George Osborne has talked about spending cuts for months. Now, voters will finally learn what he means, writes MARK HENNESSY
GEORGE OSBORNE is facing a difficult balancing act. He must cut billions from public spending; endeavour not to drive the economy into recession; lay down the seeds for a recovery led by private business; and at the same time ensure he does not destroy the Conservatives’ chances of getting re-elected.
The need to prevent a repetition of last year’s £155 billion deficit means he has tough choices. Yesterday he revealed his plans to cut child benefit for “well-off” families, though many will disagree with his threshold of a £44,000-a-year (€50,000) salary. The move will cost a couple with one child £1,055 a year, or £2,500 if they have three.
Politically, it is fraught with difficulty. Osborne believes it will affect 1.2 million families, though others put the figure at three million. Equally, there will be unfairness: one-income families above £44,000 will lose out, two-income families earning the same amount will not.
Workers on the income border-line may lose in real terms if they accept a wage rise or promotion. Women in difficult relationships will also be affected when the change is implemented in 2013, as it is the only benefit paid directly to them.
Osborne carefully leaked details about his middle-class child benefit cut; but when the official announcement was made it was softened with a “wolf whistle” declaration that he also intended to place a maximum cap on household benefit for jobless families so that no one on welfare gets more than the average working family, unless they are disabled.
The cut will affect 50,000 families, costing each on average £93 a week. However, some families – those referred to as “welfare scroungers” in Daily Mail stories – could lose up to £300 weekly.
Within minutes, Osborne aides were out to explain the detail, and acknowledged that some families living on household benefits in central London and other expensive areas may have to move out to other areas once their benefits are cut. These cuts will be on top of others already announced.
The press gallery immediately joked that Osborne, by “clearing the poor out of Chelsea” was attempting his own version of the Highland Clearances – the forced expulsion of Scottish highlanders begun in the 1760s by Admiral John Ross of Balnagowan Castle, who replaced crofters with more profitable sheep.
“It’s perfectly fair. How could it not be? How can it be fair when hard-working families have to live far outside of London and commute in every day, when those who have never worked, who rely entirely on benefits, can live in the centre of town,” said one Conservative staffer.
However, the measure brings with it its own problems, since local authorities are obliged to house such families. If they move to less expensive districts, the local authorities there will be responsible for them, and few councils will be volunteering to take them on.