The Tory Tax Credit cuts: observations and warnings and even a few ironies

It’s painful when the party you’d like to see in government is, in fact, in Opposition. But it’s even worse when it fails to oppose.

Not that opposition is useful for its own sake. We need to oppose government when it’s doing something unconscionable. Something like, say, the British Tory government’s decision to cut tax credits drastically.

These are not in fact related to tax. They’re simply payments to help those working poor who aren’t earning enough, and are more generous still to those who have children. One advantage of the system is that it makes sense to get into a job, even a low-paying one, rather than remaining in assisted unemployment.

Tax credits are generally credited with reducing child poverty in England from 35% of the child population to 19% over the fourteen years from 1998/99 to 2012/13 (twelve of them under Labour).

The Tories have decided that they simply cost too much. In their single-minded drive to cut the deficit on government spending, they have decided to reduce them massively. They never calculated the impact of their policies on the poorest, but the estimates there have been suggest a loss of between £1000 a year and £1300 a year, on average. For some, that could mean a loss of 10% of their income.

That’s for the poorest working families – and the stress is on working: these are the people for which David Cameron and George Osborne claim to speak, even to the extent of calling themselves the “new workers’ party.” We can’t afford to support these strivers, Osborne and Cameron seem to claim, so they must suffer. This at a time when there seems no end in sight to the growth of top salaries: between 2013 and 2014, the incomes (I refuse to call them “earnings”) of directors of Britain’s biggest companies climbed 21%.

It’s the inequity of this arrangement that is particularly shocking. The Tory view is that the economy has to be fixed. That’s not contentious. However, they feel that to fix it, the burden must be disproportionately borne by those least able to shoulder it. Meanwhile, at the top end of the scale, there is no sense of obligation to share in any of the pain but, on the contrary, an unfettered drive to take more and more – even though many of the organisations involved were responsible for the economic problems in the first place, through a crash caused by the irresponsibility of bankers.

Surely, if there were a time for an Opposition to oppose, this had to be it. And yet Harriet Harman, interim Labour leader until the September election of Jeremy Corbyn, let it be known in July that, with a heavy heart, she would back the Conservative plans. Sadly, expressions of sympathy, however well-meant, don’t actually feed children or prevent evictions.

So it was with some delight that I watched the Labour and Liberal Democrat peers, with a smattering of others, win a crucial vote in the House of Lords last night forcing the government back to the drawing board, to come up with plans to soften the impact of the tax credit changes. 

Ironically, it’s the House of Lords, home of a privileged elite
that had to take a stance against regressive policies

That leads to a number of observations, some not a little ironic, and a few warnings.

The first observations is that it’s good to see the Lib Dems doing some opposing. For the five years up to May this year, when the Tories won the election on their own, the two parties were in a Coalition government. Lib Dem Ministers tried to soften some Tory measures, but they naturally didn’t oppose them. They seem to have learned their lesson, after being slaughtered in the May election.

Secondly, following Harriet Harman’s weird stance in July, it’s good to see Labour too learning to oppose again.

Third observation: it’s a little sad that we had to rely on the House of Lords, an unelected chamber, to force the government to reflect a moment. The Tories have been swift to point out that the convention is that the Lords do not block financial measures adopted by the Commons. There is now talk from within the government about reforming the Lords, which is deliciously ironic: it’s the Tories who have most impeded Lords reforms down the years.

Fourth observation: such reform is badly needed, but not to shelter a Tory government from opposition. It’s nonsensical to have to rely on an unelected chamber of parliament to scrutinise and question government policy. We should move towards elections to a revising chamber in Parliament, and then increase its powers to challenge government, rather than reducing them. Will the Tories move in that direction? It’s probably best not to hold your breath. 

In passing, I ought to point out that supporters of the move in the Lords argue that they were within their rights. Frankly, the technicalities hardly seem to matter. The fundamental point is that the measure needed opposing, and they did.

Now for the warnings. 

The government will have to reconsider its approach. That doesn’t mean it’ll drop it. George Osborne has already announced he’ll press forward with the cuts anyway, even if he softens the blow a little.

Secondly, it has left George Osborne with a bloody nose and made the government look inept. That, however, won’t have a lasting impact on its grip on power. We’re still four and a half years from an election. In 2012, Osborne put forward such an incompetent budget that it came to be known as an “omnishambles”. Three years on, his party won a majority on its own.

Thirdly, Labour has to show that it’s learned the lesson and will keep on opposing. It shouldn’t sit back and wait for the Tories to slip up, as happened under the previous leadership, of Ed Miliband and Ed Balls. The blows need to keep landing, or the Tories will turn things round in their favour again (see the second point above).

Still, for all that, I can’t deny that it’s an unqualified joy to see an Opposition learning to oppose again. 

We’ve missed you for the last five years, Oppositionists. Good to see you’ve found your tongue again. This time – don’t forget you have one.