My apology to the Tories

I was just joking about only liking Ken Clarke.

On Friday night, I appeared on Radio 4's Any Questions, with former the mayor of London Ken Livingstone, Kenneth Clarke MP and Julia Goldsworthy MP. You can listen to it here.

In the middle of a rather lively exchange with Ken Clarke over the Tories' debt delusion, I remarked:

Ken is one of the best chancellors of the Exchequer we've had in many, many years. He's the only Tory I like [boo! hiss!], let's be honest. But, but, he's wrong on this [the deficit].

I'm not sure if the audience hissed and booed because they were angry that I'd said I liked Clarke or because I'd said that, among Tories, I liked only Clarke.

But on reflection, I have an apology to make to the Conservative Party. There are, in fact, lots of Tories whom I admire, appreciate and/or like -- while disagreeing with most of their policies, principles and positions. On the current front bench, as well as Ken Clarke, I have to admit a soft spot for Oliver Letwin, David Willetts, Dominic Grieve and Sayeeda Warsi.

Going back through recent history, the names Michael Heseltine, Chris Patten, Ian Gilmour, Iain MacLeod, Rab Butler and Winston Churchill spring to mind. (Disclaimer: I include Churchill because he led this nation to victory over Nazism; I nonetheless continue to abhor and despise his racist views and his use of chemical weapons against the Iraqis -- 70 years before Saddam Hussein.)

So, which Tories do you like? From a left/liberal perspective? Answers below the line, please . . .

On a side note, Ken Clarke also made a couple of factually inaccurate remarks that I wanted to challenge in this post.

1) On the subject of Lord Cashcroft, Clarke predictably tried to deflect the questions by repeatedly referring to the non-dom Labour donor Lord Paul, even though Paul is not deputy chairman of the Labour Party, is not funding Laboury's marginal seats campaign, and did not give repeated undertakings to his party leadership or the House of Lords that he would become a "permanent resident" of the UK, for tax purposes, upon becoming a peer. On Friday night, I pointed out to Clarke that Lord Paul had not given millions to Labour, as Ashcroft has to the Conservatives. Clarke responded:

No, Lord Paul has given several million [pounds].

Wrong. As the Ministry of Truth blog points out:

For one thing, it's a bit of a reach to call Lord Paul a major Labour donor when the Electoral Commission's records show that he's made only one personal donation to the party (a mere £10,000 in 2001) while his company, Caparo, has donated the princely sum of £14,250 in three donations, one in 2002 and two more in 2008.

Caparo were a little more generous with Gordon Brown during the period when he was raising funds for his campaign for the Labour leadership, but only to the tune of £45,000 in two donations, which is loose change compared to the amount that Ashcroft has funnelled into the Conservative Party since 2003.

2) On the subject of the rules about non-domiciles, I pointed out that the rules were an anachronism and should be abolished. I also highlighted how Britain ploughs a lonely furrow on this issue -- few other countries offer such a tax loophole to their squillionaire class, not even free-market, low-tax America. Clarke, a former chancellor of the Exchequer in this country, responded:

That's not true. That's not true.

Really? I asked the leading tax accountant Richard Murphy whether or not the Americans make a distinction between domicile and residency for tax purposes. His response? "Absolute bollocks." Oh, and here's the BBC website's take:

Few other countries have such a loophole. Most, like the United States, insist that if you live in the country you have to pay taxes on your worldwide earnings.

In general, over the course of the one-hour radio debate, I couldn't help but feel sorry for Clarke. His heart clearly wasn't in it. Had he been leader of the Conservative Party over the past decade -- the great "What if . . .?" question of modern British politics -- we would probably not have had Michael Ashcroft ennobled and made deputy chair of the Conservative Party. Nor for that matter would we have had the Tories' proposed inheritance-tax cut for the country's 3,000 richest estates or the Tories' strange alliance in Europe with the "ultra-nationalist right". Oh, and we might have avoided the Iraq war, too . . .

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

Photo: Getty Images
Show Hide image

Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.