Tuesday 21 December 2010

LibDems in truth telling scandal

The Telegraph has a few more what LibDem ministers really think of the Coalition revelations.

As with Vince Cable, who has only the consolation of this blog's support, the LibDems are being pilloried for the mortal political sin of telling the truth. The Telegraph has more revelations to come in the days ahead (though one would have hoped it would play straight by also eavesdropping on Liam Fox and other Tory ministers).

* Ed Davey warns that the government's changes to housing benefit would "put people below the breadline", something which he calls "deeply unacceptable".

Nobody could seriously claim that it isn't true that the HB changes will increase adult and child poverty - the Institute for Fiscal Studies calculates the housing benefit changes will increase child poverty by 100,000.

Moreover, while the government claims its policies will lead to no net increase in child poverty, the IFS finds that "the discrepancy is entirely accounted for by the fact that IFS researchers have considered the impact of the government's planned reforms to Local Housing Allowance on poverty rates, whereas the Treasury did not".

It is good that Davey thinks that some of the changes are "unsupportable".

He particularly singles out the arbitrary, top down, one-size-fits-all 10 per cent reduction in housing benefit after 12 months. (Davey says he finds two of the five changes to housing benefit "unsupportable", but the Telegraph audio does not identify the other).

There are five changes to housing benefit and there are two I find unsupportable.

One which would come in in 2012-13 is where if you were unemployed for 12 months and you were still passing the government test which is actively seeking work to get jobseekers' allowance, which is £80 a week, something like that, so you can eat, you have to show you are looking for work. So imagine somebody who has been unemployed for 12 months, you are passing the actively seeking work test, the government is saying your housing benefit will be cut by 10 per cent just because you have been unemployed for 12 months.

I don't understand why. You are on the breadline, you've been trying to look for work, you've been passing all the government tests [about actively seeking work], and suddenly you're going to have your rent, which is your highest cost, your help with that, taken down by 10 per cent. No logic behind that whatsoever ... So the system doesn't work but I don't think you kick people when they are down.

That is a very effective, clear and pretty unanswerable critique of government policy, albeit from a government minister, and Davey should be congratulated for its clarity.

This blog, back in June, immediately identified this arbitrary and illogical measure - which saves only £100 million - as a natural issue on which Simon Hughes and LibDem backbenchers should press for change, with Labour and civic non-partisan support.

It is good that Ed Davey agrees about that from within government. It is very unlikely he has many colleagues who disagree. But, with his comments about the policy being wrong and illogical having been made public, he may well now come under pressure to resign over the issue if the measure can not be changed.


Scottish Secretary Michael Moore says the child benefit cut was "blatantly not a fair or consistent thing to do".

Again, it is difficult to disagree with that.

Welfare minister Steve Webb wrote to the Chancellor to complain because "the details aren't right".

Indeed. The policy is a complete mess - for at least 10 reasons. The much under-discussed 100-300% marginal tax rate problem is one reason why it is difficult to see it being implemented.

(Webb had, with my encouragement, quashed a Clegg-Cable plan to ditch LibDem support for universal child benefit at the pre-election party conference in Autumn 2009, which is why both governing parties were breaking clear election promises with the Osborne shock announcement).

The Telegraph report confirms that a number of LibDem government ministers knew nothing about the child benefit change before it was announced - demonstrating the back of the envelope nature of the botched announcement - but it was already pretty clear that the Tory Home Secretary didn't know much in advance either.

Ed Davey says he was "gobsmacked" - not least because he will lose £1000, which might not be the best of objections. But, with child benefit being paid primarily to mothers, I rather suspect Mrs Ed Davey might be among the disillusioned LibDems who wonder whether or not they can influence this Tory-led Coalition.


MatGB said...

Heh, Mrs Davey is unlikely to break ranks right now, not now she's on the list for the GLA elections (www.emilydavey.org.uk).

But yeah, the only thing this really does is shut up those, um, slightly less thoughtful individuals who seem to think ministers should spend their entire time fighting in public.

I'm not keeon on collective responsibility being as strongly enforced as it is, but hard to break such a convention overnight, especially if working with Conservatives.

Lib Dem ministers state the obvious shock. Torygraph confirmed as hypocritical deceitful standards free journalist haven.

Nothing we didn't already know.

Sunder Katwala said...


Thanks for your comments. I hadn't heard of Emily Davey, but her biog and housing expertise offers some clues as to why Ed Davey might be well informed about the impacts of the housing benefit changes.

I haven't seen or looked up polling on whether/how far there are gender differences in responses to either child beneiit or child tax credit changes. Andrew Haldenby of Reform is a major advocate of means-testing benefits, against the Fabian argument for universalism often put by our Research Director Tim Horton. I remember when he was in the Newsnight Dragons Den, he admitted that he wasn't able to convince his wife of his proposal!