George Osborne: being buried by his own poll tax?

Tory proposals to cut tax credits, benefits to help the poorly paid survive, are “a mistake on a par with the poll tax,” according to Gordon Brown.

Brown, Labour Prime Minister until he was defeated in the 2010 General Election, tends to limit his public interventions. So it’s a measure of how important he feels the attack on tax credits is, that he’s spoken up now. And it’s telling that he compares this Tory policy to the poll tax: it was the measure that Thatcher brought in towards the end of her tenure of office, and which ultimately broke her. Unpopular in the country, it wrought consternation among her own members of parliament who saw it could cost them their seats, so they brought her down.

Gordon Brown:
elder statesman denouncing Osborne's onslaught on the poor

There are times when, as Brown suggests, it seems the tax credit cuts may do the same for George Osborne. He’s Chancellor of the Exchequer now, but has aspirations to succeed David Cameron as Prime Minister. An adverse vote by the House of Lords, which usually refrains from reversing decisions of the Commons on financial matters, forced Osborne back to the drawing board on his cuts. But now even Conservatives are questioning whether they’re acceptable, even if introduced more gradually and reduced in scope.

The Parliamentary Select Committee on Work and Pensions, despite its Tory majority, has called on Osborne to consider postponing the cuts for at least a year to consider other options, if he can’t mitigate the effects of the cuts adequately.

And a Tory MP, Stephen McPartland, boycotted a visit by a Treasury Minister and fellow Tory to his constituency this week, because the Minister refused to discuss the cuts. McPartland had calculated that a family on £20,000 a year, well below the median income for the country but well above the lowest, is likely to lose £2000 a year under the proposals. The government maintains that it’s committed to supporting strivers rather than skivers, but this would be a striving family that would suffer a major blow from Osborne’s policies.

When opposition begins to build within the Conservative Party itself, it seems that as well as a rod for backs of the poor, the Chancellor may well be building one for his own. The next election is still years away, and the Tories may weather this storm and suffer no lasting damage from it. But at least they are, for now, being put to the rack for policies which are inflicting real suffering and which they clearly hadn’t thought through.

That’s another parallel with the poll tax. It was a flat rate tax to support local government. Because it was the same for all, it disproportionately hurt the poor, as the tax credit cuts will. And Thatcher didn’t fully think it through: she had reached the point of believing so firmly in her political instincts that she insisted on pressing ahead with the measure, against the advice of most of her entourage. Until she paid the price.

We’ll see whether Osborne is able to show a little more flexibility. Or will pay the same price.

That will depend on whether he presses on with the tax credit changes. Ironically, most of us, including no doubt Gordon Brown, would be delighted to see the payments falling away to zero. Since they are earnings-related, they would wither away as people earned more. Brown would not doubt be keen to see wages rise in that way. Meanwhile, the Tories claim they want to see us becoming a high-wage, low-benefit economy. Indeed, that’s become a slightly monotonous refrain of theirs these days.

Well, raise the wages and the benefits will, automatically and inevitably, fall.

What’s interesting is that Osborne wants to cut the benefits by direct government action. In other words, he doesn’t himself believe in the “high wage” part of his mantra – if wages were rising as he claims to wish, he wouldn’t need to reduce the benefits himself. They would fall of their own accord.

All of which rather suggests he doesn’t believe his own words. In turn, that suggests that no one else should either. And, what’s more, if his proposals turn into his version of the poll tax, and come back to bury him – well, it could hardly happen to a more deserving fellow.