Osborne is losing political control of the economic debate

The once mighty 'Plan A' is reduced to a pile of cold pasties.

In today’s Telegraph, Liam Fox has written a brisk précis of the analysis often heard on the right wing of the Tory party about why the economy isn’t growing. The problem, in the former Defence Secretary’s view, is a lack of rigour in pursuing supply side reforms.
 
Chiefly, that means aggressive labour market deregulation. The theory is that rules protecting employees’ rights are deterring companies from taking on staff. Relaxing those rules - making it easier to sack people - is thus supposed to lubricate private sector job creation. This was the essential thrust of a report commissioned last year by Downing Street from Adrian Beecroft, a venture capitalist (and Tory party donor).
 
The Beecroft report got bogged down in coalition warfare as Lib Dems briefed heavily against it – suggesting it was a shoddy piece of work with recommendations that were mostly peripheral to the task of rebooting the economy. Fox takes a swipe at Nick Clegg’s party for “intuitive left-wing opposition to supply side reform”.
 
It is worth recalling at this point what Lib Dem Energy Secretary Ed Davey said in a New Stateman interview on this subject recently.  (He was the employment minister at the time of the most ferocious rows over Beecroft):

I never bought the argument that our labour market was the most regulated there is. All the evidence shows we have one of the least regulated labour markets in the world.

One reason this issue ignites internal coalition tension is that it becomes a proxy for pro- and anti-European feeling. The right wing of the Conservative party sees the EU as an engine of pernicious bureaucracy and regulation. Eurosceptics put setting employment rules at the top of their list of powers to be “repatriated”. The Lib Dems are desperately trying to steer the government into a more consensual approach in Brussels and find all talk of repatriation unhelpful.
 
But there is a different political problem for David Cameron and George Osborne contained in Fox’s intervention. The news of a double dip recession has emboldened both the left and right in their conviction that the coalition’s current course is failing. Naturally, they have entirely different diagnoses and as a sense of urgency - bordering on panic – takes hold, that divergence will become more extreme. The great danger for the Prime Minister and the Chancellor (and, by association, for Nick Clegg and Danny Alexander) is that they will lose control of the economic debate entirely.
 
As the Tory backbenches get frothy about bolder supply side measures and deeper cuts, Labour bangs its Keynesian drum for a change of course in the opposite direction. That leaves Downing Street holding a bunch of discredited budget measures that no one thinks will make the blindest bit of difference to growth. Plan A is reduced to a pile of cold pasties.

 

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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After Strictly, I'd love to see Ed Balls start a new political party

My week, from babbling at Michael Gove to chatting Botox with Ed Balls and a trip to Stroke City.

If you want to see yourself as others see you, write a weekly column in a national newspaper, then steel yourself to read “below the line”. Under my last offering I read the following comment: “Don’t be angry, feel pity. Her father was a member of the European Parliament. Her older brother has been a member of parliament, a cabinet minister, a secretary of state, a historian, a mayor of London. Her younger brother is a member of parliament and minister for universities and science. She has a column in the Daily Mail. Can you imagine how she feels deep inside?” Before I slammed my laptop shut – the truth always hurts – my eye fell on this. “When is Rachel going to pose for Playboy seniors’ edition?” Who knew that Playboy did a seniors’ edition? This is the best compliment I’ve had all year!

 

Three parts of Michael Gove

Part one Bumped into Michael Gove the other day for the first time since I called him a “political psychopath” and “Westminster suicide bomber” in print. We had one of those classic English non-conversations. I babbled. Gove segued into an anecdote about waiting for a London train at Castle Cary in his trusty Boden navy jacket and being accosted by Johnnie Boden wearing the exact same one. I’m afraid that’s the punchline! Part two I’ve just had a courtesy call from the Cheltenham Literature Festival to inform me that Gove has been parachuted into my event. I’ve been booked in since June, and the panel is on modern manners. De mortuis nil nisi bonum, of course, but I do lie in bed imagining the questions I hope I might be asked at the Q&A session afterwards. Part three There has been what we might call a serious “infarction” of books about Brexit, serialised passim. I never thought I would write these words, but I’m feeling sorry for the chap. Gove gets such a pasting in the diaries of Sir Craig Oliver.

Still, I suppose Michael can have his own say, because he’s returning to the Times this week as a columnist. Part of me hopes he’ll “do a Sarah Vine”, as it’s known in the trade (ie, write a column spiced with intimate revelations). But I am braced for policy wonkery rather than the petty score-settling and invasions of his own family privacy that would be so much more entertaining.

 

I capture the castle

I’ve been at an event on foreign affairs called the Mount Stewart Conversations, co-hosted by BBC Northern Ireland and the National Trust. Before my departure for Belfast, I mentioned that I was going to the province to the much “misunderestimated” Jemima Goldsmith, the producer, and writer of this parish. I didn’t drop either the name of the house or the fact that Castlereagh, a former foreign secretary, used to live there, and that the desk that the Congress of Vienna was signed on is in the house, as I assumed in my snooty way that Ms Goldsmith wouldn’t have heard of either. “Oh, we used to have a house in Northern Ireland, Mount Stewart,” she said, when I said I was going there. “It used to belong to Mum.” That told me.

Anyway, it was a wonderful weekend, full of foreign policy and academic rock stars too numerous to mention. Plus, at the Stormont Hotel, the staff served porridge with double cream and Bushmills whiskey for breakfast; and the gardens at Mount Stewart were stupendous. A top performer was Jonathan Powell, Tony Blair’s former chief of staff, who runs his own conflict resolution charity. Powell negotiated the Good Friday Agreement and also has a very natty line in weekend casual wear. Jeremy Corbyn has said he wants a minister for peace, as well as party unity. Surely “Curly” Powell – a prince of peace if ever there was one – must be shoo-in for this gig.

PS: I was told that Derry/Londonderry is now known as “Stroke City”. I imagined stricken residents all being rushed to Casualty, before I worked it out.

 

On board with Balls

Isn’t Ed Balls bliss? From originating Twitter’s Ed Balls Day to becoming Strictly Come Dancing’s Ed Balls, he is adding hugely to the gaiety of the nation. I did the ITV show The Agenda with Tom Bradby this week, and as a fellow guest Balls was a non-stop stream of campery, charleston steps, Strictly gossip and girly questions about whether he should have a spray tan (no!), or Botox under his armpits to staunch the sweat (also no! If you block the armpits, it will only appear somewhere else!).

He is clever, fluent, kind, built like a s*** outhouse, and nice. I don’t care that his waltz looked as if his partner, Katya, was trying to move a double-doored Sub-Zero American fridge across a shiny floor. After Strictly I’d like to see him start a new party for all the socially liberal, fiscally conservative, pro-European millions of us who have been disenfranchised by Brexit and the Corbynisation of the Labour Party. In fact, I said this on air. If he doesn’t organise it, I will, and he sort of promised to be on board!

 

A shot in the dark

I was trying to think of something that would irritate New Statesman readers to end with. How about this: my husband is shooting every weekend between now and 2017. This weekend we are in Drynachan, the seat of Clan Campbell and the Thanes of Cawdor. I have been fielding calls from our host, a type-A American financier, about the transportation of shotguns on BA flights to Inverness – even though I don’t shoot and can’t stand the sport.

I was overheard droning on by Adrian Tinniswood, the author of the fashionable history of country houses The Long Weekend. He told me that the 11th Duke of Bedford kept four cars and eight chauffeurs to ferry revellers to his pile at Woburn. Guests were picked up in town by a chauffeur, accompanied by footmen. Luggage went in another car, also escorted by footmen, as it was not done to travel with your suitcase.

It’s beyond Downton! I must remember to tell mine host how real toffs do it. He might send a plane just for the guns.

Rachel Johnson is a columnist for the Mail on Sunday

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories