George Osborne’s strivers have a shock in store

Beware politicians serving up easy distinctions to please and appease their party faithful. This week at the Conservative conference, the favoured divide was between “strivers and shirkers“, a refinement of one of the oldest tropes in politics – the deserving and undeserving poor.

Devices like these generally work far better in the conference hall than they do in messy real life. But this particular distinction matters, and not just because it serves to reinforce the prevailing sentiment that spending on benefits is too generous – it also obscures the real nature of the coming welfare cuts.

Hard attitudes on benefits are expected to soften during economic downturns, but so far this has not happened. It may be that when the public is confronted with ever more uncomfortable examples of hardship arising from cuts, then opinion may shift – although I wouldn’t bet on that happening anytime soon. What we can be sure of, however, is that the claim that those who rely on welfare inhabit a different world to everyone else just doesn’t stand up to scrutiny.

Leave to one side the fact that roughly half of what is termed “welfare” goes to the elderly, largely exempt from any cuts. Zoom in on the working-age population and we see that, even in our era of high, long-term unemployment, it remains the case that there is great turnover between those moving in and out of work: seven out of ten of those returning to work had been unemployed for less than six months.

Or consider the lazy conflation of welfare spending with benefits going to those out of work. Three-quarters of the six million families receiving tax credits have someone in work. Over the last few years new housing benefit claims have increasingly come from those in work, not out of it, as wages have fallen behind rents. And next year’s cut in council tax benefit is likely to be a major blow to the working poor and jobless alike.

All of this means that a working family struggling on a low income – the “strivers” being courted this week – who’ve heard the message that George Osborne’s proposed £10bn of new “welfare cuts” will be paid for by the workshy – should prepare themselves for a nasty shock: they’ll be paying too.

There is, after all, form on this. The coalition’s first welfare cuts were targeted at childcare support for working parents. Last autumn, working tax credits were frozen even while inflation soared. Tax-credits for those working part-time were next in line.

Given this pattern, it is remarkable how pliant much of the media have been in conveying the notion that further cuts will be focused on the workless, when the reality is likely to be more complex. No one should be surprised if, come the autumn budget statement, we are presented with a headline-grabbing cut that hurts a relatively small group and yields modest sums – like ending housing benefit for the childless under-25s – accompanied by a stealthier measure affecting millions of people and saving billions, such as uprating working-age benefits by less than inflation.

Step back from this week’s rhetoric and we see that, in some ways, the fate of the unemployed and the working poor are becoming more closely bound together. Overall, child poverty has fallen markedly over the last decade, but the share of working poverty has grown. And higher unemployment has a powerful chilling effect on wages, far more so now than in the 1980s and 1990s – indeed, the rise in unemployment since its low point in the mid-2000s is estimated to have reduced the annual pay of the typical worker by more than £2000. The moral of this story? Securing rising wages for working people is more dependent than ever on achieving low levels of unemployment – and the prerequisite for this is stronger demand.

This changed context doesn’t, of course, mean that there aren’t households with deep social problems and little or no attachment to the world of work. But let’s not elide that pressing but specific problem, which people across the political spectrum want to address, with the cliched claim that billions of savings can readily be realised by reining in welfare largesse.

Indeed, given this week’s rhetoric, it is a curious and commendable feature of the coalition’s troubled universal credit policy that it unites support for those in and out of work, and in so doing makes it trickier for future governments to distinguish different categories of claimant.

Being candid about the large swath of people in Britain who rely on some aspect of state support to get by doesn’t make for easy sloganeering or play well in focus groups of swing voters. Rest assured, however, that when further welfare cuts bite, they will hurt a far bigger chunk of the country – working as well as workless, south as well as north, supporters of all parties – than anyone let on this week.

This article orginally appeared in The Guardian