Labour ready to fight Osborne as benefits squeeze proves unpopular

George Osborne has failed to win the support of a majority of the public for his decision to squeeze most state benefits, according to a survey for i.

When the Chancellor announced this month that most benefits and tax credits would increase by a below-inflation 1 per cent for the next three years, the Conservatives were confident that the move would be highly popular, supported by a clear majority of the electorate.

But according to ComRes, the public is split down the middle. While 49 per cent agree that the Government is right, a surprisingly high 43 per cent disagree and 8 per cent say they don't know. The Benefit Uprating Bill will be published today and Labour will oppose it in the new year.

The squeeze on benefits is less popular among women than men. While men support Mr Osborne's decision by 52 to 43 per cent, women back it by a smaller margin – 47 to 44 per cent.

Although seven out of 10 (69 per cent) Conservative supporters agree with the decision, it is opposed by a majority of current Labour voters (54 per cent) and Liberal Democrat supporters (65 per cent). The basic state pension is not affected by the squeeze and will go up by 2.5 per cent in April. Despite that, those aged 65 and over oppose the below-inflation increase for most other benefits by a margin of 46 to 41 per cent.

Mr Osborne, who has positioned the Tories as on the side of "strivers," told his party's annual conference in October: "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?"

Some Labour MPs have expressed fears that their party would be walking into a trap set by Mr Osborne by voting against the benefits squeeze. However, senior Labour figures believe opinion is changing because 60 per cent of the people affected by the clampdown are in work and receiving tax credits, not unemployed.

Liam Byrne, the shadow Work and Pensions Secretary, said: "People are starting to see through George Osborne's attempts to play politics with social security. The bottom line is this Government has failed on jobs, put up the dole bill and is now taxing strivers to pay for their failure."

Yesterday David Cameron defended the 1 per cent rise in benefits, admitting it was "difficult" but pointed out that tax credits and public sector pay would increase by the same amount.

Labour will mount a new year campaign contrasting the below-inflation rises with Mr Osborne's cut in the 50p top rate of tax on earnings above £150,000, which takes effect at the same time next April.