Polls show support for George Osborne’s 1 per cent cap on benefits

By Peter Hoskin
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Oh look, the Welfare Uprating Bill is published today. That’s the Bill which formalises the Government’s plan to increase many benefits by only 1 per cent a year, rather than by the rate of inflation. It’s the Bill which has given us what will surely be one of the defining dividing lines of this Parliament, as well as of the next election.

Which probably helps explain why today’s papers feature not one but two polls examining the Bill’s provisions. Let’s start with the more eye-catching of the pair.

The Populus poll commissioned by the Conservatives, and written up in the Sun, is wholly encouraging for the Government. The tenor of it is captured by its opening question. Respondents are asked to say which of two propositions is closer to their own views. The first is broadly the Tories’ approach:

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Osborne throws the kitchen sink at Balls... and Balls throws it back at Osborne

By Paul Goodman
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Tony Blair and Gordon Brown committed their party to Conservative spending plans when they fought the 1997 election.  Their shrinking of the target at which their enemies could fire set the tone for the next 20 years, followed as it was by one of biggest landslide victories in British history. Voters, the orthodoxy held, are always fearful that Labour, once translated from opposition to Government, will raise taxes more than a Tory Government; and the Conservatives (once the same translation has happened) will cut spending more than a Labour Government.

It admittedly took the Conservative leadership a very long time to mimic New Labour's position.  Neither William Hague in 2001 nor Michael Howard in 2005 did so - which offered opportunities to Tory modernisers to turn their volume up.  David Cameron's leadership gave George Osborne, convinced after 2005 that a James Review type-plan on savings was too complicated to sell to voters, the chance they were looking for.  The Shadow Chancellor, having junked much of his early enthusiasm for flatter taxes and parked the conclusions of Lord Forsyth's Tax Reform Commission, prepared himself to mirror Labour's spending plans.

But then the world changed.

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CCHQ launches attack ad in marginal constituencies contrasting "hardworking families" with "people who don't work"

By Matthew Barrett
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After PMQs on Wednesday, Labour launched a campaign, the price of Tory failure, which attacks the Government's welfare policies. The idea is to target 60 marginal Tory seats where the number of families receiving in-work tax credits is greater than the MP's majority.

CCHQ have responded with a hard-hitting campaign in the same 60 seats. In targeted online media, banner ads contrasting "hardworking families" and "people who don't work", illustrated by a man sitting at home on his sofa, will be displayed on local media websites. This echoes one of the most successful policies of the Coalition - the welfare cap.

The first ad can be seen here, and the second ad (pictured right) here. The ads lead to a survey on the Conservative website - "Who do you think the government should be giving help to?".

Grant Shapps has often spoken about his use of surveys and petitions to drive up Conservative support in his Welwyn Hatfield constituency. Now as the Chairman of the Conservative Party, Shapps is using the same method to collect email addresses, communicate with respondents, and spread the Conservative message.

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Benefits cut an important dividing line through PMQs

By Peter Hoskin
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First of all, today’s PMQs was an extremely rowdy and red-faced affair — even more so than usual. Questions had to be shouted over the din. Ed Miliband called David Cameron “the boy from the Bullingdon Club”, to cheers from his own side. Mr Cameron suggested that the Labour leader had caught Ed Balls’s disease of “not being able to keep his mouth shut for five seconds”, to cheers from his. Mr Balls kept on waving a piece in the Prime Minister’s face. And so on.

But this doesn’t mean that the session was all heat, no light. To the contrary, what we saw was an argument that will, most likely, be one of the most significant of this Parliament and of the next election campaign. That argument was over benefits.

Mr Miliband set it up with his second question: how many of the people affected by last week’s cap on rising benefit spending are actually in work? His aim was to wheedle out of the Prime Minister an admission that the policy wouldn’t just hit the unemployed but also those “strivers,” as he called them, on in-work benefits. He strengthened that implied message with some forceful rhetoric (“It’s the cleaner who is cleaning the Chancellor’s office while the Chancellor’s curtains are still drawn”) and a chart from the Institute for Fiscal Studies suggesting that working families are now £534 a year worse off.

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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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A 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.

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The Sunday papers offer Autumn Statement hints: a small benefits increase, a raid on wealthy pensions and more fracking

By Matthew Barrett
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1pm update: On the Andrew Marr programme this morning, George Osborne said:

"I’m very clear going forward we’ve got to deal with this deficit, it is going to take longer – that means more difficult decisions and it’s got to be done fairly, and that means yes, the richest need to bear their fair share – and they will. That means more than they’re paying at the moment. There’s not going to be a mansion tax – we made that clear – you’ll just have to wait and see, wait until Wednesday. But there is another conception of fairness – there is the fairness for the individual who goes out to work and the next-door neighbour is living a life on benefits, and it is also unfair for that individual. So we are also going to tackle welfare bills, and that is the Conservative approach to fairness – make the rich pay, but also make sure you’re tackling welfare, the welfare system which is deeply unfair for working people"

***

George Osborne's Autumn Statement, which will be presented to the House next week, gets plenty of previews in the Sunday newspapers. If the various reports are to be believed, there is a fairly coherent story of the Lib Dems blocking any significant welfare reductions, and insisting on some form of anti-rich measures. I have pulled together the various stories below.

In the first story, the Sunday Times (£) tells us that George Osborne has agreed a new "raid" on higher earners with the Lib Dems. The "raid" will consist of lowering from £50,000 the amount people can pay into their pensions each year with tax relief. Mr Osborne could reduce the figure to £40,000 or even £30,000, saving £600m or £1.8bn respectively. This would, the Sunday Times suggests, buy Mr Osborne the political goodwill from the Lib Dems to tackle the welfare bill.

However, the Mail on Sunday contradicts this, saying that the welfare bill will continue to rise after Vince Cable blocked any reduction in benefits spending. Whereas the Chancellor - and Iain Duncan Smith - had wanted a freeze, the paper says, the Lib Dems will force a 1% increase in spending. This would "save" only £2bn, as opposed to the £4bn the Chancellor wanted. It compares to a 5% increase last year.

The MoS also reports that Nick Clegg decided to insist on the welfare increase as payback for David Cameron not agreeing to a mansion tax. The Chancellor had been in favour of some "watered-down" form of a mansion tax, but the Prime Minister was sensitive to the fact the tax would hit natural Tory supporters the hardest, and would not consent to it. Further welfare news comes from the Observer, which reports that Mr Osborne has dropped his plan to withdraw housing benefit from under-25s, again thanks to a Lib Dem revolt.

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It’s too early to judge the Work Programme, but it isn't too early to worry

By Peter Hoskin
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Has the Government’s Work Programme failed? Well, today’s numbers from the DWP certainly don’t look good. They show that of the 743,870 people who were processed through the scheme in its first twelve months, only 18,270 managed to clock up six months of work. That’s a paltry 2.5 per cent.

And it gets worse: for the main group of jobseekers*, the equivalent figure was 2.2 per cent. That compares to the Government’s “minimum performance level” of 5.5 per cent. All this is rather a blow for Iain Duncan Smith and his team.

But before everyone rushes to condemn the Work Programme to death, it’s worth pointing out some quiet truths:

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George Osborne is refusing to add to overall tax burden in Autumn Statement but may change balance between richer and poorer Britons

By Tim Montgomerie
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The Times has an important report (£) this morning suggesting that Iain Duncan Smith and George Osborne are close to a deal that will make a significant contribution to the £10 billion of further savings from the welfare budget that the Chancellor wants to achieve by 2017. Many benefits paid to people of working age will be frozen in money terms for two years - equalling a cut of about 2.2% in real terms. The savings will be justified as not only necessary for deficit reduction but also to help ensure there is a real gap between a life on benefits and a life in work. Last year's big increase in benefits at a time of stagnant wages upset the Welfare Secretary, who is determined to increase incentives to leave benefits and take up work. If a freeze does go ahead senior citizens will not be affected as they are protected by the Coalition's 'triple pensions lock'.

The fear in Tory circles is that this IDS/ Osborne deal will be blocked by the Liberal Democrats if the Chancellor doesn't also use his Autumn Statement to raise taxes on the wealthy. Although George Osborne has ruled out a mansion tax he has not ruled out higher council tax bands on high value properties. A majority of Tory members in the latest ConHome survey said that such a move would be acceptable to them. The Communities Secretary Eric Pickles is not so keen, however, and is thought to be resisting the move.

What the Autumn Statement will NOT involve, according to ConHome sources, is a net increase in taxes. Mr Osborne has long vowed to cut the deficit by the OECD's recommended 80/20 ratio - 80% spending cuts and 20% tax rises. The deficit reduction package is now at or close to that ratio and the Chancellor is not willing to accede to some Lib Dem backbenchers who want a higher proportion of the deficit reduction burden to fall on taxpayers. Mr Osborne believes that increases in VAT, NI, CGT and extra levies on the banking sector are enough and extra taxes could damage the recovery.

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Is David Cameron coming round to the idea of further universal benefit cuts?

By Peter Hoskin
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Flicking through this morning’s papers, it's clearer that the government is being pressured from two directions over child benefit. There are those regard the cuts for higher income earners as a “penalty on aspiration”, and who might be emboldened by reports that the policy could run into legal difficulties. And there are those who see the cuts as little more than a start — as I wrote yesterday, and as Rachel Sylvester also suggests in today’s Times (£) — to be built on by reductions in other universal benefits.

So which way, if any, is the government likely to budge? Judging by the polling and supporting quotes pushed out by the Treasury yesterday, it will take a lot to get George Osborne to drop the policy — and I expect that goes doubly so now that explanatory letters have been dispatched to those who will be affected. But, as we know, the government is also reluctant to move against other universal benefits. So most signs point to them ploughing on as is, on the difficult middle ground.

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The Government is fighting for child benefit cuts — so why is it leaving other universal benefits alone?

By Peter Hoskin
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Politics by polling; we’ve seen a fair amount of it recently. First, the Conservatives commissioned a Populus opinion poll into Ed Miliband’s prime ministerial qualities (or his lack of them) on the eve of the Labour conference. And today they — or perhaps, more specifically, George Osborne — have used that same polling company to back up the Government’s policy on child benefit for higher earners.

I haven’t seen the specific questions asked by that poll yet — which should always be an important consideration in these matters — but the results are still quite striking. Apparently, 82 per cent of respondents support the Government’s plan to withdraw child benefit from higher income earners. And that includes 74 per cent of those households earning over £69,000. As a result, Treasury spokespeople are spread all across the papers this morning. “In a period when the government is having to reduce welfare spending, it is very difficult to justify continuing to pay for the child benefit of the wealthiest 15 per cent of families in society,” says one to the FT.

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