It’s been a long time coming, but the Tories never give up (if only we had the same determination and relentless drive!). First they broke the pension link with earnings – that was Thatcher’s opening gambit in 1979. Now 33 years later they’re breaking the benefits link with prices, even with the lower CPI index of prices, let alone the higher RPI measure.
Now that Osborne has so provocatively thrown down the gauntlet, Labour must make this the rallying point to link up with the charities, churches, voluntary groups, community organisations as well as Labour and trade union activists to fight this issue across the whole country. For this is the first time since the 1930s that the income of the poorest households will fall in real terms as a result of deliberate government policy.
It’s not as though the Welfare State has become bloated and over-generous as the Tory press constantly parrot. The facts tell a very different story. The single rate of social assitance in 1948 was equivalent to 18% of earnings; it is now 11%. Of the £53bn real terms rise in benefits expenditure, nearly half (£24bn) is accounted for by the rise in pensioner benefits.
The £10bn rise in housing benefitis explained by the abject and reprehensible failure to build affordable homes which drives up rents because supply cannot keep pace with demand. Similarly the £17bn spent on family benefits and tax credits is a despicable subsidy to scrounger employers who don’t pay their workers a living wage. Only £2bn is paid out in unemployment benefit, even though there are still over 2.5 million workless.
Then Cameron bangs on about the £5.2bn lost in benefit fraud (and of course anypersons who do engage in benefit fraud – or any other kind of fraud – should be firmly dealt with). But what he didn’t say was that £4.2bn is caused by government (DWP or Treasury) error, nor did he mention that tax fiddling is on a far bigger scale – £35bn last year according to HMRC, £228bn over the last 6 years.
Osborne is giving Labour an open goal to ram home the grotesque disparity in this government’s treatment of rich and poor. The 1% richest have had their 50p rate of tax cut at a cost to other taxpayers of £3bn, while at the other end of the scale an average family with 2 children will suffer a cumulative real-terms loss of £2,800 (£53 a week) by 2015-6.
At the top end the 1,000 richest persons in the UK, according to the Sunday Times, have gained a staggering £155bn in the 3 years since the crash while at the bottom end child poverty is set to rise sharply even though 60% of children in poverty live in working households.