Tory Tax Credit Stupidity

It's proven to be the closest shave of Dave's second term and would have thrown the government into chaos had the ayes won it. Tonight's vote in the Commons, brought before the House by Labour, saw the noes (i.e. keep the cuts to working tax credits) win by 317 to 295 - a tiny sliver of a margin. This is despite Tory luminaries like Boris Johnson weighing in against the cuts, and Heidi Allen - new Tory member for South Cambridgeshire - using her maiden speech to strongly intone that "to pull ourselves out of debt, we should not be forcing those working families into it." And yet talk of a Tory rebellion proved to be tough talk, no trousers. To a woman and a man our would-be insurgents lined up behind George Osborne and endorsed the policy they had spent all day attacking. We always knew their workers' party rhetoric was flim-flam, but the Tories are going to have a tougher time selling that now.

While the decision to announce Seumas Milne's appointment as Labour's new head of comms deflects media attention from the government's difficulties, away from Westminsterland the tax credits cut will, is, eroding the support won by the Tories' round of promises and scaremongering back in May. According to Labour's research, the numbers set to lose money and their geographical spread puts some 70-odd Tory seats at risk. 2020 is a long way away, but voters do not forget. Small business people like Michelle Dorrell, whose brief Question Time intervention made a very big political splash, aren't supposed to be punished. There is some question whether she will directly see a cut, but she's well aware that many of her customers will be so affected and that places her livelihood in some jeopardy. Whatever happens, the stress and anxiety Michelle has experienced won't slip her in a hurry.

And this is problematic for the Tories. The Conservative love-in with the Liberal Democrats did many dark things, but they were choosy about their victims. Seizing hold of the neo-Victorian distinction between the deserving and undeserving poor that had been circulating in the press and policy documents for years, Dave and his little yellow friends set about making the poorest pay for the 2008-9 crash. But those poorest were the ones at best unseen, at worst despised. The unemployed, the disabled, the single parents, the long-term sick, people in social housing, people needing council tax support. Osborne anticipated Labour would have problems opposing Tory/LibDem attacks seeing as the party had gone along with scrounger rhetoric at least since His Blairness was at the helm, and that antipathy toward the undeserving poor was, perversely enough, most acute among the "deserving", working poor - the supposed bedrock of Labour's support. To batter the poorest and most vulnerable for electoral gain, it was some of the most disgusting cynicism seen in recent years (though there was a bit more to it as well).

Yet Osborne, the alleged "political genius" responsible for the coalition of voters that gave him and Dave a majority, has now sprung a trap on himself. He's forgotten that while you can get away with grinding the "undeserving" into the dirt with nary a comment, let alone protest; taking on the working poor is another matter. When you go out to work, you do the so-called "right thing", to be penalised for such is just not on. It threatens to blow away those wispy myths sometimes referred to as Tory principles, it cuts at the party's self-help ethos, it stamps on the hand up/not-a-handout approach to social security. Small wonder so many on the right are up in arms. More importantly, it's making Tory voters not necessarily affected queasy. One voted Tory to sort out the fag-smoking pushchair-pushing scummy mummies always down the offie, not one's personal trainer, one's window cleaner, one's hairdresser. Osborne has proven adept in building a coalition alright, a coalition ranging all the way from the Trotskyist far left through the mainstream parties, to hard right ideologues and the ever-opportunistic "libertarians" in UKIP opposed to his policy.

The Tories have a record of being political stupidity, but usually that's a result of their being entirely shortsighted and not thinking through the medium and long-term interests of their own party, and the sections of British business they represent. On this occasion Osborne is set on machine gunning his own foot. That said, there is an element of "necessity" in what the Tories are trying to do. When Dave and co. exclaim the virtues of a low tax, high waged, low welfare economy they mean it: this is their objective, the tiger in their politics tank. In the long-run they think people who get by with the help of tax credits will benefit. Without the state subsidising employers, wage rates would have to adjust properly to their "natural" level, which is way above where they are at present - a point on which most of the left would agree. Hence the comparatively large minimum wage rise, but other indirect subsidies to employers - such as raising income tax thresholds so workers' (low) wages can go a little bit further. Typical of the Tories though, they're handling it in a brutal, stupid way. Yes, some people would suffer in the short-term but we know what's best for them in the long-run is the not-so-subtle message Tory ministers have so far communicated.

That is the background, but also there's Osborne's leadership ambitions. He absolutely has to dig his heels in and tough the policy out. As one half of a duo that think themselves "strong" and capable of taking "difficult" decisions, carrying tax credit cuts through in the teeth of internal, press, Labour, and wider opposition burnishes, in his eyes, his leadership credentials. Silly George, little does he realise that convincing leadership is about winning minds and getting people to follow because they believe, not because you can bulldoze your way through regardless. Still, if he wants to sacrifice the electoral wellbeing of his party on the altar of his career, I'm not about to stop him.

And so the Tories are in a pickle entirely of their own making. Electoral punishment of some sort will be administered, and they've gone toxic to a whole wave of people they need to win over permanently if they want to win again. Yet at no point can Osborne pull out, lest his chances as Dave's successor be torpedoed. Their position is weak, they can be forced to retreat in the face of the chancellor's intransigence, and that is up to whatever pressure we can bring to bear.