Published:

10 comments

Shield

Just before Christmas I was at a lunch of Westminster types when a question was addressed to the whole table: “who do you think will be the next leader of the Conservative Party?”

One by one we answered, with most people going for Boris Johnson and some for Theresa May. Then it was my turn: “Esther McVey,” I blurted out. To my surprise, the reaction was not laughter or incredulity, but an intrigued invitation to explain myself.

I argued that as long as the Conservative leadership looks and sounds like the posh Tory stereotype we haven’t a chance of winning a majority. This received a polite hearing and it was agreed that McVey does indeed defy the standard image. Politics, though, is about more than image – and some doubt was expressed as to whether the Member of Parliament for Wirral West could supply the necessary substance.

Of course, it is still far too early to come to a judgement on any member of the 2010 intake. However, in an important article for the Telegraph, Fraser Nelson tells a rather interesting story – the context of which is the conflict between George Osborne and Iain Duncan Smith over welfare reform:

“…[IDS] is not alone. Esther McVey, the newish employment minister, has made clear to the Treasury how appalled she is about the enthusiasm with which it talks about welfare cuts. When ministers were given suggested talking points before Osborne’s Autumn Statement, she protested about the divisive language. She warned that you can’t continue cutting working-age welfare indefinitely without causing real hardship in Northern towns – and Conservatives ought not to forget that.”

If this version of events is to be believed, then McVey showed real guts in questioning the prevailing orthodoxy. Make no mistake, the Conservative leadership sees welfare reform – or rather welfare cuts – as their best hope for eliminating the deficit and winning the next election:

“Osborne… has been struck, almost mesmerised, by the popularity of welfare reform – which is why he’s promising more of it. Earlier this month, he claimed another £12 billion of welfare cuts are needed and challenged Labour to disagree. He believes this is a classic ‘wedge’ issue, which will align him with blue-collar workers. Tory polling and focus group research has identified this as a potent issue: the low-paid, they believe, deeply resent welfare dependency and hugely support attempts to crack down on it. It is a chance, according to Osborne, for the Tories to become the new party of labour – by helping workers, and getting tough with non-workers.”

But for the Work and Pensions Secretary and his allies there’s more at stake than money and votes:

“IDS… freely admits that his main aim is to save lives, not money – but this was always the case. The Wisconsin ‘tough love’ welfare reforms, on which his programme was modelled, did not cut the budget by much. Welfare reform, if done properly, is rather expensive: people need to be coached back into work, given help with CVs and even with transport.”

So is this a choice between doing the right thing on the one hand and building a Conservative majority (while restoring fiscal sanity) on the other?

Actually, no. While Osborne’s slash-and-burn approach to welfare is designed to produce more in the way of short-term savings than Duncan Smith’s more considered approach, the long-term effects are less certain. If an otherwise healthy, working-age individual is effectively unemployable then that is down to deep-seated social problems. Merely cutting such a person’s benefits will produce an immediate saving, but it won’t deal with the underlying issues – which, if left to fester, will manifest themselves in some other drain on the public purse.

As for the popularity of welfare crackdowns with blue-collar workers, we shouldn’t forget Ed Balls’ proposed re-introduction of the fifty per cent top rate is also popular with the same group of people. In fact, in an age of budgetary crisis, most spending cuts and tax rises are popular with whoever isn’t hurt by them.

The question that George Osborne should really be asking himself is whether his approach to welfare reform is going to change minds about the Conservative Party. I would suggest that the news that a posh Tory wants to squeeze the underclass will come as no surprise to anyone.

However, if Iain Duncan Smith’s compassionate conservatism were to be implemented (and communicated) with the care and patience that it deserves then that could be a very different story.

10 comments for: George Osborne has misunderstood the politics and economics of welfare reform

Leave a Reply

You must be logged in to post a comment.