The report that a member of the BBC’s Question Time audience was reduced to tears because of the effect of the cut in tax credits is distressing. It is also something of a political embarrassment.
This blog has commented often about the ridiculous situation where low wages and excessive rents are subsidised by benefits so as to support the private sector, without which businesses would have to pay higher wages and landlords would have to charge no more than tenants could afford. Unfortunately it is not that simple. To stop the rent subsidies you would have to control rents at affordable levels, give long term security of tenure by law and consequently crash house prices. Even Osborne dare not go there.
But on the face of it tax credits looked easy. Cut them, but increase the minimum wage to compensate. Simple. Well not quite. It turns out that most beneficiaries of tax credits are not on the minimum wage. They are families under pressure who are hard working but still cannot make ends meet. They are going to be very hard hit. Many, if not most, voted Tory because it was now the party of hard working people who want to get on. Tears will flow in rivers. As Boris has said this is a political disaster. The wound of betrayal will be raw for years. Even till 2020.