The benefits freeze has at least three striking features. First, there is timing. The best time to introduce it, in retrospect, would have been 2010, not 2014 – in other words, at the start of the Coalition’s term, when voters were relatively likely to give a fair wind to measures that would help to reduce the rate of public spending, such as the pay freeze.
Second, there is an oddity that has nothing to do with the Government and everything to do with Jeremy Corbyn. It is not often grasped that he didn’t propose to lift it in his election manifesto two years ago. Yes, Labour proposed to scrap benefit sanctions and the spare room subsidy. But there was no promise to end the freeze.
Finally – and as with wage freezes – it’s easy in, not easy out. The freeze was originally introduced for two years in 2014. It was then doubled to four years in 2015. Privately, Amber Rudd wants rid of the freeze and, publicly, says that it won’t be renewed in 2020. But one never knows: in the now unlikely event of a No Deal Brexit, there may be additional need for public spending restraint. Philip Hammond will make much of that when the Budget comes.
The deficit is now only 1.8 per cent of GDP – Osborne slowly ground it down during his terms as Chancellor – and, for all the Chancellor’s denials, ending it altogether is being pushed off into the never-never. The question is that follows is whether Hammond should look to lift the cap early as the Work and Pensions Select Committee recommends.
Elsewhere on this site today, Mark Wallace writes about pressures on public spending over policing and crime. That’s a reminder, were it needed, that there should never be a let-up on control. But the long-term, relatively unaddressed challenge is in relation to health and pensions, which together consume roughly a third of public spending.
The point about the benefits freeze is that it covered payments for people of working age – including part of the employment and support allowance and, eventually, Universal Credit. Iain Duncan Smith believed that the squeeze on working people had become disproportionate to that on retired people. It was not the immediate cause of his resignation, but it was a factor.
This is not a good time for Rudd to be making a policy pitch, at least in terms of gathering party support, because her flouting of collective responsibility over Brexit sours her pushing of any other policy elsewhere. However, it doesn’t follow that she is wrong in this case. There is a strong case for altering the balance of welfare spending between working people and those retired.