Osborne emerges unscathed from Leveson

The Tories will be delighted with the Chancellor's calm performance.

Given the potential for upset, the Conservatives will be delighted with how well George Osborne's appearance at the Leveson inquiry went. The Chancellor, who was evidently well-prepared, gave an impressively calm performance that will go way some to restoring his diminished political reputation.

There were no bombshells, no revelations of inappropriate contact with the Murdochs, and Osborne successfully fielded a series of questions on Jeremy Hunt and Andy Coulson. Asked why Hunt was given responsibility for the BSkyB bid, he passed the buck to the then-permanent secretary, Jeremy Heywood, who advised that the Culture Secretary should be handed control. Hunt's publicly-expressed support for the bid was "not considered" a problem, although Osborne notably added that the inquiry would need to ask David Cameron about the legal advice he received on the subject.

On Coulson, he argued persuasively that the former News of the World editor was hired principally for his journalistic nous, not for his News International contacts ("which were already well-established"). The Chancellor, who told the inquiry that he remained "a friend" of Coulson ("though sadly I have not been able to speak to him for a year"), expressed genuine regard for Coulson's abilities as a spinner. As Rafael wrote recently, the Tories feel sorrow, rather than anger, at his downfall.

Osborne revealed that he asked Coulson whether there was "more in the phone-hacking story that was going to come out" and accepted his assurances. He added that he assumed that there was nothing more to be revealed because of statements from the Press Complaints Commission and the trial of Clive Goodman and Glenn Mulcaire. In a missed opportunity, Robert Jay QC did not go on to ask Osborne whether he changed his view when the Guardian revealed that phone-hacking went far beyond "one rogue reporter". We already know from Coulson's testimony that Cameron, perhaps afraid of what he would learn, sought no further assurances at this point.

Cameron and those who advised him (including Osborne) remain guilty of showing terrible judgement by appointing Hunt and Coulson to their respective positions. The Murdoch scandal continues to dog every attempt they make to relaunch their moribund government. It has provided, and will continue to provide, Labour with an endless stream of bad news stories. But, for now, the Tories will be relieved that Osborne's appearance merely confirmed, rather than deepened, their woes.

Chancellor George Osborne leaves after giving evidence at the Leveson inquiry. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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