David Cameron and George Osborne speak in Crewe during the general election campaign. Photograph: Getty Images.
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Do the Tories have a plan to soften the blow from welfare cuts?

The adoption of living wage contracts is one way that the party could reduce the damage from cuts to tax credits. 

The Conservatives have many welfare cuts to make but few ways in which to do so. Before the election, David Cameron vowed to maintain the "triple lock" on the state pension (so that it rises by the rate of inflation, average earnings or 2.5 per cent, whichever is highest) and ruled out cuts to universal pensioner benefits, such as Winter Fuel Payments and free bus passes. Under pressure from Labour, he later added child benefit to the list of no-go areas. If they are to meet their target of cutting welfare by £12bn by 2017-18, this leaves the Tories with £10.5bn of reductions to make from just £125bn of the welfare budget (the protected payments amount to £95bn). The cuts announced so far - a two-year freeze in working-age benefits, the reduction of the benefit cap from £26,000 to £23,000 and the removal of housing benefit from 18-21-year-olds - amount to just £1.5bn. 

When challenged during the campaign on how they would find £12bn of savings, Tory ministers pointed to the £21bn of reductions they made in the last parliament. But this makes the reverse of the point they intend. Any low-hanging fruit have already been plucked: there are no easy cuts left to make. Most Conservatives expect to fall short of the £12bn target they have set themselves (many had assumed that the Lib Dems would force them to do so). But significant savings will still need to be achieved if George Osborne is to meet his aim of eliminating the structural current deficit by 2017-18. 

The most obvious place for the axe to fall is tax credits. They are the largest of the unprotected areas (accounting for £30bn) and have long been regarded by the Tories as emblematic of Labour's statist meddling. Ahead of Osborne's emergency Budget on 8 July, the party is reportedly considering saving £5bn by returning tax credits to their 2003/04 levels in real-terms. For 3.7 million low-income families, the IFS estimates, that would mean the loss of £1,400 a year. For the Tories, who have repeatedly framed themselves as the "workers' party" since the election, this is a political headache. While supporting some welfare cuts, such as a reduced benefit cap, Labour plans to oppose measures that hit the working poor. Further increases in the personal tax allowance (which is due to reach £12,500 by 2020) and low inflation will help to ease some of the pain.  But without a dramatic increase in wages, voters will be left substantially worse off.

An increasing number on the left denounce tax credits as an inefficient subsidy to corporate cheapskates. They call for the introduction of a statutory living wage to relieve the burden on the state. But while some Tories occasionally flirt with the idea, no one expects the party to support a measure that all forecasts suggest would cost jobs. If they are smart, however, the Conservatives will look to the Labour manifesto for inspiration. Before the election, the party proposed the introduction of "make work pay" contracts, which would provide a tax rebate to those companies that sign up to become living wage employers. For every £1 that employers pay to raise salaries to living wage-level, the Treasury saves 49p. Under Labour's plan, the chunk of this accounted for by higher tax revenues (32p) would have been paid back to firms that signed up, while the Exchequer banked the remainder 

The adoption of this policy would provide the Tories with some political cover as they again cut tax credits. Through acts such as capping payday loan charges and banning exclusive zero-hours contracts, they have shown themselves prepared to make selective interventions. As they face the prospect of damaging their nascent "one nation" brand, here is a chance for them to do so again. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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