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Who will vote for George Osborne's even nastier economic medicine now? Who will vote for George Osborne's even nastier economic medicine now?
(about 11 hours later)
Yesterday two unnoticed but telling things happened: the annual minimum wage rate rose to just £6.31 an hour – now worth £1,000 less than in 2008. And the Agricultural Wages Board was shut down, so pay will fall for an isolated and vulnerable workforce living in tied housing and caravans. A wild idea floated through the conference fringes that the Conservatives would steal Labour's thunder, refusing to be cast as harsh on the lowest paid, defenders of monopolistic business or champions of FTSE 100 CEOs whose average pay rose to £4.3m. But it was just business as usual from George Osborne.Yesterday two unnoticed but telling things happened: the annual minimum wage rate rose to just £6.31 an hour – now worth £1,000 less than in 2008. And the Agricultural Wages Board was shut down, so pay will fall for an isolated and vulnerable workforce living in tied housing and caravans. A wild idea floated through the conference fringes that the Conservatives would steal Labour's thunder, refusing to be cast as harsh on the lowest paid, defenders of monopolistic business or champions of FTSE 100 CEOs whose average pay rose to £4.3m. But it was just business as usual from George Osborne.
Instead, he committed his party to monumental extra cuts after the election. "The sun has started to rise above the hill," he said, but that message of optimism sits oddly with years of more extreme belt-tightening. And whose belts exactly does he mean?Instead, he committed his party to monumental extra cuts after the election. "The sun has started to rise above the hill," he said, but that message of optimism sits oddly with years of more extreme belt-tightening. And whose belts exactly does he mean?
Already an enormous £25bn cut is marked out for 2016-2018, harsher than the pre-election years, says the Institute for Fiscal Studies. His new policy to get into surplus leaves another £43bn to be eliminated by 2020. If he keeps to his pledge to do this by cuts not tax rises, that's a 10-year freeze which, says the IFS, has never happened before.Already an enormous £25bn cut is marked out for 2016-2018, harsher than the pre-election years, says the Institute for Fiscal Studies. His new policy to get into surplus leaves another £43bn to be eliminated by 2020. If he keeps to his pledge to do this by cuts not tax rises, that's a 10-year freeze which, says the IFS, has never happened before.
What cuts? Benefits were all Osborne's briefers named – but short of tipping every poor family on to the streets, that means taking a meat-cleaver to most other services too. Is it feasible to think they can win an election with a gigantic new assault on public provision? The Office for Budget Responsibility says over a million public-sector jobs will already be gone by 2015 – with many more to come. Osborne briefers said this takes the ultimate political challenge to Labour: match that!What cuts? Benefits were all Osborne's briefers named – but short of tipping every poor family on to the streets, that means taking a meat-cleaver to most other services too. Is it feasible to think they can win an election with a gigantic new assault on public provision? The Office for Budget Responsibility says over a million public-sector jobs will already be gone by 2015 – with many more to come. Osborne briefers said this takes the ultimate political challenge to Labour: match that!
Far from chiming with a public that has until now acquiesced in deficit-cutting, this may go too far. Consider Osborne and David Cameron's capacity for omnishambolic error, both practical and political. His freeze on fuel duty will be popular, though it undermines his attack on Labour's energy price freeze as a "gimmick" – and it lacks the symbolism of Labour's readiness to take on the great cartels. Some wise speakers here are alarmed at how Labour has stood on the side of the consumer, leaving the Tories to defend the likes of Centrica.Far from chiming with a public that has until now acquiesced in deficit-cutting, this may go too far. Consider Osborne and David Cameron's capacity for omnishambolic error, both practical and political. His freeze on fuel duty will be popular, though it undermines his attack on Labour's energy price freeze as a "gimmick" – and it lacks the symbolism of Labour's readiness to take on the great cartels. Some wise speakers here are alarmed at how Labour has stood on the side of the consumer, leaving the Tories to defend the likes of Centrica.
The puny £3.85 a week marriage tax break is greeted with no great enthusiasm here even by those calling for it for years, as it reaches only 15% of families with children. As for rushing forward £12bn in Help to Buy, setting off a sub-prime lending bubble, that frightens most economic observers, including the International Monetary Fund. Chancellors are prone to engineering pre-election booms, but state-subsidised mortgages threatening negative equity look extraordinarily reckless to many Tories here.The puny £3.85 a week marriage tax break is greeted with no great enthusiasm here even by those calling for it for years, as it reaches only 15% of families with children. As for rushing forward £12bn in Help to Buy, setting off a sub-prime lending bubble, that frightens most economic observers, including the International Monetary Fund. Chancellors are prone to engineering pre-election booms, but state-subsidised mortgages threatening negative equity look extraordinarily reckless to many Tories here.
"Help to work", ending "something for nothing", stands as the paradigm for their style of evidence-free policy-making: grab the headline, make the splash, and worry about details later. Initial public reaction to his "crackdown" (Mail) on the "workshy" (Sun) will be popular, but don't bank on that lasting once details emerge. The bedroom tax was popular too at first – but a majority swung against it once people understood its impossible and expensive contradictions. Hard hearts softened and may again."Help to work", ending "something for nothing", stands as the paradigm for their style of evidence-free policy-making: grab the headline, make the splash, and worry about details later. Initial public reaction to his "crackdown" (Mail) on the "workshy" (Sun) will be popular, but don't bank on that lasting once details emerge. The bedroom tax was popular too at first – but a majority swung against it once people understood its impossible and expensive contradictions. Hard hearts softened and may again.
I called the Department for Work and Pensions for details of the help-to-work scheme. Not us, they said, this is the chancellor's, call the Treasury. No, said the Treasury, "the granular details" will be worked out by the autumn. But if you haven't worked out what is to be delivered, by whom, how do you know £300m is the right sum to set aside? No answer.I called the Department for Work and Pensions for details of the help-to-work scheme. Not us, they said, this is the chancellor's, call the Treasury. No, said the Treasury, "the granular details" will be worked out by the autumn. But if you haven't worked out what is to be delivered, by whom, how do you know £300m is the right sum to set aside? No answer.
It will soon dawn on voters that this signals the depth of failure of the work programme. Fewer than 20% of people sent on to it get a job. A million people come out of it with nothing, after waiting a year to go on to it and after two years in it. The companies running it do no better and sometimes worse than jobcentres, at a cost of £450m and rising. Those emerging jobless from the work programme each year will have to sign on every day, join a compulsory community work project or get special help for their problems.It will soon dawn on voters that this signals the depth of failure of the work programme. Fewer than 20% of people sent on to it get a job. A million people come out of it with nothing, after waiting a year to go on to it and after two years in it. The companies running it do no better and sometimes worse than jobcentres, at a cost of £450m and rising. Those emerging jobless from the work programme each year will have to sign on every day, join a compulsory community work project or get special help for their problems.
But why hasn't the work programme given them help in those two years? These companies have a well-deserved reputation for creaming off the most employable and parking unlikely prospects without help; now their rejects are branded as workshy idlers. When people queue round the block to sign on daily, the reasons why many have been out of work so long may be obvious. Some are mentally ill, many have multiple problems of their own or at home. Unsurprisingly, employers prefer the freshly unemployed. Meanwhile, under this government, the long-term unemployed have multiplied by 390%. But why hasn't the work programme given them help in those two years? These companies have a well-deserved reputation for creaming off the most employable and parking unlikely prospects without help; now their rejects are branded as workshy idlers. When people queue round the block to sign on daily, the reasons why many have been out of work so long may be obvious. Some are mentally ill, many have multiple problems of their own or at home. Unsurprisingly, employers prefer the freshly unemployed. Meanwhile, under this government, the long-term unemployed have increased by 390%.
Forcing them to work for six months for no extra money will not be easy: the existing four-week mandatory work scheme, used as a punishment, caused reputational damage to charities and businesses. Oxfam, Age UK, Shelter and Cancer Research UK all pulled out, as did many companies. An army of people working for free will certainly displace real jobs, as other countries discovered.Forcing them to work for six months for no extra money will not be easy: the existing four-week mandatory work scheme, used as a punishment, caused reputational damage to charities and businesses. Oxfam, Age UK, Shelter and Cancer Research UK all pulled out, as did many companies. An army of people working for free will certainly displace real jobs, as other countries discovered.
The government's own research on mandatory work found it had no good effect on getting people real jobs. Food banks have shocked many who otherwise supported tough-on-the-workshy schemes. Citizens Advice, local councils and the Trussell Trust report many, if not most, needing food are people who have had their benefits "sanctioned". The longer out of work, the tougher the conditions, the more people are sanctioned for failing to turn up: sometimes appointment letters never arrived.The government's own research on mandatory work found it had no good effect on getting people real jobs. Food banks have shocked many who otherwise supported tough-on-the-workshy schemes. Citizens Advice, local councils and the Trussell Trust report many, if not most, needing food are people who have had their benefits "sanctioned". The longer out of work, the tougher the conditions, the more people are sanctioned for failing to turn up: sometimes appointment letters never arrived.
This new turn of the screw will ensure many more are sanctioned off benefits for a while, to be claimed as a "success" by Iain Duncan Smith. Many return rightly reclassified as sick. Using the unemployed as a cheap political weapon may well backfire, as it advertises how badly the work programme has failed them. Labour's plan for real, paid jobs has the benefit of having been proved to work: its future jobs fund for the young was the most successful back-to-work scheme yet devised, until abolished by IDS.This new turn of the screw will ensure many more are sanctioned off benefits for a while, to be claimed as a "success" by Iain Duncan Smith. Many return rightly reclassified as sick. Using the unemployed as a cheap political weapon may well backfire, as it advertises how badly the work programme has failed them. Labour's plan for real, paid jobs has the benefit of having been proved to work: its future jobs fund for the young was the most successful back-to-work scheme yet devised, until abolished by IDS.
So battle lines stay where they were: some voters will believe the need for Osborne's yet nastier medicine still to come. But forever dogged by his disastrous tax cut for the rich, he will struggle to be believed when he said: "We're going to recover together, and together we're going to share in the rewards." Never underestimate Cameron and Osborne's ability to misjudge the public mood.So battle lines stay where they were: some voters will believe the need for Osborne's yet nastier medicine still to come. But forever dogged by his disastrous tax cut for the rich, he will struggle to be believed when he said: "We're going to recover together, and together we're going to share in the rewards." Never underestimate Cameron and Osborne's ability to misjudge the public mood.
• This article was amended on 1 October 2013. The original stated that "the long-term unemployed have multiplied by 390%". This has been corrected.
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