first-time buyers purchase small flats and most retirees are in large family homes.)

The proposal would have meant that while people who in old age fall foul of long-term degenerative illnesses like Alzheimers would in practice face an inheritance tax threshold of £100,000, people who die suddenly would face one of £1m, ten times higher than that paid by those requiring longer-term care. Small wonder the proposal was swiftly dubbed a “dementia tax”.

The Conservatives are now proposing “an absolute limit on the amount people have to pay for their care costs”. The actual amount is TBD, and will be the subject of a consultation should the Tories win the election. May went further, laying out the following guarantees:

“We are proposing the right funding model for social care.  We will make sure nobody has to sell their family home to pay for care.  We will make sure there’s an absolute limit on what people need to pay. And you will never have to go below £100,000 of your savings, so you will always have something to pass on to your family.”

There are a couple of problems here. The proposed policy already had a cap of sorts –on the amount you were allowed to have left over from meeting your own care costs, ie, under £100,000. Although the system – effectively an inheritance tax by lottery – displeased practically everyone and spooked elderly voters, it was at least progressive, in that the lottery was paid by people with assets above £100,000.

Under the new proposal, the lottery remains in place – if you die quickly or don’t require expensive social care, you get to keep all your assets, large or small – but the losers are the poorest pensioners. (Put simply, if there is a cap on costs at £25,000, then people with assets below that in value will see them swallowed up, but people with assets above that value will have them protected.)  That is compounded still further if home-owners are allowed to retain their homes.

So it’s still a dementia tax – it’s just a regressive dementia tax.

It also means that the Conservatives have traded going into the election’s final weeks facing accusations that they will force people to sell their own homes for going into the election facing questions over what a “reasonable” cap on care costs is, and you don’t have to be very imaginative to see how that could cause them trouble.

They’ve U-Turned alright, but they may simply have swerved away from one collision into another.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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