Conference 2010 Lookahead | Tuesday 5 October

The who, when and where of today's Conservative party conference.

Look out for

Today's big speech will be from Iain Duncan Smith this afternoon at 14:30. Following George Osborne's announcement yesterday that universal child benefit would be cut, he will be under pressure to articulate his plan for the future of the entire benefit system. Critics of the child benefit cut, including from within the Conservative Party and the right-wing media, have called for the cut to be "softened", so Duncan Smith's response today will be closely scrutinised for signs of this.

In addition, David Cameron hinted in an interview this morning that child benefit would not be included in the planned "universal credit", as it would be tantamount to a "means testing system for every single family in the country", where as Iain Duncan Smith has previously suggested that child benefit would be part of the universal credit.

Signs of trouble

Justice Secretary Ken Clarke, due to speak this morning, could be a source of concern for coalition operatives -- always unpredictable, this weekend he went on record to register his concern that Britain could be heading for a double-dip recession, striking a pessimistic note ahead of a conference at which the Tories will be striving to strike an optimistic note.

In addition to his economic pronouncements, the former chancellor will use his conference speech today to announce new plans to create jobs for prisoners. He is expected to announce plans to involve private companies in creating jobs for prisoners, and perhaps even the creation of special "workplace prisons". Tory grassroots are already reported to be unhappy with Clarke's previous announcements that rehabilitation and community sentences will be used to ease the burden on prisons, and today's speech, with its rhetoric about jails providing "a regime of hard work", will be an attempt by Clarke to appease his critics within his own party.

On the fringe

The New Statesman hosts a panel discussion, chaired by Mehdi Hasan, entitled Gaza life support: Is aid a failure of politics?, with Alan Duncan MP, Robin Kealy from Medical Aid to Palestine, NS contributor Ed Platt, and Chris Doyle, director of the Council for Arab-British Understanding. 1pm, Cullinan Suite, Copthorne Hotel.

Elsewhere, David Davis MP, Alex Deane of Big Brother Watch, and Matthew Elliott, founder of the Taxpayers' Alliance and campaign director for the No2AV campaign, come together for an event entitled Civil Liberties under the Coalition. 3.15pm, Austin Court.

Today's agenda

10:00 Public services - Andrew Lansley and Michael Gove

11.30 Cutting crime, reforming justice - Ken Clarke and Theresa May

14.30 Reforming welfare - Iain Duncan Smith

15.45 Tackling global poverty - Andrew Mitchell

Caroline Crampton is web editor of the New Statesman.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR