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Coffee House

George Osborne’s Budget elephant trap is still open and waiting for Labour

20 March 2014

9:32 AM

20 March 2014

9:32 AM

Yesterday the Opposition didn’t really do all that much opposing. Labour announced it was going to vote in favour of George Osborne’s AME welfare cap, with Ed Balls arguing that Ed Miliband had set this out in a speech last year anyway. This cap was supposed to be an elephant trap for Labour, but Labour initially appeared to have tip-toed around the edge without falling in. But Osborne has set a secondary snare for the party: the ‘bedroom tax’.

The Conservatives are keen to point out that restoring the ‘spare room subsidy’ would lead to a £465 million welfare spending rise in 2015/16, and want Labour to answer how they could avoid breaching the welfare cap. Ed Balls argued on Today that restoring the subsidy could actually save money because it is such a clumsy policy that it ends up costing more either through higher housing benefit payments to tenants forced to move to the private rented sector or through the costs of homelessness.

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Even privately Tory ministers accept that it’s not the worst policy for Labour to repeal: some call it ‘Lord Freud’s idea’ while another recently accepted to me that ‘it’s only popular if you ask the right question about it’ (which could be said for a number of unpopular measures).

But the question is valid: how would Labour cut welfare spending to stay under the cap? And thus the welfare cap trap stays open and the party needs to work out how not to fall into it.

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