Politics: Who will speak for the middle 98 per cent?

The year has begun with the British political class obsessing about the government’s new housing benefit cap. The cap is a sensible move to make sure that no one can claim more than £20,000 a year in housing benefit. It will save money. But, politically speaking, it is a ‘wedge issue’ of the sort usually deployed by American politicians. Its purpose is to force Labour to choose between an uncomfortable position and an unpopular one. Are you on the side of taxpayers, the Tories will ask, or of those being subsidised to live in places that most workers could not afford?

Labour has, predictably, failed to avoid the trap. The leadership knows how politically toxic it would be to end up on the wrong side of this dividing line, but then it has internal politics to consider. Many of London’s constituency Labour parties, which are traditionally more left-wing than those in the rest of the country, are strongly opposed to the cap. Given that it will most affect the capital, their voices carry weight.

Labour’s official line is to support a cap in principle but oppose the way it is being implemented. This compromise will still let the Tories pump out leaflets at the next election saying that Labour opposed limiting housing benefit to £20,000 a year. Labour faces a similar problem when it comes to the broader benefits cap the coalition will bring in next year.

Welfare reform is an ever more emotional issue in this age of austerity. As one Conservative Cabinet minister observes, when money is tight, people become more ‘right-wing’: more concerned about looking after their own and angry at the 300,000-odd families with no members who have ever worked.

The political fact is inescapable. When I went to watch Ed Miliband meet a group of manufacturing workers in Sunderland late last year, it was striking how many of their questions were essentially diatribes about how those on benefits had the same standard of living as they did.