Economy//

It’s time for Nick Clegg to stand up for fairness

Written by: Gareth Epps on 21 November, 2012
Filed under Economy, Work and Welfare

The debate around George Osborne’s Autumn Statement has barely begun to gather momentum, with the announcement a mere three weeks away. This is all the more surprising given the knowledge, since March, that the Coalition remains some £10bn short of its deficit reduction targets, even after adjustment; the Conservatives’ stated aim of recouping the shortfall principally through cuts in welfare spending on one hand; and the declared opposition (in various forms) of Nick Clegg and the Liberal Democrats’ Autumn Conference to the Tories’ proposals, and David Cameron to the Lib Dems’ alternative medicine of wealth taxes and end to ‘perks for rich pensioners’ on the other.

With negotiators noticeably tighter-lipped than in the run-up to the Budget, with good reason, but a steady leak of new cuts to support for the vulnerable printed by the day, a political game of ‘chicken’ is taking place.

In the sights principally are two vulnerable groups, both of whom Lib Dems should be helping and protecting. The first are vulnerable under-25s currently receiving housing benefit, who David Cameron thinks can move back in with Mummy and Daddy, not understanding that this is not always possible, nor that the consequences would include increased homelessness and increased possibility of abuse of the most vulnerable (similar issues saw a welcome intervention from Sarah Teather last weekend on the effects of the benefits cap in inner London). The second group are families with more than two children, who reportedly face a cap on their benefits; while it could be reasonable for any Government to set a limit on benefit levels for children as yet unborn, to do so for existing families would increase child poverty in favour of targeting a small number of hard cases that make Daily Mail headlines. Whereas hard cases make bad law, to do so in a way that affects children regardless of changes in family circumstances would be spectacularly regressive.

Another mooted option is a benefits freeze affecting some of the most vulnerable people of working age: a generalised attack that would also reduce the amount of money in the economy, with a negative effect on the economy, potentially prolonging the recession.

Liberal Democrats, who have already rejected such proposals, have limited tolerance for Conservatives who are increasingly ignoring the Coalition Agreement they signed up to. Retoxified already, a Conservative Party specifically targeting the most vulnerable as the scapegoats for deficit reduction is not a brand with which progressives should want to be associated. With Cameron having rejected numerous forms of wealth taxation and backed the one widely accepted cut that could be made to the welfare budget, the Tories are opting for brinkmanship.

Some red lines have been drawn. Danny Alexander in his Conference speech specifically ruled put across-the-board welfare cuts: “A two-year freeze in benefits, which would freeze the incomes of the poorest people in this country, is not a place we should be looking at,” he says. This was mirrored by Cameron ruling out removal of ‘perks’ for well-off pensioners such as the free TV license.

However, this is now about politicians doing what they say they will do. In the Lib Dems’ case, this is about delivering fairness in a time of austerity. In September, Nick Clegg was unequivocal in his opposition to the books being balanced on the backs of the poorest. While scope for negotiation has been given by Clegg’s refusal to rule out further welfare cuts, reports are not bearing out that the Autumn Statement will deliver as promised. For Liberal Democrats chastened by last week’s election results and desperate to avoid further damage to the brand, this is significant; it is now time for Lib Dems in Government to put the boot onto the other foot and rule out unpalatable, regressive cuts.

The progressive social liberal majority in the party, as demonstrated in the results of party elections earlier this month, is watching particularly closely.