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8 November 2018

The Tory revolt against the benefits freeze shows austerity is still a problem for May

Having ended cuts in some areas, it is harder for the government to maintain them elsewhere.

By George Eaton

When Philip Hammond promised in last month’s Budget that “the era of austerity is coming to an end”, there were some conspicuous exceptions. Unprotected areas, such as local government, prisons and transport, will still endure spending cuts. And the benefits freeze, which ensures working-age welfare payments do not rise in line with inflation (costing some households more than £200 a year), will remain.

The Budget, however, was well-received by the media and Conservative MPs, who largely accepted the government’s insistence that austerity was over. Indeed, the main political split was on the Labour side over the party’s stance on tax cuts for high-earners.

But today’s Times reveals details of a belated revolt against the benefit freeze. Five former cabinet ministers – David Davis, Justine Greening, Nicky Morgan, David Willetts and Iain Duncan Smith – have condemned the policy, as have select committee chairs including Sarah Wollaston (health) and Tom Tugendhat (foreign affairs).

Davis declares that the policy is “in contradiction to the basic Tory notion of having a robust safety net and an effective ladder out of poverty”. Morgan says: “There are now increases in public sector pay and there should be a link between benefits and wages. We always have to be wary as a party of being seen to know the cost of everything and the value of nothing.”

And backbencher Heidi Allen, a frequent critic of welfare cuts, warns: “The benefit freeze has gone on for too long; it does not make logical or moral sense to say that everybody else’s cost of living is increasing but people on benefits – often in work that their cost of living isn’t increasing.

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“You can’t give with one hand on work allowances and take with the other on the benefits freeze. Public sector pay has increased, wages are going up but the people who are left behind are those with the least financial resilience.”

Having ended austerity in some areas, it is now harder for the government to justify its maintenance elsewhere. Further revolts are likely when next year’s Spending Review reveals the scale of cuts to unprotected departments (though one might note that not one Tory MP thought it worth voting against the Budget). 

Labour, which did not pledge to end the benefits freeze in its 2017 manifesto, last week finally confirmed that it would increase welfare payments in line with inflation (after initially failing to do so at a post-PMQs briefing). Had the party not shifted its stance it would have endured the unusual sight of being outflanked from the left by Tory MPs.