Robert Walpole is reckoned to be the first ever British Prime Minister. His most memorable quote was his acerbic response to the public rejoicing which accompanied the outbreak of the “War of Jenkin’s ear” in 1739. “Now they ring the bells, soon they will be wringing their hands.”
The quote came to mind when I saw the reaction of Tory MPs to the Osborne Budget. The centrepiece of the Budget was a real headline grabber the introduction of a new national “living wage” initially at £7.50 an hour for those of over 25. This new rate is planned to rise to £9 by 2020.
The Tory MPs love the discomfiture and growing irrelevance of the Labour Party. Osborne’s “living wage” surprise was higher than Labour were promising during the election campaign.
Indeed, it was almost exactly what the SNP had proposed for the minimum wage during the election. This was the Tories reborn as the “workers’ party”.
Scotland has hundreds of thousands of low paid workers. However, there are now proportionately less people stuck at the very bottom of the wage pile than the UK, thanks largely to the introduction of the living wage throughout the public sector by the SNP in 2011. That real living wage is now worth £7.85 an hour.
So Osborne’s commitment doesn’t match Scotland’s existing living wage but because it is compulsory it still represents progress in the battle to raise the status and dignity of work. Or at least it would if it were not for a substantial sting in the tail.
Osborne intended it to steal the show and it did, oh how the Tory benches cheered and waved their House of Commons Order papers. Osborne’s stock as Cameron’s successor is rising.
No one disputes the Chancellor’s cleverness. However the euphoria did not last long. Because accompanying the new national living wage is a mass withdrawal of benefits for working families. It has become clear that the withdrawal of in work benefits will for most families overwhelm the impact of the rise in living wage income.
There is to be a four year freeze in tax credits and working age benefits from 2016, including child benefit. The income threshold in tax credits will be reduced and, as income rises, the rate of withdrawal of credits will be increased.
Overall some three million families across the UK will lose up to £1,000 a year with the Tory Party balancing the books on the backs of the lowest paid people in the country. These families will notice that Osborne has picked their pockets.
In England they will ask their Tory representatives why they were celebrating as the Chancellor robbed them of their family income. That is why the Budget cheers will come to constituency jeers and Tory MPs will end up hand wringing rather than bell ringing.
In Scotland more people will question why we are still at the mercy of Westminster decisions. The Budget will remove £1 billion pounds from Scottish families. The puny new powers proposed for the Scottish Parliament would not scratch the surface of protecting people from such a dramatic change. The demand for powerhouse Parliament will become irresistible.
In the context of so many families losing out then the impact on George Osborne’s own political career seems a minor thing. However those who are talked up in the immediate aftermath of a clever Budget often come down to earth with an almighty bump.
There is another political phrase of more recent vintage than Walpole, which may sum up Osborne’s prospects. There is a traditional suspicion of political manoeuvres which unravel as the consequences become clear.
The Chancellor was indeed clever: “too clever by half!”