Whither George Osborne?

Tory MP calls for the chancellor to be replaced.

Yesterday, it was the future of Conservative co-chairman Sayeeda Warsi that was being questioned by influential members of her own party. Today, it's the Chancellor George Osborne's turn to have his competence impugned by a colleague. In an article in the Mail on Sunday, Tory MP Brian Binley offers a fairly withering assessment of Osborne's record in government thus far. Binley writes:

The economy is in dire straits – even George Osborne must acknowledge that. It is now clear that the Chancellor will not fulfil his Election promise of eliminating the deficit by 2015. His much-trumpeted public spending cutbacks are illusory.
Binley goes on to make the kind of arguments for supply-side reforms that one hears alot both on the Tory backbenches and in the right-wing commentariat. He also says, baldly, that he doesn't think Osborne is up to the job of implementing such reforms.
I believe that George Osborne should be moved from the Treasury to the party chairmanship, to allow him to concentrate exclusively on winning the  next General Election. It would allow a Chancellor to  be appointed who has a deep command of economics, as well as political instincts that chime with the bulk of the party. Top of the list should be Defence Secretary Philip Hammond, who has the analytical strengths and broad commercial experience to become a fine Chancellor.
In an interview on the BBC's Andrew Marr Show this morning, Osborne had a chance to respond to criticisms like this. He gave a blustering, needled performance that compared unfavourably with the preternatural self-assurance and fluency of Shadow Business Secretary Chuka Umunna, who appeared on the programme before him. Asked about critics inside his own party, Osborne invited them to "get behind the government", and he swatted away a question about the wisdom of his continuing to combine occupancy of Number 11 Downing Street with a role as the Conservatives' chief election strategist. "I'm 110 per cent focused on the economy," he said.
 
What that focus will yield when Parliament returns, it appears, is legislation to reform the planning process which Osborne identified as one of the principal obstacles to the kinds of infrastructure projects that would provide a significant stimulus to the economy (which, incidentally, the Chancellor insists, all empirical evidence to the contrary, is "healing"). Marr wondered if that was part of the fabled "Plan B" that the Chancellor's critics have long been urging on him. Osborne demurred. "It's a hard road to recovery," he said. "And there is no alternative [to the government's deficit reduction strategy]."
 
As for a possible reshuffle, the Chancellor suggested that Marr ask David Cameron. One suspects we haven't heard the last of it.

 

On his way? George Osborne outside Number 11 Downing Street (Photograph: Getty Images)

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

Photo: Getty
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Why Chris Grayling is Jeremy Corbyn's secret weapon

The housing crisis is Labour's best asset - and Chris Grayling is making it worse. 

It feels like the classic Conservative story: wait until the election is over, then cancel spending in areas that have the temerity to vote Labour. The electrification of rail routes from Cardiff to Swansea – scrapped. So too is the electrification of the Leeds to Manchester route – and of the Midland main line.

But Crossrail 2, which runs from north to south across London and deep into the capital's outer satellites, including that of Transport Secretary Chris Grayling, will go ahead as planned.

It would be grim but effective politics if the Conservatives were pouring money into the seats they won or lost narrowly. There are 25 seats that the Conservatives can take with a swing of 1 per cent from Labour to Tory, and 30 seats that they would lose with a swing of 1 per cent from Tory to Labour.

It wouldn’t be at all surprising if the Conservatives were making spending decisions with an eye on what you might call the frontline 55. But what they’re actually doing is taking money away from north-west marginal constituencies – and lavishing cash on increasingly Labour London. In doing that, they’re actually making their electoral headache worse.

How so? As I’ve written before, the biggest problem for the Conservatives in the long term is simply that not enough people are getting on the housing ladder. That is hurting them in two ways. The first is straightforward: economically-driven voters are not turning blue when they turn 30 because they are not either on or about to mount the first rungs of the housing ladder. More than half of 30-year-olds were mortgage-payers in 1992, when John Major won an unexpected Conservative majority, while under a third were in 2017, when Theresa May unexpectedly lost hers.

But it is also hurting them because culturally-driven voters are getting on the housing ladder, but by moving out of areas where Labour’s socially-concerned core vote congregates in great numbers, and into formerly safe or at least marginal Conservative seats. That effect has reached what might be its final, and for the Conservatives, deadly form in Brighton. All three of the Brighton constituencies – Hove, Brighton Kemptown and Brighton Pavilion – were Conservative-held in 1992. Now none of them are. In Pavilion they are third, and the smallest majority they have to overcome is 9,868, in Kemptown. The same effect helped reduce Amber Rudd’s majority in Hastings, also in East Sussex, to 346.

The bad news for the Conservatives is that the constituencies of Crawley, Reading, Swindon and in the longer-term, Bracknell, all look like Brightons in the making: although only Reading East fell to Labour this time, all saw swings bigger than the national average and all are seeing increasing migration by culturally-driven left-wing voters away from safe Labour seats. All are seeing what you might call “Hackneyfication”: commuters moving from inner city seats but taking their politics with them.

Add to that forced migration from inner London to seats like Iain Duncan Smith’s in Chingford – once a Conservative fortress, now a razor-thin marginal – and even before you add in the appeal of Jeremy Corbyn’s person and platform, the electoral picture for the Conservatives looks bleak.

(It should go without saying that voters are driven by both economics and culture. The binary I’ve used here is simplistic but helpful to understand the growing demographic pressures on the Conservatives.)

There is actually a solution here for the Tories. It’s both to build more housing but also to rebalance the British economy, because the housing crisis in London and the south is driven by the jobs and connectivity crisis in the rest of the United Kingdom.

Or, instead, they could have a number of measures designed to make London’s economy stride still further ahead of the rest, serviced by 5 per cent mortgages and growing numbers of commuter rail services to facilitate a growing volume of consumers from London’s satellite towns, all of which only increase the electoral pressures on their party. 

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.