Waiting for the Crackdown

The Crackdown

The Prime Minister's speech today reminded me irresistibly of this clip from the Australian TV series "The Hollowmen".

The idea that the major target for welfare reform should be 18-25 year olds claiming housing benefit will unravel relatively quickly. Not because there aren't some abuses, but because once you remove those who are claiming housing benefit due to some family crisis of no fault of their own, or who moved for work and lost their job, or who have families of their own, or otherwise need support with housing if they are not to be out on the street, the cost saving will be relatively small. (Update: Grace Fletcher Hackwood does a good job of pointing this out here)

What a speech like this does do, though, is send a signal, not to welfare claimants, but to voters who do not claim welfare.

Like almost anything David Cameron proposes, today's speech makes much more sense when read as a political initiative than a policy solution.

Focussing on the need to cut welfare spending post 2015 does three useful things for the Conservative party.

First, it puts them on the side of the vast majority of voters. I don't like 'Pony' polls, but if you ask people if they think the deficit should be reduced by reducing welfare spending on the undeserving (ie: other people), they say yes. Just as they say yes to the argument tax avoiders should be punished, more houses should be built, the deficit should be cut and taxes reduced.

Second, it puts Labour in a difficult position. If Labour respond by appearing to oppose such proposals, they expose themselves to Tory attack. If they appear to support Welfare cuts, Labour face internal criticism and cede ground to the Tories. If they evade the question, they look weak and waffly.

Third, and least obviously, it hides the reason why deficit reduction after 2015 is needed in the first place. The reason for this, of course, is that the government is no longer on track to meet their original deficit reduction targets.

By proposing that Welfare Reform take the strain of deficit reduction after 2015, Cameron is able to point to a tough approach on both the deficit and welfare, without acknowledging that this is only needed because his original plan of expansionary austerity has run aground.

In the short term, Labour can rightly use the government's failure in creating jobs and growth to say that Cameron is missing the point.  It might be argued this response is a little evasive, but why should Labour allow itself to be boxed in by a proposal that hasn't even been made? Cameron's welfare reforms are fantasy politics, not hard policy. They should be treated with the appropriate curious scepticism.

That said, Cameron is showing Labour the path of the assault it will face. 

Labour will eventually require a better answer than "You what?" or "You don't know what you're doing". Because counter-intuitively, the government's failure to hit their deficit targets will be used to attack Labour.

After 2015, Cameron argue the UK will need to reduce the deficit further. He will point out, in all likelihood, that this extended period of spending restraint was broadly Labour's plan in 2010. If even sluggish growth has returned in three years time, many economists will support such an argument for deficit reduction.

Cameron will point to these sorts of cuts as his suggestion as to how the deficit will be reduced. Labour will be invited to say whether they would cut elsewhere, tax more or run a higher deficit instead. None of these options will be politically attractive.

If we are to win the next election, Labour need a good answer.

For me it lies in a switch of national resources towards investment and infrastructure and away from welfare and current spending. To achieve this, you will need to bring a much wider range of spending choices into play than those achieved by a crackdown, many of which are spending choices that go to those who are not suffering most.

In other words, the response to this sort of challenge is to respond that we need to go further, and more seriously in pursuing an agenda of public spending reform and and budget restraint, but that these should be used to fund national renewal, not just be a way to hit easy targets that make little difference to anything, other than the PMs decisiveness ratings. 

As the Hollowmen sketch suggests, however, this is unlikely to be a strategy that is welcomed with open arms by electoral strategists for any party.

Much easier to just launch a crackdown, eh?