We already knew that welfare would be a key dividing line for George Osborne at the next election. He set up the dividing lines in the emergency budget and comprehensive spending review in 2010, and they have largely stuck, which is a testament to the Chancellor’s skill as a strategist. But at today’s Treasury Select Committee, Osborne thickened those dividing lines with Labour by saying that the welfare budget must take another billions of pounds’ worth of cuts. It was the language that Osborne used, as much as anything else, that revealed how the 2015 debate will pan out. He said:

‘My view is that welfare expenditure cannot be excluded from the difficult decisions that need to be made. If you want to maintain the same pace of reduction in government spending that we’ve had over this Parliament, rather than accelerating it, then you’re going to have to find billions of pounds of welfare savings.’

He also said:

‘Anyone who wants to be honest with the British public about dealing with the deficit, making sure we maintain public services at a sufficient quality should also be honest about the welfare savings that are required and of course the welfare cap… would be a great way to have that debate.’

Let’s have a look at that in more detail. For Osborne, cutting welfare isn’t really a ‘difficult decision’, unless it involves trying to persuade Nick Clegg to agree to something. That’s why David Cameron named welfare as one of the items in his ‘little black book’ of areas where the Coalition has frustrated the Conservatives. It is electorally popular and an easy target (although slightly less easy when you consider how much of the welfare budget is made up by pensions).

But that phrase ‘difficult decisions’ is a message to voters that anyone who doesn’t look at welfare isn’t facing up to reality, or, as Osborne then said, being ‘honest with the British public’. Which is exactly the warning the Conservatives want to send about about Labour, who they are branding ‘the welfare party’ for 2015. It’s why the Chancellor was so happy that Brooks Newmark brought up what he described as the relative generosity of the £26,000 benefit cap for workless families: most Conservative MPs say the complaint they hear most about this policy from constituents is that the cap is not low enough. Osborne told Newmark:

‘The level of the cap has been set. I think it was set in a fair way, of course it’s open to debate and open to future governments to change the level of the cap… I think the level of the benefit cap will continue to be a subject of fierce debate.’

Tags: George Osborne, Labour, UK politics, Welfare