Cameron's reshuffle is even more hazardous than before

The PM has accidentally stoked vast expectations.

Shortly before everyone in Westminster started talking obsessively about House of Lords reform, they talked obsessively about the likely outcome of David Cameron’s first big cabinet reshuffle. (Sometimes the obsessive talk in Westminster is about things that have a direct impact on people’s lives – the things voters care about. But not as often as they ought.)

Happily for the obsessives, the themes of Lords reform and reshuffle have now effectively merged. There was always speculation that Cameron was delaying making any new government appointments until after the Lords vote, so as to dangle the prospect of promotion and the threat of blackballing in front of potential rebels. If so, it didn’t work out too well as an incentive scheme.

Jesse Norman, the rebel chief, has often been tipped for a ministerial gig of some kind. He has been close to the Cameroons. He quite literally wrote the book on the "big society". He’s clever, politically astute and very ambitious. It should be of some concern to No.10 that he chose to deploy his talents in the service of rebellion rather that government. (The PM is reported to have expressed what might euphemistically be called his disappointment in a moment of finger-jabbing exasperation after Tuesday night’s vote.) Norman, it must be said, is a sincere and erudite enthusiast for all matters Conservative and constitutional. His action against what he saw as an attempt to bodge the upper chamber of parliament was driven by a particular passion, not some cynical discovery of coalition-baiting as sport.

Still, it would be impossible for Cameron to promote him; likewise Nadim Zarhawi, a formerly ultra-loyal MP from the 2010 intake, thought to be a eligible for a first rung on the government ladder, who also rebelled on Tuesday night.

Cameron’s authority in the party is too low for him to be seen to be rewarding flagrant insubordination. Two junior ministerial aides – Conor Burns and Angie Bray – have already lost their jobs over the rebellion; the former jumping the latter pushed. And while officially the Lib Dems have no say in who the PM appoints on his side of the coalition, dispensing favours to the Lords saboteurs would be an extraordinary affront.

It now seems certain – as indeed it has for a while – that the reshuffle will come in autumn. Cameron will want the summer to get some perspective on the turbulent politics of the first half of the year and to think about his strategy for what will, whether he likes it or not, be judged as a re-launch. Chiefly he has to decide whether the emphasis will be on “Modernisation 2.0” – a renewal in some form of plan to change people’s perceptions of what the party stands for and whom it represents or on a more “Authentic Conservative” platform – stressing traditional themes to fire up the base.

Of course, Downing Street aides insist you can do both and that the choice is a false one, but certain signals will inevitably be sent by the decisions about who is appointed to what jobs. Putting Chris Grayling in charge of, say, the Home Office - a job he once shadowed and for which he unsubtly auditions whenever he appears in public - would tilt conspicuously to the right. Finding some modest ministerial niche for Nick Boles – a liberal Cameroon ultra and old friend of the PM – would be a nod to the old modernisation agenda. And then, of course, there are the dilemmas that have lingered around for so long they feel almost stale, but remain problematic: what to do with Culture Secretary Jeremy Hunt and party chair Sayeeda Warsi – two cabinet members who have been the target of ferocious campaigns, one from the opposition, the other from inside the Tory ranks.

The list could go on. Everyone has their pet theory and gossip of dubious origin about the scale, timing and likely content of the reshuffle. A problem for Cameron is that, having left it so long before re-jigging his team, he has accidentally stoked vast expectations. There are too many factions and individuals to be satisfied and the strategic political challenge is too big to be met by a round of musical chairs. The PM finds himself in political air traffic control, with some many ambitious figures - jumbo-sized egos - circling overhead and only a little bit of runway space on which to bring them safely in to land. Far from re-launching the whole project, he will be lucky to pull it off without accident.

David Cameron is set to carry out his first cabinet reshuffle this autumn. Photograph: Getty Images.

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

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Iain Duncan Smith says what most Brexiters think: economic harm is a price worth paying

The former cabinet minister demonstrated rare candour by dismissing the "risks" of leaving the EU.

Most economists differ only on whether the consequences of Brexit would be terrible or merely bad. For the Leave campaign this presents a problem. Every referendum and general election in recent times has been won by the side most trusted to protect economic growth (a status Remain currently enjoys).

Understandably, then, the Brexiters have either dismissed the forecasters as wrong or impugned their integrity. On Tuesday it was the turn of the Institute for Fiscal Studies (IFS), one of the most revered bodies in Westminster. In response to its warning that Brexit would mean a further two years of austerity (with the hit to GDP wiping out George Osborne's forecast surplus), the Leave campaign derided it as a "paid-up propaganda arm of the European commission" (the IFS has received £5.6m from Brussels since 2009). 

The suggestion that the organisation is corrupt rightly provoked outrage. "The IFS - for whom I used to work - is not a paid up propaganda arm of the EU. I hope that clears that up," tweeted Brexit-supporting economist Andrew Lilico. "Over-simplified messaging, fear-mongering & controversialism are hard-minded campaigning. Accusing folk of corruption & ill intent isn't." The Remain campaign was swift to compile an array of past quotes from EU opponents hailing the IFS. 

But this contretemps distracted from the larger argument. Rather than contesting the claim that Brexit would harm the economy, the Leave campaign increasingly seeks to change the subject: to immigration (which it has vowed to reduce) or the NHS (which it has pledged to spend more on). But at an event last night, Iain Duncan Smith demonstrated rare candour. The former work and pensions secretary, who resigned from the cabinet in protest at welfare cuts, all but conceded that further austerity was a price worth paying for Brexit. 

"Of course there's going to be risks if you leave. There's risks if you get up in the morning ...There are risks in everything you do in life," he said when questioned on the subject. "I would rather have those risks that we are likely to face, headed off by a government elected by the British people [and] governing for the British people, than having a government that is one of 27 others where the decisions you want to take - that you believe are best for the United Kingdom - cannot be taken because the others don't agree with you."

For Duncan Smith, another recession is of nothing compared to the prize of freedom from the Brussels yoke. Voters still reeling from the longest fall in living standards in recent history (and who lack a safe parliamentary seat) may disagree. But Duncan Smith has offered an insight into the mindset of a true ideologue. Remain will hope that many more emulate his honesty. 

George Eaton is political editor of the New Statesman.