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.

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Single parent families are already struggling - universal credit is making things worse

Austerity and financial hardship are not inevitable – politicians have a choice.

“I don’t live, I merely keep existing”. So says one single parent in Gingerbread’s final report from a project tracking single parent finances since 2013. Their experience is typical of single parents across the country. The majority we surveyed are struggling financially and three-quarters have had to borrow from friends, family or lenders to make ends meet.

This is not the story that the government wants to hear. With a focus on a jobs boom and a promise to "make work pay", a relentlessly positive outlook shines from the DWP. The reality is somewhat different. Benefit cuts have taken their toll, and single parents have been among the hardest hit. Estimates suggest over six per cent of their annual income was lost through reforms under the 2010-15 government. The 2015 Summer Budget cuts will add another 7.6 per cent loss on top by 2020, even after wage and tax gains.

What’s more, for all the talk of tackling worklessness, working families have not escaped unscathed. Single parent employment is at a record high – thanks in no small part to their own tenacity in a tough environment. But the squeeze on incomes has hit those in work too. The original one per cent cap on uprating benefits meant a single parent working part-time lost around £900 over three years. Benefits are now frozen, rapidly losing value as inflation rises. On top of stagnant and often low pay and high living costs, it’s perhaps unsurprising that we found working single parents surveyed just as likely to run out of money as those out of work – shockingly, around half didn’t have enough to reach the end of the month.

Single parent families – along with many others on low incomes – are being pushed into precarious financial positions. One in eight single parents had turned to emergency provision, including payday lenders and food banks. Debt in particular casts a long shadow over families. A third of single parents surveyed were behind on payments, and they described how debt often lingers for a long time as they struggle to pay it off from already stretched budgets.

All of this may be depressingly familiar to some – but it comes at something of a crossroads for politicians. With the accelerated roll-out of universal credit around the corner, the government risks putting many more people under significant strain – and potentially into debt. Encouragingly, the increasing noise around the delays to a first payment is raising red flags across political parties. Perhaps most alarming is that delays are not purely administrative, but deliberate – they reflect in-built, intentional, cost-saving measures. These choices serve no constructive purpose: they risk debt and anxiety for families the government intended to help, and costs for the services left to pick up the pieces.

But will the recent warning signs be enough? Despite new data showing around half of new claimants needed "advance payments" (loans to deal with financial hardship while waiting for a first payment), the Department for Work and Pensions stuck doggedly to its lines, lauding the universal credit project that “lies at the heart of welfare reform to help “people to improve their lives”.

And, as valuable as additional scrutiny is, must we wait for committees to gather and report on yet more evidence, and for the National Audit Office to forensically examine and report on progress once again? The reality is glaringly evident. Families have already been pushed to the brink without universal credit. Those entering the new system – and those supporting them, including councils – have made it abundantly clear that moving onto universal credit makes things worse for too many.

This is not to dismiss universal credit in its entirety. It’s hard to argue with the original intention to simplify the benefit system and make sure work pays. It was always going to be an ambitious (possibly over-ambitious) project. But salami slicing the promised support – from the added seven day "waiting period" for a first payment, to the slashed work allowances intended to herald improved work incentives – leaves us with a system that won’t merely overpromise and under-deliver, but endanger many families’ already fragile financial security. The impact should not be underestimated – this is not just about finances, but families’ lives and the emotional stress and turmoil that can follow.

With increasing political and economic uncertainty, with Brexit looming, this is not the time for petty leadership squabbles, but a time to reassure voters and revitalise the government’s promises to the nation. The DWP committed to a "test and learn" approach to rolling out universal credit – to pause and fix these urgent problems is no U-turn. And of course, the Prime Minister promised a transformed social justice agenda, tackling the "burning injustices" of the day. Nearly all of the UK’s 2 million single parent families will be eligible for universal credit once it is fully rolled out; making this flagship support fit for purpose would surely be a good place to start.

Sumi Rabindrakumar is a research officer at single parents charity Gingerbread.