It seems callous to write about a British welfare payment in the aftermath of a horrifying terror attack – and the danger to our own troops and citizens in Afghanistan. Perhaps it is.
But the bleak reality is that more Conservative MPs will be exercised by the coming end of the Universal Credit uplift than the death of at least a dozen American servicemen.
One of the Government’s few Commons defeats since the last election has been over the payment (the House didn’t divide last week over Afghanistan). In January, the whips threw in the towel, and withdrew opposition to a Labour Opposition Day motion about it.
It was previously unheard of for Tory MPs to vote for such a motion, but six of them joined Keir Starmer’s party in the lobbies. Rishi Sunak, who was driving support for the uplift’s end, was forced to back down, and a decision was postponed for six months.
Will lightning strike twice? The Treasury sees stopping the uplift as one of two specific challenges when Parliament returns, the other being the end of furlough.
However, furlough is being phased out, with the contribution of employers being tapered, while the uplift will go off a cliff edge. Two Conservative MPs, Peter Aldous and John Stevenson, have fired a warning shot.
Stevenson is an active member of the Northern Research Group, which has taken the same view, and has a membership of some 50 MPs.
However, some Conservative MPs who support the uplift believe that Sunak is in a better place this time round. There are three main reasons why they may be right.
The first is one that applied at the time of the January vote. Opposition Day votes aren’t binding on the Government (which is why Labour in the last Parliament, with the assistance of John Bercow, hit on exploiting the use of a Humble Address).
The Opposition could try such a variant again but, if it did, a second factor could kick in: namely, the recent fall in unemployment and the record number of vacancies.
“The Chancellor told me this would happen and he was right,” one MP told this site. Unemployment is still higher than it was at the start of the pandemic, of course, but the drop will eat away at backbench resistance.
The final factor comes from calculating what effect Sunak’s Treasury operation has on Tory backbench rebelliousness, and what the propensity of Conservative MPs is to vote against the Government in the first place.
The best recent test of the former was the overseas aid reduction vote. The rebels originally briefed that over 40 Tory MPs could revolt – enough to defeat the Government. That figure was out by almost half: 24 of them opposed the Government.
Team Sunak deployed a mix of charm, hard work and (according to some backbenchers) threats to whittle the rebellion down. It also ran active media and aggressive rebuttal operations.
For example, it was quick out of the traps on the morning of the vote to counter a Save The Children briefing about when the proposed tests for restoring the 0.7 per cent aid target would be met.
And details of the vote suggest that recent generations of MPs with their political careers ahead of them are receptive to the blandishments of the whips.
Only two members of the 2019 intake joined the revolt, which was largely confined to former senior Ministers and present Select Committee Chairmen.
That MPs won’t feel the constituency hit from the uplift’s end until after it happens will also help the Treasury. Nonetheless, some of its supporters claim a strategic win over Universal Credit even in the event of a specific defeat on the uplift.
Under the Coalition, the Conservatives took an aggressive approach to welfare payments. Lauding “hard-working families” who “play by the rules” became a staple part of Tory rhetoric, especially in the Lynton Crosby-managed run up to the 2015 election.
“Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits?” George Osborne once said.
The former Chancellor was sceptical about the introduction of Universal Credit, and he had a point about the costs it would incur and the upheaval it would create. Rolling six payments into one was never going to be straightforward.
Nonetheless, Iain Duncan Smith, who drove Universal Credit’s introduction through as Work and Pensions Secretary, saw the bigger picture – namely, the improvement it would make on incentives to work.
And as he pointed out recently on this site, it has been a quiet hero of the pandemic, having absorbed over 1.5 million new claims at the time that he wrote.
“On the old system these claimants would have to be processed physically and the queues and chaos at job centres would have dwarfed anything we have seen so far, as well as increasing infection rates,” he said.
Key to Universal Credit is its payment to people who are in work as well as those who are not. The Prime Minister defended ending the uplift yesterday by saying that wages should best rise through people’s own efforts and not taxpayer subsidy.
He’s right – but his argument recognises that the credit isn’t simply doled out to those who aren’t working, and that recent governments of all parties have combined welfare and work.
John Major oversaw the introduction of Family Credit as a Social Security Minister during Margaret Thatcher’s third term. Gordon Brown took up the principle of welfare to work in his tax credit schemes. Universal Credit is the latest big development in the field.
On the one hand, welfare to work schemes can disincentivise employers from paying decent wages; on the other, they can get people into work, and then be tapered away.
That Brown got the balance wrong is yesterday’s story. Today’s is that the Johnson Government, following the May one, has a less confrontational approach to welfare than Cameron’s.
This reflects the bigger size of the state in the Midlands and Northern seats that the Conservatives won in 2019. Which is not to say that Universal Credit is a perfect vehicle – there is a case for a negative income tax – or that it is the only means of helping poorer people.
The Centre for Policy Studies has made a good case for extending the taper. Paul Maynard says that Ministers “should be listening to the Centre for Social Justice about supporting families practically, though schemes such as the Holiday Activity & Food Programme”.
Stephen Crabb points out the importance of reskilling and the role of childcare. If Sunak gets his way on ending the uplift, it will mark another big win for the Treasury institutionally and him personally.
But as this range of centre-right ideas demonstrates, a Conservative social justice policy is about much more than sustainable public finances – a necessary but not sufficient condition for it.
And the Government should keep an eye on Jonathan Reynolds, one of Labour’s most capable Shadow Ministers, stealing their thunder. He’s up for reducing Universal Credit’s taper rate.