by Jonathan Todd
Ten years since 7/7. Ten years since London won the Olympics. Ten years since Robin Cook was telling Labour party events that he was meeting people whose fortunes have been transformed by tax credits, but who don’t realise that they have the (then Labour) government to thank rather than some obscure administrative change at the Inland Revenue.
While the Labour government did good, Cook argued, it was not credited with having done it, as it was done by stealth. The tax credits architecture that Gordon Brown quietly built, and which helped the UK to an impressively robust employment performance, even after the financial crisis, was loudly dismantled in George Osborne’s Budget.
Where New Labour reassured business, while using state levers to redistribute with minimal fanfare, Ed Miliband was a Labour leader eager to have business do more. Whether Osborne would have found it harder to take an axe to tax credits if Labour had trumpeted them as bullishly as Cook preferred, as well as whether Osborne would have been in the position to do so had Miliband more assiduously courted business, are imponderables.
As Osborne warmly embraced Iain Duncan-Smith’s welfare reforms to declare himself the bringer of social justice and adopted a form of the predistribution beloved of Miliband by accompanying his dilution of tax credits with legislation for a claimed living wage, Labour’s attempt to come to terms with these unknowns is complicated by Tory cross-dressing.
In spite of events in Greece, the Budget, unlike in 2010, was pitched less as a bulwark against calamity and more as a staging post to better future. In which we are all invited to share. Reality may struggle to keep pace with the one nation rhetoric. Particularly when a tool for creating an income floor (the statutory minimum wage, which is what Osborne has raised through his supposed living wage) is deployed as a replacement for incentives to additional work (working tax credits).