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The benefits squeeze will cause real hardship to many families. It's a necessary measure in difficult times but no Tory should see it as a political ploy.

By Tim Montgomerie
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PhotoA YouGov poll for The Sunday Times (PDF) suggests that most people (52%) believe that the Government's decision to limit benefits to a 1% annual increase for the next three years is either the correct thing to do or is not tough enough:

  • 33% say it was "right that benefits should only be increased at 1% a year";
  • A tough-minded 19% say it was wrong, "benefits should not have been increased at all";
  • 35% say wrong, "benefits should have been increased in line with inflation or more".

According to James Forsyth George Osborne hopes to use the issue to drive a wedge between the Labour leadership and its heartland supporters. Tory strategists are said to believe that many working people greatly resent paying their taxes to people who live on the same estates as them and do not appear to make the effort to find work or acquire new skills.

Matthew d'Ancona strikes a wise note of caution, however, in his column for The Sunday Telegraph. Noting that nearly all of the reduction in the deficit up until this point has been delivered by cuts to capital spending or by increases in tax d'Ancona warns that "we have yet to see how the electorate responds to the sharper knives in the austerity canteen". He continues:

"Voters hate “scroungers” and benefit frauds. But many of them will also recoil from real-term cuts to benefits for those in work, and from the case studies of indigence that will quickly proliferate... Decency is the spine of the British character and all who are bold enough to address our broken welfare system should take care not to affront it. This is why the claim to “fairness” has been essential to Osborne’s strategy, and why cutting the 50p rate – though absolutely necessary – was such a politically difficult and internally controversial moment. It is a terrible error to confuse English individualism with a loathing of government assistance in all its forms (witness the reverence for the NHS) or an indifference to social injustice."

The case studies of "indigence" should worry Conservative and Liberal Democrat HQs. The BBC-Guardian media complex will serve them up to Britain on a regular basis. More people than ever are already accessing food banks and extortionate payday loan companies. Three years of below inflation rate increases in benefit at a time when certain prices - notably household energy bills - are rising fast will bring real difficult to many homes. It is a policy that, on balance, I think is right. We need to cut the deficit and we need to increase the gap between in-work and out-of-work income. But let's avoid any sense that this benefits squeeze is an exciting or masterful political ploy. Unlike the £26,000 welfare cap it's a harsh but necessary policy rather than one that is clearly and unambiguously fair. It is also, as Labour has pointed out, going to hurt some very low-waged workers because of the squeeze on certain credits. It's also harder to defend because the Coalition hasn't also asked wealthier pensioners or those living in expensive properties to help shoulder the deficit reduction task. We'll need to watch this policy carefully as it is implemented.


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