Labour is facing a watershed. After Osborne made clear in his Autumn Statement that because of his failed deficit-cutting plans he was determined to extract a further £10bn in welfare cuts in addition to the £18bn already imposed and that as part of this new attack on the poor he was upgrading welfare benefits by only 1% this next year (well below the 2.8% rate of inflation), Labour has to decide whether to oppose this and vote against the bill that Osborne’s bringing forward next month.
There should be no question about this, but hitherto Labour has not voted against the welfare cuts because the New Labour faction in the PLP has argued that it would be damaging to be seen siding with the ‘scroungers’ constantly demonised by Tory propaganda. The truth is the opposite, that it would be extremely damaging to Labour if it were not seen to be standing up for the millions now being victimised and viciously pilloried for no fault of their own.
Osborne’s so-called ‘trap’actually pushes Labour towards doing what it should have done readily a long time ago. First, take head-on the Tory vilification of the poor, the unemployed and the disabled. So far from being ‘feckless’ the overwhelming majority would leap at a job if only they could get one, but with 8 people on average chasing every vacancy (up to 20 in some places) it’s impossible to get one, aggravated further by Osborne’s own failed economic policies and the prolonged austerity he’s engineered.
Second, the majority of those claiming benefits (e.e. child tax credits) aren’t unemployed at all, they’re in work but paid so little they’re still entitled to some benefits. They’re ‘strivers’, not ‘shirkers’, so why punish them?
Third, before low-income families are penalised, make the super-rich pay their fair share.The Tories have done the reverse: they’ve just given 8,000 millionaires in the UK a gift of £107,500 (£2,067 a week) by repealing the 50p tax rate. And rather than attack the poor, why not demonise the ultra-rich who have hoarded of millions in tax havens and crack down hard on their tax dodging? That’s after all where the real money is.
Fourth, and most important of all, the right way to tackle the deficit isn’t by endless cutting which is actually self-defeating, it’s by getting growth going again, getting people off the dole and into work, and funding it either by a tranche of QE or by a capital gains tax levy on the enormous gains made by the mega-rich since the crash or by modest borrowings at the lowest interest rate for 300 years. If Osborne’s bill could precipitate a real public debate about an alternative economic strategy, we could really turn the tables on his political scheming.