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[/audioplayer]Chris Leslie has just briefed journalists on Labour’s response to the Budget. In summary, it’s all quite difficult. Leslie repeatedly used that word when asked about individual measures such as the benefit cap and public sector pay, while also saying that Labour didn’t want to be a knee-jerk opposition which opposed everything.
The key themes of the Labour response are that the changes to tax credits represent what the Shadow Chancellor deems a ‘work penalty’. His calculations are that a lone parent with two children working 16 hours a week on the minimum wage would gain £400 from the move to a living wage, but would lose £860 from the changes to tax credits. A couple who were both on the minimum wage full time and had two children would lose over £2,200 next year from the tax credit changes, but gain £1,560 from the living wage change. Leslie said:
‘There are lots of changes to the tax credit regime, disregards, thresholds, tapers, the freeze that is now going to be for four years and not two, they promised in the manifesto it was going to be just two year freeze on the working tax credit, that has now been extended to four years, so there’s a manifesto issue they’ve got there, I think taking it as a whole, that’s why I think it adds up to a work penalty, and that to me is the opposite of what you should be doing because effectively you need this support to make employment stack up and an option for people, this isn’t going to bridge across because of the minimum wage changes in that way.’
So it looks as though Labour’s effort will largely focus on the tax credit changes. It will not oppose the benefit cap, because Leslie says that it is quite difficult to justify people getting more on benefits than they do in work. It will not oppose limiting public sector pay increases to 1 per cent each year, with Leslie saying:
‘I don’t feel as though, you know, we should change our position, where we were on public sector pay restraint… It is very difficult… Look, I think we have got to weigh up some of these changes and be more thoughtful in the way, you know, don’t just literally oppose everything, as Harriet was saying, tempting though it might be to oppose everything, I think it is, you know, we don’t want to see public sector jobs being lost in the way that would happen if you found departments rising, choosing to raise pay, but making people redundant and that is a very difficult and somewhat invidious choice for those departments, but ultimately I think a level of restraint is probably necessary.’
The benefit cuts that he seems at least keen to examine with a view to potentially objecting to something in their design, if not oppose the cut, include changing the rate paid to employment support allowance claimants who are in the work-related activity group. Leslie said this could end up being a ‘false economy’ whereby the bill goes up because claimants are moved from the WRAG to a group where a higher rate is paid. Leslie described it as ‘quite worrying’.
But overall, it looks as though Labour will mount very little opposition to the welfare changes, save on the tax credits.
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