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Osborne’s ‘trap’ of forcing vote on cutting benefits should be turned against him

Today, what Osborne prided himself was a smart move will be launched to put Labour on the back foot by challenging it to vote against his bill cutting benefits and tax credits by 4% in real terms over the next 3 years and thus be portrayed as the scroungers’ friend. He misjudged.

Labour will rightly vote against the bill which is deeply unfair, but it has also given the party a perfect opportunity to argue the profound injustice of making the poorest sections of the population bear the overwhelming burden of cutting the deficit caused by the bankers’ recklessness whilst the rich who did cause it get off virtually scot-free. And Labour has also devised an alternative proposal to rebut any charge that it’s soft on the workshy.

This proposal is a variant on a DWP scheme which is aimed to get the long-term unemployed claiming JSA for more than 2 years back to work. Either they should accept 6 months’ intensive support from a dedicated Jobcentre Plus adviser, or they should take a place on a community action programme involving work for 30 hours a week for 6 months.

Labour is proposing that all persons over 25 who have been without a job for at least 2 years (about 130,000 persons) should be required to take up a government-provided job for 6 months or lose benefits (for 3 months after the first refusal and for 6 months after the second). The £1bn cost of subsidising these jobs would be paid for by cutting the tax relief on pension contributions from 45% to 20% for those earning over £3,000 a week.   This scheme would supplement the already announced new jobs fund programme offering work to 18-24 year olds unemployed for at least a year, to be funded by a tax on bankers’ bonuses.

Labour’s scheme not only offers an effective political rebuttal to the mischievous propaganda of Osborne and IDS, but points to a much better way of resolving the deficit – by reducing benefit expenditure and providing opportunities for work. Some might think the 3-6 month suspension of benefits unduly draconian, but the scheme should allow for suitability of the work, intensive support where necessary to assist the return to work, and some training to ensure that participants are not permanently stuck in dead-end jobs.

The Tory plan however falls foul on at least two counts: two-thirds of those on tax credits are in work already, and cutting both benefits and tax credits undermines aggregate demand which the economy needs now like a hole in the head.

But the real case against Osborne is that the super-rich should be made to pay, not the poor. The poor are being hit not only bu 4% real terms benefit cuts, but also by severe cuts in housing benefit, disability cuts, council tax benefit cuts, and the VAT increase to 20%. The super-rich by contrast have been protected by Osborne from bearing any responsibility whatsoever and have even been cosseted by a 5% income tax cut – despite having made huge wealth gains since the crash in 2008-9 (£155bn for the richest thousand persons in the UK according to the Sunday Times).

5 Comments

  1. T says:

    Osborne’s vote is certainly a political trap. But you seem to have missed the point that so is Labour’s Jobs Guarantee – that is, it’s meant to suggest to the media that Labour can “act tough” (read – “demonise claimants”) on welfare too. This is simply saying that Labour agrees with the Tories that it’s “scrounging” that’s the problem, and toughness the solution, rather than a global financial crisis that’s the problem and a significant wealth redistribution the solution. Labour should be challenging the Tory narrative by attacking right-wing welfare myths, some of which you repeat here, and establishing a new line of attack against the real villains of the piece: the super-rich who as you rightly suggest should pay for the crisis they caused.

  2. treborc says:

    Well of course Miliband is more or less just trying to win, he used the work shy rhetoric himself even with his speech about the disabled.

    It’s a game and the game is to try and kick those at the bottom.

    Hitler does not seem to bad these days does he.

  3. David Ellis says:

    Many have pondered why this recession hasn’t been accompanied by mass unemployment. The reason is tax credits. Wages are hugely subsidised by tax credits. Osborne’s plans to de-value tax credits with well below inflation rises should finally see the return of mass unemployment as intended.

  4. treborc says:

    2.4 million is the unemployed figure, but I suspect it’s a lot higher then that, Thatcher and Blair worked well with a pen and rubber to lower the true figures.

  5. Matty says:

    T seems to have missed the point that the Blairite wing of the party has been arguing that Labour shouldn’t even vote against this Tory bill. An argument that to his credit Ed Miliband has rejected.

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