It now looks almost certain that Labour will vote against the 1 per cent uprating for most working age benefits. Labour is pointing out that because this also includes tax credits, most of the people hit by this will actually be in work. The party hopes that this changes the political dynamic around this subject.
But, as a Liberal Democrat minister pointed out to me last night, the coalition can portray any attempt to uprate by more than 1 per cent as special treatment for those on benefits. The minister stressed that public sector pay was only going up by 1 per cent and the threshold for the 40p rate was, again, only being increased by 1 per cent.
The other thing the coalition will hit Labour with is how they would pay for uprating by more than 1 per cent. They’ll constantly demand to know what tax Labour would raise to fund it or whether they would simply borrow more. It’ll be another example of how Osborne intends to use his baseline advantage in the run-up to the next election.
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