The Lords have dealt a hammer blow to the government’s plans for tax credits and the next round of budget cuts. The revolt by a mix of opposition peers, crossbenchers, bishops and government loyalists is forcing the government into a rethink on a flagship policy and has thrown the Chancellor’s deficit reducing plans badly off course.
But is the rebellion merely a one-off move? Will it force a reluctant Chancellor into an embarrassing U-turn, but end there, leaving the government with a free ride for the rest of its social programme? Or is it the start of a wider momentum against the full force of the government’s social plans. Could this be the beginning of a more significant turning point, the end of public and political acquiescence with the government overall social strategy?
The government must have hoped that it would be able to get away with a continuation of the post-2010 programme of austerity, with cuts in welfare spending and in benefits and its long term goal to shrink the state.
The planned cuts to tax credits are just one tiny plank in a long list of welfare and tax measures that, together, will have a devastating impact on the incomes and life chances of the poorest in society. In the highly controversial Welfare Reform and Work Bill alone, there’s the plan to scrap the Child Poverty Act – with its targets, duties and commitments on reducing poverty and supported by the Conservatives in 2010 – as well as the lowering of the benefit cap, a four-year freeze on most working-age benefits and a two-child limit for tax credits.
Central to these wider plans is the proposal to abolish the official definition of poverty and replace it with measures that will, at a stroke, reduce the official poverty count. There’s also the promise to extend the right to buy to housing association tenants, one the National Housing Federation has been bullied into accepting, and the new measures to weaken an already disempowered trade union movement. Then, at the other end of the scale, inheritance and corporation taxes are to be cut still further, while executive earnings are continuing to race away from the rest of the workforce. The impact of this mix of measures is clear – they will allow the ceiling to go on rising and the floor to continue to sink.
The government likes to tell us otherwise. Michael Gove calls on the Tories to become the “warriors for the dispossessed”. David Cameron tells the Conservative conference that he plans an “all-out assault on poverty”. The reality is quite different. What the government is planning is not a war on poverty but on the poor.
Until the Lords rebellion, the government seemed to be getting away with this political doublespeak. The public, softened up by the government’s ongoing propaganda war against the welfare and benefit system, and years of myth-making, have for the most part gone along with the government’s wider austerity strategy. But could the tide now be about to turn? Could their Lordships have triggered a wider protest? In the 1980s Mrs Thatcher banned her minsters and civil servants from using the poverty word. Cameron is trying too to wipe the poor out of the political script by redefining them away. Real levels of poverty may go on rising, and the think tanks and campaigners may bleat, but official figures will show them falling. The government may yet wriggle out of the tax credit crisis, but they could yet be in for a much bumpier ride than their election victory suggested.