Yesterday George Osborne treated us to an Autumn Statement in which he performed one of the most remarkable political U-turns in living memory.
The apparent need to cut £12bn from the welfare budget has long been sign-posted by the Tories as a requirement to getting us “back in the black” and on the road to a “higher wage, lower welfare, lower tax” society as part of their oft-cited “long-term economic plan”. (Or what academic economists prefer to call a “risky experiment with the economy in order to score political points“.)
Alert readers will recall David Cameron saying before the general election that child tax credits wouldn’t be cut in pursuit of that goal. But after the election, Osborne decided that they would. The Institute for Fiscal Studies determined that these cuts would have the worst effects on some of the poorest families in Britain.
Despite widespread opposition to the cuts, Labour infamously abstained on the critical vote in the Commons. Then, when the welfare bill reached the Lords, Labour once again abstained on a Lib Dem motion that would have completely killed the bill, in favour of a Labour one which phased in the cuts over three years, but meant Osborne would have to find another £4.5bn in his budget.
The passing of the Labour motion enraged Cameron so much that he went on an extraordinary rant about a “constitutional crisis” and announced a “rapid review”.
So we were somewhat surprised to hear Osborne say yesterday that the best thing to do was “not to phase these changes in, but to avoid them altogether”.