Tory MPs are losing patience with Osborne

The Chancellor's "disproportionate obsession" with Ed Balls comes under attack from his own side.

At one point in The Godfather Part III, Michael Corleone sagely remarks: "Never hate your enemies. It affects your judgment." It was this lesson that George Osborne, as so often in his political career, forgot this week. After his aides were forced to "clarify" that he had never alleged that Ed Balls was personally involved in the Libor scandal (rather that he had "questions to answer", a distinction without a difference if ever there was one), opinion is hardening among Conservative MPs that the Chancellor has overreached himself.

In a fascinating piece in today's Times (£), Sam Coates and Roland Watson collate a series of off-the-record barbs from Tory backbenchers. One MP describes Osborne's obsession with the alleged role of Balls and "Whitehall sources" in the scandal as a "red herring", adding: "There was no smoking gun." Another opines: "People want us to sort out the effing banks, not worry about what Ed Balls might have said four years ago.” Osborne's dual role as Chancellor and chief Tory strategist is also called into question (the increasing view among Tory MPs is that he isn't good at either job). One MP comments: "When are we going to get a Chancellor who is not part time? You can’t run the sixth largest economy in the world with a mate-ocracy."

The irony is that Osborne's jihad against Balls was intended to restore his Budget-battered reputation. But the Chancellor's obsessive desire to pin the scandal on Labour meant that he missed an obvious truth: what matters most is who is seen to have the right policy now. In the eyes of the public, the Tories' refusal to sanction a judicial inquiry (something that enjoyed the support of 75 per cent of voters, according to YouGov) or to levy new taxes on the banks (Richard Reeves, Nick Clegg's outgoing director of strategy, tells today's Independent that the Lib Dems were pushing for a 10 per cent surcharge on bankers' bonuses) has confirmed their status as the political wing of the City of the London. As so often, Osborne, the man charged with constructing a Conservative majority, has achieved the reverse.

One Tory MP said of George Osborne, "When are we going to get a Chancellor who is not part time?" Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

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.