Osborne plays the class card

A first glimpse of a new Tory strategy on class.

It's often said that George Osborne is much better at politics than he is at economics and he proved as much on The Andrew Marr Show this morning.

His fellow guest Harriet Harman attempted to catch him off-guard by asking if he ever fancied replacing David Cameron as leader. Osborne dismissed the question and responded: "We went to the same school [St Paul's]. They were always like this! Those Paulinas, so aggressive."

The pair may never have shared so much as a maths class (Osborne wasn't born when Harman left school), but the shadow chancellor's words offered a first glimpse of a strategy we can expect the Tories to return to ahead of the election.

Their argument goes like this: "Yes, we may be privileged toffs, but don't overlook those sitting on the Labour benches." Conveniently for the Tories, several of those (falsely) accused of waging "class war", notably Harman and Ed Balls, were privately educated.

It's no coincidence that this new strategy follows a Guardian/ICM poll showing the Tories are increasingly seen as the party of the upper classes. Given that in recent times the Tories have been led by individuals from modest or even "common" backgrounds (Ted Heath, Margaret Thatcher, John Major, Michael Howard), Cameron is more sensitive to this charge than one might expect.

But since the political class as a whole appears so remote from voters I doubt either party will be the winner from this phoney "class war".


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George Eaton is political editor of the New Statesman.

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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.