UK Chancellor's Autumn Statement

Few of the measures announced in the UK Chancellor’s Autumn Statement were of genuine surprise to observers. George Osborne had made clear his wish to cut Corporation Tax, for example, to 20% by 2015, and so this year’s 1% reduction was certain to happen.
However, rumours circulated in the British press a few weeks ago that the Conservative Party wanted to freeze all social security benefits in cash terms- but this had been vetoed by the Coalition partners the Liberal Democrats, whose leader had declared that he would block benefits cuts unless the well-off had to pay a Mansion Tax. The Chancellor manoeuvred around this by implementing a 1% cash rise in benefits, well below the rate of inflation, and saying that this 1% rise would be in place for three years. Benefits for the disabled and the elderly will be excluded from the real-terms cut.

The move will require legislation, as previously benefits have had a statutory annual increase in line with inflation- expected to be 2.5% this year. This is where the Chancellor has openly set a political “elephant trap” for the Labour Party. The Conservatives are likely to accuse Labour of defending “scroungers” and the “workshy” from austerity that everybody else is suffering. Of late, such rhetoric has become dangerously prevalent in the media, and seemingly public opinion. Many on the Blairite wing of Labour have urged Ed Miliband to support the cuts.

A coalition of 59 charities, including Oxfam, the Child Poverty Action Group and Disability Rights UK has warned that the move will increase poverty, especially for families as it is the under 18s and the over 65s who depend on the welfare state the most. It is a view that Ed Miliband has announced that he shares. The Shadow Chancellor also points out that the majority of benefit claimants who will be hurt by the changes are actually in work, on the Minimum Wage and are likely to be parents. It does indeed seem unacceptable to be cutting the incomes of the hard-working poor at the same time that tax cuts worth tens of thousands of pounds are being given to millionaires.

The make-up of Parliament means that, as the Liberal Democrats are likely to support benefits cuts they’ve expressed strong disapproval of (in the same way that they voted for tuition fees) the benefits cuts will pass. But the way Labour votes will be important regardless of its effect on legislation. Many on the Left of the political spectrum are no doubt delighted at Miliband’s display of principle in standing up for the poor. The big question, as it all too often is, is: who will win the centre ground?

Populist benefits bashing has been highly popular of late, but how long can the demonisation of the poor continue? The blackmailing of claimants of the £71-per-week Job Seeker’s Allowance in the flagship Welfare To Work programme has turned out to be a £5 billion failure, with rates of those finding work lower than if the Government had did nothing. Then there is the matter of firms like Atos and A4E who have been paid to assess disability benefit claims. Aside from the large number of terminal cancer patients who have had their benefits cut-off, or the wheelchair bound claimant who was abandoned in an Atos centre when the fire alarm went off, and the multiple suicidal claimants who made further attempts after being informed that their benefits were being cut off (against strict Department for Work and Pensions guidelines), there are major injustices that have been created in our social security system.
So will the electorate approve of penalising those who have not spited the Government by having the misfortune to be disabled or unemployed? It sounds like it will be a matter of who can shout the loudest; George Osborne and the right-wing press or Ed Miliband, Oxfam and Save the Children. The latter group would be well advised to emphasise that £18 billion has already been slashed from the social security net, and that the working poor who would be hurt by the cuts would not have a problem if they were being paid a livable wage in the first place. For the sake of compassion and social justice, many are hoping that this marks a turning point in the debate on welfare and that Ed Miliband’s political gamble pays off.

BY: Jack Darrant