Too many Leavers were on ben­e­fits and had too lit­tle to lose

The Daily Telegraph - - Comment - JULIET SA­MUEL FOL­LOW Juliet Sa­muel on Twit­ter @Ci­tySa­muel; READ MORE at tele­graph.co.uk/opin­ion

Ge­orge Os­borne fi­nally emerged from hid­ing yes­ter­day with a state­ment to re­as­sure us all. The Bri­tish fi­nan­cial sys­tem and econ­omy will not col­lapse, he de­clared, and that’s partly be­cause of the fine job he’s done at the Trea­sury.

Well, up to a point, Chan­cel­lor. What he didn’t say was that he and his col­leagues failed in one of the el­e­men­tary tasks that should guide any Tory lead­er­ship: get­ting more peo­ple off their reliance on the state. Had he done so, it’s just pos­si­ble that a greater num­ber of op­ti­mistic, self-con­fi­dent vot­ers with some­thing to lose would have saved his ba­con and voted Re­main last week.

A large num­ber of Brexit vot­ers feel left out of Bri­tain’s suc­cess, the sur­veys show. Th­ese vot­ers be­lieved that while Brexit would be bad for the econ­omy as a whole, it wouldn’t af­fect their house­hold fi­nances. In other words, they had lit­tle to lose. The only shift in vot­ers’ judg­ment on this oc­curred af­ter Mr Os­borne’s “emer­gency bud­get” threat­en­ing mas­sive cuts and tax rises, but that wasn’t enough.

That is partly be­cause Gor­don Brown spent years build­ing up a sys­tem, unique in Europe, in which more peo­ple owe the health of their fi­nances to gov­ern­ment hand-outs than a real, wealth-cre­at­ing econ­omy.

The cor­re­la­tion be­tween a Brexit vote and re­ceipt of th­ese gov­ern­ment cred­its is strik­ing in many parts of the country. Bos­ton in Lin­colnshire, for ex­am­ple, re­vealed it­self to be the most pro-Leave district in Bri­tain last week, with three-quar­ters of peo­ple vot­ing for Brexit. Bos­ton is also one of the ar­eas get­ting the most from the ben­e­fits sys­tem: nearly a third of its fam­i­lies rely on ben­e­fits of some kind, ac­cord­ing to gov­ern­ment data. Peo­ple who rely less on com­pany in­vest­ment and pro­duc­tiv­ity for their daily bread than on hand-outs are more likely to take a risk with Bri­tain’s in­ter­na­tional trade and rep­u­ta­tion. Af­ter all, why not?

It was only five years af­ter first be­com­ing Chan­cel­lor that Mr Os­borne tried to cut down on ben­e­fits spend­ing. He was de­feated by his own back­benchers be­cause he had not con­sid­ered how to build sup­port for the pol­icy and make it hu­mane. In­stead, he adopted a ham­fisted, short-term tac­tic: raid the wel­fare bill when eco­nomic fore­casts don’t go your way.

But tax cred­its are just one part of the prob­lem. They are a symp­tom of a deeper malaise: a country in which too many peo­ple do not feel that ba­sic mid­dle-class as­pi­ra­tions like own­ing a house are achiev­able. The Gov­ern­ment has done noth­ing to boost house­build­ing on the scale re­quired. It has end­lessly put off vi­tal de­ci­sions on in­fra­struc­ture, like a third run­way at Heathrow or the ex­pan­sion of Hink­ley Point.

It’s not all dire news. We have record num­bers of peo­ple in work and our banks have huge stocks of cap­i­tal and liq­uid­ity. Mr Os­borne de­serves some credit for punchy rhetoric that kept up mar­ket con­fi­dence in Bri­tain over the last six years. But with Brexit shak­ing in­vestors’ be­lief in Bri­tain, the lack of se­ri­ous re­form leaves us dan­ger­ously ex­posed. Mr Os­borne should not be crow­ing about his great suc­cess in fix­ing the fun­da­men­tals of our econ­omy. Strongly worded speeches aren’t go­ing to work any more. We need real re­form.

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