Why the Tories are cheering Osborne's public sector job cull

The party believes that a smaller public sector will help it win a majority.

Those on the right who are fond of claiming that George Osborne's cuts are almost non-existent should look closely at the latest employment figures. They show that the coalition has cut 432,000 government jobs since the election (with an additional 196,000 reclassified as private sector posts), reducing the public sector workforce to its smallest level since 2001 (see graph). And Osborne isn't done yet. By 2017, according to the most recent OBR forecast, the government will have cut a further 298,000, bringing the total number lost to 730,000. In the words of the usually restrained Chartered Institute of Personnel and Development, we are witnessing "a tectonic shift in the underlying structure of the labour market".

What explains this dramatic cull? Fiscal considerations, naturally, play their part. Borrowing for 2012-16 will be around £174.9bn higher than originally expected (see the Bank of England's latest summary of independent forecasts) and Osborne wrongly believes that slashing the state is the best way to reduce it. In an inversion of Keynes, he thinks that if you take care of the deficit, unemployment will take care of itself (joblessness has fallen in recent months, but forecasters expect it to rise to 2.7m next year).  But Osborne, who is both Chancellor and the Conservatives’ chief electoral strategist, also has political considerations in mind. While in opposition, the Tories frequently complained that Labour's "client state" made the election of a Conservative government impossible, so, in office, they have reduced it. As one senior Tory told the Spectator’s James Forsyth, "You create a bigger private sector, you create more Tories."

The polls certainly suggest as much. Data published last month by Ipsos MORI (see graph above) showed that while Labour enjoys a 35-point lead among public sector workers, it trails the Tories by a point among their private sector counterparts (Labour leads by 39 to 35 points among the voluntary sector). Logic says that if you reduce the former group and expand the latter (the OBR forecasts an extra 1.7 million private sector workers by 2017), the Tories will benefit. A smaller public sector means fewer people with a vested interest in high levels of state spending.

The Tories aren't naïve enough to think that they'll immediately benefit from putting Labour voters on the dole, rather they believe that, over time, a labour market in which the public sector plays a smaller role will smooth their path to a majority. Osborne may claim that his cuts are born of necessity, rather than ideology, but, as ever with the Chancellor, politics is on his mind too.

George Osborne plans to cut 730,000 public sector jobs by 2017. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

Grenfell survivors were promised no rent rises – so why have the authorities gone quiet?

The council now says it’s up to the government to match rent and services levels.

In the aftermath of the Grenfell disaster, the government made a pledge that survivors would be rehoused permanently on the same rent they were paying previously.

For families who were left with nothing after the fire, knowing that no one would be financially worse off after being rehoused would have provided a glimmer of hope for a stable future.

And this is a commitment that we’ve heard time and again. Just last week, the Department for Communities and Local Government (DCLG) reaffirmed in a statement, that the former tenants “will pay no more in rent and service charges for their permanent social housing than they were paying before”.

But less than six weeks since the tragedy struck, Kensington and Chelsea Council has made it perfectly clear that responsibility for honouring this lies solely with DCLG.

When it recently published its proposed policy for allocating permanent housing to survivors, the council washed its hands of the promise, saying that it’s up to the government to match rent and services levels:

“These commitments fall within the remit of the Government rather than the Council... It is anticipated that the Department for Communities and Local Government will make a public statement about commitments that fall within its remit, and provide details of the period of time over which any such commitments will apply.”

And the final version of the policy waters down the promise even further by downplaying the government’s promise to match rents on a permanent basis, while still making clear it’s nothing to do with the council:

It is anticipated that DCLG will make a public statement about its commitment to meeting the rent and/or service charge liabilities of households rehoused under this policy, including details of the period of time over which any such commitment will apply. Therefore, such commitments fall outside the remit of this policy.”

It seems Kensington and Chelsea council intends to do nothing itself to alter the rents of long-term homes on which survivors will soon be able to bid.

But if the council won’t take responsibility, how much power does central government actually have to do this? Beyond a statement of intent, it has said very little on how it can or will intervene. This could leave Grenfell survivors without any reassurance that they won’t be worse off than they were before the fire.

As the survivors begin to bid for permanent homes, it is vital they are aware of any financial commitments they are making – or families could find themselves signing up to permanent tenancies without knowing if they will be able to afford them after the 12 months they get rent free.

Strangely, the council’s public Q&A to residents on rehousing is more optimistic. It says that the government has confirmed that rents and service charges will be no greater than residents were paying at Grenfell Walk – but is still silent on the ambiguity as to how this will be achieved.

Urgent clarification is needed from the government on how it plans to make good on its promise to protect the people of Grenfell Tower from financial hardship and further heartache down the line.

Kate Webb is head of policy at the housing charity Shelter. Follow her @KateBWebb.