Tories guesstimate that Labour loses about one MP for every month that Jeremy Corbyn survives. The longer he is in office the more Labour will regain its reputation as untrustworthy with Britain’s economy and defences. So, perhaps the tax credit cuts form an ever-so-cunning plan to keep Mr Corbyn in position? It’s as good an explanation as any other I can fathom. Labour has been handed grade-one political ammunition by the decision to cut the benefits of 8.4 million lower-income households. Mr Corbyn’s team has calculated that the number of casualties is bigger than the majorities of Tory MPs in 71 marginal constituencies.
The leader of the opposition scored a victory at prime minister’s questions last week after forcing David Cameron to face uncomfortable questions about the cuts’ impact on working families. Cuts that will produce 80 per cent marginal tax rates for some households. The fact that Mr Corbyn is so very matter-of-fact in his manner — avoiding the fake fireworks we often see in parliament — made his criticisms all the more persuasive. When Britain implicitly voted for welfare cuts in May it probably didn’t think aspirational people doing the right thing were to be targeted.
What should worry Downing Street is that it isn’t just Labour or regular rebels such as David Davis and Zac Goldsmith who are protesting. David Willetts, Boris Johnson, ConservativeHome and The Sun are also leading the charge.
The government insists that other measures compensate, but they don’t. The biggest gainers from the promise to raise the personal tax threshold are two-income households who already earn good money. Claims that tax credit cuts are necessary to reduce the deficit would be more persuasive if wealthy pensioners were not about to receive a 2.5 per cent increase — even though prices are falling.
George Osborne does not need to beat a full retreat. Any prudent chancellor would trim a benefit that costs 500 per cent more than when it was introduced in 1997. But it should be trimmed gradually rather than slashed. The retreat could be paid for by merging Whitehall departments and by introducing new council tax bands for high-value properties. U-turns are always embarrassing but Mr Osborne can’t hack at tax credits in the budget and Mr Cameron seize the one-nation high ground in his party conference speech. Either the tax credit cuts or the one-nation mission must go. Which is it to be?