Editorial: Only now will the scale of austerity start to be felt

The welfare bill will rise. The question is where the axe falls, and whether it falls fairly

Share

Given the scale of the Coalition’s cuts programme, the British public has, on the whole, been remarkably quiescent.

There has been some resistance: the odd anti-austerity march, for example, and the odd strike. But polls suggest that, although voters’ faith is beginning to be ground down by evidence of economic torpor, the majority still consider that – with the Treasury struggling under unaffordable debts – retrenchments must be made.

So far, though, the discussion has been a largely theoretical one. In practice, government belt-tightening has focused on (largely invisible) cuts to capital investment. Only now – on Monday – do the welfare reforms put in place after the 2010 election come into effect. Only now, therefore, will the social impact of austerity begin to be felt.

The changes are far from nominal. One of the most high-profile is the abolition of central government-funded council tax benefit – leaving more than two million of the poorest households worse off by an average of £140 a year, according to poverty campaigners. The disability living allowance is also to be replaced – by a system which could see half a million disabled people lose out, say disabilities charities. Meanwhile, a cap will limit the amount that any one person can receive from the state (with potentially profound implications for social diversity in, for example, high-rent central London) and those in social housing will take a hit to their benefits if they have a spare bedroom.

This is no unquestioning defence of the status quo. Welfare now accounts for almost a third of public spending, and the bill will only rise as the population ages. Such commitments are unaffordable. The question, though, is where the axe falls, and whether it falls fairly.

That the abolition of the 50p tax rate also takes effect next week hardly helps. The principle may be the right one – evidence suggests that avoidance of high taxes undermines their benefit to the Treasury. But the Chancellor’s decision to bring down the top tax band just as his Government is instituting benefits reforms that might, for example, hit disabled people in as many as six different ways is truly atrocious politics. For all that the Opposition will take advantage of the opportunity to lambast a “tax cut for millionaires”, however, Labour has not yet spelled out a credible alternative.

There are signs that may be changing. In an interview with this newspaper today, Ed Miliband acknowledges that, when it comes to the economy, his party needs to do more than just criticise. Some progress has already been made, with hints of a reintroduction of the 10p tax rate (a bad idea) and the creation of a mansion tax (a good one). But more must be done to clarify which cuts are deemed acceptable, and where extra spending is to come from, if the Opposition is to play a meaningful role in the public debate.

Nor are such questions purely retrospective. This summer’s spending review needs to slice another £11.5bn out of Whitehall’s budget for 2015-16. Theoretically at least, welfare is safe; that, at least, was the Liberal Democrat caveat when signing off George Osborne’s decision to hold benefit rises at a sub-inflationary 1 per cent for three years. But with pressure from Cabinet heavy-hitters, including the Home and Defence Secretaries, rising, that might yet change.

Perhaps, in fact, it should. As things now stand, disabled people look set to bear a disproportionate burden. And the bedroom tax is hard to justify when, for example, it penalises those with secondary custody of their children. Yet the Prime Minister remains committed to universal benefits for the elderly, and some budgets, including foreign aid, remain protected.

Such arguments will be harder to make than ever as the welfare reforms take effect. Indeed, the debate about cuts is only just beginning. The Coalition will be defined by austerity; only on Monday will that legacy begin to take shape.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Read Next
Nicola Sturgeon and her former boss Alex Salmond  

I voted Yes in the referendum – but that doesn't mean I'm going to vote for the Tory-esque SNP

Alasdair Clark
 

If I were Prime Minister: I'd shrink the gap between the highest and lowest paid

Marina Warner
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power