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The perils of giving in to pester power

The Independent, October 11th 2010

Their only hope is to resist any temptation to trim, compensate, or back down. If ministers reward those who shout loudest, the cacophony will become unbearable

As an object lesson in how not to announce the first of many painful cuts, last week could not have been better. “It’s like the sixth-formers have taken over the staff room,” was one Tory MP’s verdict. If George Osborne had bothered to ask the Cabinet first – or even the relevant minister, Iain Duncan Smith – he would surely have been warned that stay-at-home mothers would feel unfairly penalised by losing their child benefit. Instead he produced a half-thought-out policy whose failings have dominated the news agenda for a week.

That said, the worst sin of all was to wobble when the uproar came. For the whole of last Tuesday, David Cameron was on and off our TV screens, mumbling about using transferable allowances to mitigate the worst of the unfairness. This was complete tosh: the Liberal Democrats won’t vote for those allowances anyway, and bringing them in would cost almost as much money as the benefit cut saves, while giving parents back only a small proportion of what they’ll lose.

Critically, though, it showed a government losing its nerve. If ministers wobble like this on the first £1bn, what will they do with the other £82bn? Last week, scientists protested outside the Treasury, singing, “Hey, Osborne, leave our geeks alone,” to the tune of Pink Floyd’s “Another Brick in the Wall”. There will be hundreds more such marches to come. Child benefit was only the beginning, and ministers should have started as they meant to go on.

When Margaret Thatcher won power in 1979, she knew she had to take on the unions. Many people thought this was impossible. Her only hope was to be utterly resolute and never give in to strikers, however much disruption they caused and however much public sympathy they won. In the end, it worked. Trade unionists realised that there was no point trying to grind her down.

You only have to watch Supernanny to understand the psychology. If toddlers learn that by making enough fuss, they will get what they want, what do they do? Shout and scream until Mum or Dad gives in. I am amazed that Cameron – father of four – didn’t know from experience that he had to apply the tough, consistent rule of parenting to the squeals of the Daily Mail and Telegraph.

The next test will be tuition fees. Lord Browne’s report comes out tomorrow and there will be more pained yelps from the middle classes. To which the only sensible reply, given with an affectionate smile, will be “Tough”. I speak as the mother of one child who has just started university and another going in two years’ time, so this isn’t an unfeeling response to other people’s pain. But we really are in all this together and it can’t be right to trim back benefits for the poorest without asking higher earners, including graduates, to take a hit too.

Here, though, the politics get trickier. Higher fees are a neuralgic issue for the Liberal Democrats. Vince Cable, who – like his colleagues – signed the NUS pledge during the last election campaign to vote against higher tuition fees, is now charged with bringing them in. He plans to mitigate the effect by making higher-paid graduates pay a higher rate of interest while poorer ones continue to pay the subsidised rate. He had hoped that the NUS, which has been surprisingly pragmatic in negotiations, would support his proposals and let all those Lib Dem MPs off the hook, but the NUS leader, Aaron Porter, has proved hard to persuade. That makes life very difficult for MPs like Sir Menzies Campbell, who not only signed the NUS pledge but is now Chancellor of St Andrews University.

Many Lib Dem MPs represent university seats, but this may not be quite the problem that they fear. Ministers are going to exempt from the new fees any student already at university or who starts before the new regime begins in 2012 or 2013. And, while the NUS will oppose the higher fees, it will support the progressive repayments.

The Government also plans to make universities prove that they are doing all they can to broaden access to pupils from poorer backgrounds before they are allowed to increase fees. But, as we report today, as many as 30 Lib Dem MPs are minded to vote against higher fees; Cable’s job is to convert those votes into abstentions.

Meanwhile, next Wednesday brings the biggest test of all: the comprehensive spending review. The furore over child benefit will be as nothing compared to what is brewing. The Government’s only hope is to be “bloody, bold and resolute” and resist any temptation to trim, compensate or back down. If ministers reward those who shout the loudest, the cacophony will become unbearable.

For instance, they will almost certainly have to abolish the Winter Fuel Allowance, which goes to all pensioners, or restrict it to the very oldest or poorest. One senior Labour ex-minister told me in Manchester that he was amazed it still existed. It was only brought in to win back popularity after Gordon Brown raised pensions by a derisory 75p. Free bus passes and TV licences are also hard to justify for better-off pensioners.

How will Labour react to all this? Ed Miliband found himself in the extraordinary position yesterday of explicitly defending child benefit for millionaires: in other words, falling into Osborne’s trap. If he is going to oppose a cut in benefits which is broadly popular and – in terms of its progressive effect – fair, then which cuts is he going to support? Assuming he stands by Alistair Darling’s plans to cut the deficit by half in this Parliament, he should logically support half the Government’s cuts or suggest others of his own. He can’t make up the difference simply by taxing bankers more.

Miliband’s steadfast commitment to universalism is going to prove uncomfortably hard to sustain. The Tories can easily argue that, to retain the middle classes’ support for the welfare state, it is enough to offer them free health and education, a state pension linked to earnings, and help if they lose their job. Apart from pensions, which are a contributory payment, it is time they were weaned off cash benefits. As several Conservatives said to me last week, the middle classes can hardly complain about welfare dependency when they’re dependent on benefits themselves.

Then there is Labour’s reaction to the tuition fees proposal. Miliband confirmed yesterday that he supported a graduate tax, but he followed this by saying, “I’ll work with anyone in the House of Commons who wants a progressive system of student finance.” Since that’s exactly what Lord Browne will propose and Cable will endorse, it will look odd if Labour opposes it. Moreover, as Miliband conceded, it was Labour that set up the Browne review. And, in Alan Johnson, he has a shadow Chancellor who knows all the many pitfalls of a graduate tax and who brought in variable tuition fees in the first place.

Even if tuition fees are neutralised by Labour support, though, there will be other unexploded bombs in the spending review. The most contentious cuts may be the hardest to predict. Oliver Letwin talked to the former Swedish Prime Minister, Carl Bildt, recently and asked for advice on the Swedish experience. Bildt told him that his most controversial cut turned out to be something that the government had never foreseen: support for local football clubs. The ensuing row ran for months in the papers.

Cameron has to expect the “unknown unknowns” to cause trouble. But what he can’t afford to do is look irresolute. He has psyched up the nation for big cuts and, despite that, has seen his poll ratings rise. People know it is going to hurt but, like jumping into the North Sea, after the first few minutes of agony, you feel strangely invigorated. The voters know it’s time for a purge. They are ready for it. They just want to get it over and done with.

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