Much has been made of Osborne restricting benefit increases to 1% for each of the next 3 years, which is, in effect, a significant cut in benefits (even if the Bank of England actually hit their inflation target of 2%, benefits will be cut by over 3% in real terms). The argument goes that Labour can’t vote against this proposal without being seen as favouring “shirkers over workers”. Labour have countered by saying that Osborne is playing a political game by setting this trap and that 60% of the benefits actually go to people in work.
All of the above is true but Labour should turn defence into attack.
1) The argument that the cut impacts those in the work is compelling, especially when at the same time income tax on earnings over £150,000 per annum will be reduced from 50% to 45%. By the way, I’m perplexed as to why Labour haven’t made more political capital out of this change. Calling it a millionaires’ tax was an obvious mistake. What they should have done is produced a ready-reckoner for the very rich. Then they could have said; if you earn £200,000 you’ll save £2,500 per year, if you earn £500,000 you’ll save £17,500 per year and if you earn £1m you’ll save £42,500 per year. Spelling out the detail with actual figures rams home the message a lot better than slogans.
2) They should distance themselves from Osborne’s caricature of the feckless unemployed sleeping behind their curtains. Only a small minority are long term unemployed. Labour could have countered with examples of the type of people that are unemployed. Young people, including graduates struggling to find their first job, long-term workers made redundant, loyal public service workers made jobless as a result of cuts, people in between jobs etc, etc. In addition they should point out a contradiction at the heart of Tory philosophy. If Iain Duncan Smith is successful in ensuring that work pays and that the long term unemployed get back to work, then it follows that those seeking unemployment benefit are not shirkers but people that are suffering short-term employment difficulty.
3) Labour should then say that they would like to:-
a) Reverse the cut in the top rate of income tax.
b) Work with the Lib-Dems to introduce a mansion tax to pay for inflation matching benefit increases.
If Labour followed this approach, how could the Lib-Dems vote with the government and at the same time say that they supported fairness?