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I wonder if my challenging student knows better than Osborne re benefit cuts

Posted on 5 October 2010 | 7:10am

As George Osborne was speaking to the Tory conference, I was heading for my second lesson with 20 youngsters who have gone through the education system without much success.

Their homework had been to come up with ideas for campaigns, things they wanted to change or fight for in the world around them.

Some of their ideas were unworkable. Some were obvious. Some were excellent. One was, potentially, brilliant. One was a straight-forward plea not to take away people’s benefits.

The good news for Mr Osborne is that a good few of the students had remembered from Lesson 1 who he was and what he did. The bad news is that they don’t trust him to deliver any change to benefits fairly. He shouldn’t take it personally. I’m not sure they would trust anyone to do it.

The girl who spoke in defence of her own mother’s benefits was one of four to make a short speech on the ideas that came forward, and she won the ‘best speech’ vote of her classmates on it. I also raised with her Osborne’s child benefit cut for high rate tax-payers and she immediately got the two sides of the argument, universality v the better off getting less.

She also got, as Osborne’s colleague Philip Hammond appeared to when he was ruling out child benefit cuts in the run-up to the election, that if they cut one, people start to worry what they cut next.

It is a big gamble by Osborne. The child benefit got the headlines because if affects more people, and they include the media who decide what gets reported. But if anything, the cap on benefits going into a single household could be more significant. To a nation constantly seeing headlines of families taking huge sums – which tend to be the exception but are portrayed as the norm – it would appear to be a no brainer. But once you wrap unemployment, housing and child benefit in a large family together, you reach Osborne’s max (small change to him) fairly quickly.

So the consequence will be to force those on high benefits further into the poorest areas, already the most challenged, with the highest rates of unemployment and deprvation.

Also absent from this debate is how the public sector cuts planned for later this month will impact on the benefits bill. It is so easy to talk of wiping out a quarter of a workforce. But where do they go? For many, onto the benefits bill Osborne has pledged to cut. Also absent is the impact of enormous cuts in infrastructure projects on the private sector. And again, what we saw from Osborne yesterday was a political strategy not a growth strategy.

He and David Cameron are banking on the economy coming good so they can say their cuts were in part responsible. They are hoping the public will at least part buy the argument they had to make them because of Labour’s mismanagement, and with the leadership election out of the way, Labour must do a far better job of explaining what nonsense that is. The Tories have had too easy a run on that. Instinctively the public know there were many international factors at play but the coalition do not miss a trick in putting all blame at Labour’s door, and Labour have been missing too many at pushing back.

Meanwhile, a warning from the classroom. The winning speaker warned that people might die as a result of major benefits cuts, as they would end up on the streets. Put down like that, it comes over as hyperbole. When she said it, it came over as a rather wise warning from someone who knows. And her classmates reacted in a way that suggests they may have a better instinctive feel on this than Mr O.

  • Patsy Malone

    Hammond was all over the place on newsnight. he was clear as you like during the election – no hit on univ benefits. Now saying he was speaking about means testing. Rubbish. All rubbish. I hate these people. Osborne came over as a smug, posh git who would not have a clue how some – indeed many – live their lives in this c ountry

  • Pauline McArdle

    Is your teaching a job job, or a tv programme? Sounds good whatever … I saw you on The Speaker and wrote at the time to suggest you should take up teaching. Is this my influence??

  • Mel Johnstone

    Not sure they have worked this out at all. I have no problem with the child benefit move. I would also take away eg free tv licences and winter fuel for richer pensioners. But the other stuff you mention is lethal. It could only have come from a government headed by Eton, Westminster and St Pauls – Dave, Nick and Gideon… not a clue re real life in real world

  • Chris lancashire

    All well and good to criticise the cuts but until you and the Labour Party come up with a credible plan for dealing with the huge defecit it remains useless carping from the sidelines.

  • David

    I does seem a little unfair that families with one income could lose more than twin income families and I have no doubt that some families will feel the loss acutely. I wish there was better solution. But given that this cut is being applied to high rate taxpayers it is very unlikely to be one that causes people to die. Whoever is to blame for the state of the nations finance, cuts do have to take place and they do have to start somewhere. You suggest labour have to be better at pushing back. I agree and they have to start pushing back with a sensible alternative. But as long as they just keep knocking cuts and saying how horrible they will be and suggesting that there is no need for them and that labour would not do it, then they will continue to lack credibility. Tony Blair acknowledged the needs for the cuts, even saying the coalition had it about right. Ed Milliband said Labour would be cutting if they were in power. It is now time to come clean and to start putting the meat on the bone and saying what acceptable cuts labour would make rather than just trying to be populist crowd pleasers.
    If the coalition collapses and Labour suddenly found themselves back in power what would they do – implement a series of cuts that the country needs but they had lied about in opposition or avoid cuts and then be forced into more borrowing and spending – which will send the debt mountain even further into the stratosphere for future generations to deal with?
    My guess is that faced with this dilemma, Labour would break into factions that would make the serious tensions you describe in your book “prelude to power” between those that “get it” and those that don’t seem inconsequential.

  • Bar Bar of Oz

    I don’t understand how it is possible to fold child benefits into one universal benefit if the number of children in the family is not taken into account? Surely there must be some mechanism to allow for this in the proposal?

    btw the idea of universal, non mean tested entitlements was abolished in Australia – by Labor govts (!) more than 15 years ago. The idea of paying upper income earners from the public purse is anathema to Aust. Labor now. I am often bemused when I come over here to be reminded of how old fashioned and even anchronistric the UK is compared to home.

    We did our “new Labor” revolution between 1969 and 1972 – more than 22 years before TB started reforming Labour and getting rid of Clause 1V etc here. And the idea of still singing the red flag at the Conference …takes me back to the 50s in Oz!

  • Olli Issakainen

    George Osborne appears to have a selective memory. He somehow “forgot” to mention that also Nobel-winning economists have said that the deep and fast cuts are simply wrong.
    But perhaps Messrs Cameron and Osborne know better..?
    Tackling the structural deficit of £109bn in a way Mr Osborne intends to do may actually increase the cyclical part of the deficit.
    George Osborne has no plan for growth. He has no plan B. All he wants to do is cut, cut and cut.
    Cameron and Osborne have already managed to talk down both business and consumer confidence.
    Everyone who has read Keynes knows that governments are not like households. As for IMF, it has got it all wrong before.
    The coalition is unnecessarily risking the recovery.
    We are all in this together. But the Tories are jumping with joy as they shrink the state by cutting spending and are thus harming the poor. It is basic economic rule that you do not cut public spending when there is high unemployment.
    Who is to blame for the “mess”?
    Francis Maude recently wrote in the Guardian that there will be cuts. These are Labour´s cuts caused by their fiscal incompetence, he claimed.
    David Cameron has said that it is because of Big Government that we are in this mess. But is it Labour´s fault? Let´s see what the facts tell us.
    Britain´s public sector net debt was £823.3bn (56.3% of GDP) at the end of August 2010. Before the crisis it was ONLY 40% of GDP – less than many competitors had. So Labour did not OVERSPEND!
    Between 1997-01 Budget was in surplus. Then Labour ran SMALL deficits between 2.3% and 3.3% till the crash.
    Recession caused by global banking system caused the leap upwards in deficit. According to IFS the reason for the big deficit was bank bailouts and recession. Not Labour overspending!
    More regulation would not have prevented the economic crisis as it is always some new instrument which causes the problems. Crashes and crises are built-in in capitalism.
    It is also worth noting that the Tories backed Labour´s spending plans 2005-07. When the financial crisis hit Britain, the Conservatives opposed all the vital measures – fiscal stimulus, bank nationalisations and quantitative easing – which helped Britain to avoid depression.
    But still the myth prevails that the Tories are competent on the economy. They are NOT!
    Alistair Darling said that the coalition´s approach is dishonest. Labour government´s investment in public services after years of Tory neglect did not cause the global crisis. The deficit in not big as a result of extravagant spending but as a result of the banking crisis and the economic crisis that followed it.

  • James

    Its a well-known truth that all governments blame all the bad stuff on the previous bunch, and be honest, New Labour did it well past the sell by date! The reality is that the deficit needs dealing with, the problem is that the Tories are dealing with it by hurting the recipients of the benefits system rather than by hurting the more well off, especially those responsible for the recession, the bankers.

    That is not necessarily a bigger picture one would expect your students to have grasped but they understand the first part – hopefully you are educating them as to the importance of the second part and perhaps, being the message man that you are, you are helping them to understand why it is so difficult for governments to actually make the banks pay for their horrific errors!

  • an angry lady

    There are many things that George Osbourne needs to learn. The first one being that whilst pontificating about how badly Labour lost the election, his crew should be much more worried about how badly his lot actually managed to win it. The public have not moved over to a right wing way of thinking (if they have, I have missed it, sorry!)
    I hate the fact that the media have focused on the child benefit, middle England debate and have failed thus far to have a grown up discussion about poverty, it’s causes and solutions. We’ve just got to make sure we stop the scroungers scrounging. Right?
    Five minutes away from me as I write this I know of a mother of three. She lives in a two roomed flat, and shares her bed with her three children. She is illiterate. She has never claimed free school meals, council housing, and the correct benefits because she can’t read the forms. Yet her kids miraculously turn up for school neat, tidy and well behaved. She wants what is best for them. She does not want their future blighted the way her life has been. She is trying to be, and is in her own heartbreaking way, a wonderful mum. She’s always wanted help, she’s just never asked. And now the people who are trying to help her don’t know what to say to her. Because we don’t know who will fight her corner. I don’t give a shit whose fault it is that she has ended up so badly educated, living in circimstances that befit a third world country as opposed to a middle English market town. I just want to know who will help. I want to know that the Government of my country will not just write her kids off as no-hopers and chuck them onto the dust heap.
    And a word to the middle classes who are loosing child benefit. I do oppose the cut. I’m grateful that our very close to that threshold income is spread over two wages. But we don’t struggle. We juggle. Juggling is hard. And it does not mean we should have to struggle instead. But the two things are not the same.

  • Graham

    It’s intriguing to hear many in the business community (Digby Jones – please stand up) slavishly cheer cuts and changes to benefits and public sector spending. I’d have thought by now they’d realise that people on lower incomes and on benefits tend not to be able to afford to save and therefore spend almost all of their income (usually locally in shops, pubs etc or paying local small businesses for services, plumbers, etc).

    In Scotland alone a detailed report produced last month (www.scottishpovertyforum.org.uk/impactreport.pdf) shows that the benefits cuts and freezes will take more than half a billion pounds out of the Scottish economy each year.

    I’d be interested to know how small businesses are planning to cover that substantial shortfall in their collective turnovers. And that figure will only grow much larger when we learn the true scale of public spending cuts later this month.

    We all want the private sector to be successful but it has been overlooked for far too long that the private sector needs the public sector to be bouyant, it is no accident that business boomed while the Labour Government increased public spending. It’s time for the private sector to acknowledge its near-dependency on public sector spending being maintained.

    If I was in business or in a low paid job I wouldn’t be whining about people on benefits or about public sector workers, instead I’d want to keep people in work and be encouraging those in need to claim all they are entitled to and spend it iin my shop or place of business!

  • Simon Landau

    You write “To a nation constantly seeing headlines of families taking huge sums – which tend to be the exception but are portrayed as the norm ….”. It is interesting that you use ‘tend’ which is frankly a weak and equivocal use of language. Surely families taking huge sums are (unequivocally) the exception ! So, the issue for progressives is to how to combat this equivocation which now pervades the debate on welfare. Your classroom did not equivocate how can we follow that example ? We cannot rely on the old media model which is so set on using the exception as the basis of narrative. The Labour Party social and campaigning media is frankly not up to the job. JP’s son has suggested we use something like crowdmapping software (http://blog.ushahidi.com/index.php/2010/08/09/introducing-crowdmap/). So, if (God forbid) people do start living on the streets as an outcome of the cuts we need to make that manifest. Would you be prepared to host it on your excellent site ?
    Are you

  • Nicky

    You’re right, AC – Labour needs to be much more assertive about tackling this ConDem rubbish about ‘Labour’s mess’. It is such a travesty of the truth it beggars belief. Of course it doesn’t help that our media is so much in the pocket of the government (a scandal in itself). For example, apart from the Guardian, there appears to have been a news blackout regarding the demonstration against the cuts in Birmingham yesterday – since when has a demonstration (attended by about 7,000 people) not been regarded as newsworthy?

    Good comment by Julie the other day (on the challenging students project) about the way the govt cuts are affecting children’s education – and also all the nonsense about how the Tories keep demanding an ‘apology’ from Labour – what mind-blowing, deluded, lying hypocrisy.

    It sounds like very satisfying and interesting work that you’re doing with these young people. It’s great that they’re being given a chance to find their voice and way in the world.

  • Richard Brittain

    I think it’s a rather unfortunate position for Labour because the reality is that most people believe that Labour DID mismanage (probably because both Tories and Lib Dems kept saying it for months). I agree that Labour have done a poor job in trying to defend themselves and explain the economic situation. It’s going to be very difficult to get out of that hole.

    I agree about benefits. Especially with IDS running the system, there is going to be havoc. It seems very likely that there will be more people living on the streets under Tory rule. There are an awful lot of middle class, middle-aged workers, though, who love to moan about benefits spongers (mainly because they don’t like the idea of their taxes going to “bums and drunks”) and those people are enjoying the cuts. They will take some swaying to vote Labour next time.

  • Bodmin

    Perhaps it would have been better if Gordon had let the banks go to the wall. I really don’t understand how you propose to hurt the bankers and we already own 2 of the banks. Taxing the high earners is all very good but there aren’t enough of them compared to the rest of us! The govt has very little choice in reality.

  • s chapman

    What a load of total crap AC.
    What part of the international world lead to Northern Rock lending to all in sundry some £80bln when they only had £10bln in deposits ( or a similar multiple) – did the last Govt not know this was happening or was it that being in the North-East they dare not have the bollox to stop it.
    You’re really way off the current pulse re the deficit.
    Everyone out there knows we have too much debt and what other countries do is up to them but with a BRAIN you realise that big debts just get bigger?
    Do you AC have a credit card debt? Probably not..or its paid back in a timely fashion.,sensible yes??
    Your mates in the last shower of a Govt hired 1m extra public sector workers in the belief they would always vote Labour…and your so comfortable dishing out benefits to people struggling because you know turkeys dont vote for christmas…i.e they will always vote for the hand that feeds them INSTEAD of getting them off benefits into work…something alien to you and your ilk…
    This is the worse blog I’ve ever read – although I disagree with your views I read and learn most of the time when on your website,but this is total crap.
    WE ARE IN THE DEBT HOLE OF A LIFETIME what dont you get about that !!! ??

  • s chapman

    Are you from the U.K ?
    I believe you live in outer space and look down through some looking glass that always reads ” I’m right ”
    You are in a minority of one my friend and not only that you are trying to re-write history…are you seriously telling me that the last Govt did not know that institutions like Northern Rock,Alliance Leicester , Bradford..etc etc were lending totally recklessly and were unable to stop it???GB knew exactly what the U.K relied on and that was a big Govt and allowing debt to mount personally….you dont anywhere mention in your usual drivel that every man,woman and child in the U.K owes over £10k away from any mortgage they might have…WHO LET THAT HAPPEN??

  • William

    Olli is most definitely not in a minority of one. He may live in Finland but what he doesn’t know about British politics isn’t worth knowing!

    Why is it that wiseacres like you (s chapman) always think your views are shared by the majority? They’re not! And putting in gratuitous insults, SHOUTY CAPITAL LETTERS and crazed punctuation doesn’t make your argument any more convincing – it just makes you look like a hysterical berk who believes every word he reads in the Daily Mail or on ConHome.

  • alienfromzog

    As I was saying the other day. This is why politics matters because it is about real people’s lives.

    I have wet eyes after reading this comment.

    Why cannot the individual media stories about people on benefits focus on individuals like this rather than the exceptions who appear to be creaming it in at the tax payers expense?

    I know why. And yet I have to ask why? Why-why-why?

  • island

    People…you really need to understand what a dire situation this nation is in..we´ve been fed at the breast of socialist policies for so long, it seems that the notion of responsibility is an anathema.

  • Dai

    Good commentary again Alastair. This all looks to me like one massive shambles. How come, for a starter, that such a undermining of OUR welfare state doesn’t even get presented to Parliament in the first instance? Did I miss something or are they as MP’s still supposed to be serving us? I was under the impression the Tories were holding a PARTY conference. So where is the scrutiny and the accountability or is it the case that Clegg will just have to swallow this and pretend he is totally on board with it while the rest of us wonder what moronic wheeze they’ll next think up on the back of a fag packet? Why was Hammond with a portfolio for Transport fronting up answers to child benefit? Is there a plan or are they all just chipping-in and doing it all on the hoof? God help us mere mortals when they’ve run ot of things to screw up and retire to the safety of their independant wealth. Also when are we likely to see any end to the butt-kissing by Robinson, Kheunsberg and Maar? Now we’ve had ‘Big Society’ and ‘Child Benefit cuts’ clearly thought up in about 3 seconds flat, what’s the next great strategic act of brilliance we can expect? Are those so called political heavyweights at the BBC actually going to ask something worth their pay and find out if there is indeed a cohesive narrative or are they just going to keep cutting the Tories far too much slack and never point out its all very obviously slap dash and amateurish? Why is there such a light touch on the tensions between the left and right in the Tory party e.g. Fox and his ‘I’m a better leader’ posturing on defence? The so called ‘heavyweights’ were never so shy of laying into GB when anyone even hinted that they disagreed with that PM’s vision.
    Also, WHERE ARE THE JOBS COMING FROM? La La Land seems to be the obvious answer given the upcoming spending cuts’, Clarkes desire to get ex offenders into ‘a routine of hard work’ and the probable ‘renegotiation’ of large scale defence contracts. Thatcher tried her best to erradicate manufacturing saying that if an industry couldn’t sustain itself in the marketplace, it deserved to die. Well on that measure (and were it not for the Govt proping them up) many banks effectively died back in 2008 and their assets and profits including all monies available for bonuses should be used to pay back the country until ALL the damage they inflicted is repaired. In fact, why aren’t there any fraud or embezzlement investigations? There seems to have been an awfull lot of trading where nothing of any value was exchanging hands and clearly with many so called experts not scrutinising or meeting their obligations. The Tories clearly want us to forget they were very anti-manufacturing and pro-service industry under Thatcher yet they now expect us to somehow see the stability of the public sector as the source of all our ills. Somehow, I guess also in La La Land, the public sector is to take a huge hit BUT at the same time support and trust the private sector to stop the virtual profiteering (banks and the over inflated property market). Still, we’re all in it together aren’t we Georgy and Dave? No we’re not…not on you nelly !

  • Keith B

    Two things strike me about the Child Benefit announcement yesterday first of all it is a universal benefit which is being cut. The amounts being saved are small about one billion a year by most estimates so in reality it is small beer to the size of the black hole that the Tories keep telling us exists.

    So to me the real point is to break a taboo to slowly but surely soften us up for the disappearance of more universal benefits, say something like universal free healthcare.

    The second point is that the Tories line is the ‘better off can afford to lose it’ so why doesn’t that logic apply to Inheritance tax as well or to the higher rate of tax, which they oppose, but have kept for the moment. It will be interesting to see when the new 50 pence rate gets cut, maybe 2013 or am I being too cynical for my own good.

    For me this was not about economics but ideology and ideology with a real threat to the poorer people in society.

  • Teresa

    Through no fault of his own, my Brother-in-law is unemployed, he is now counting screws in to boxes so he can receive his 62 quid a week, he couldn’t even get a job in the new Asda store that opened locally, as more than 1,000 people applied. He lives with his mom who is now a pensioner and widow, they started to get charged full rent, because when you do these schemes you must be classed as being full time employed, they are now trying to sort it all out, the worry of it has made her ill, it all seems so unfair. It’s true that the way the media portray people who are unemployed is terrible, the majority of people aren’t like that at all.