Osborne speaks sense on gay marriage

Gay marriage is right and we must support it if we want to win, Chancellor tells the Tories.

George Osborne has always sat on the socially liberal wing of the Conservative Party, so it is no surprise that he is a strong supporter of gay marriage. But given the extent of opposition to the policy within Tory ranks (it is reportedly the top reason for members resigning from the party), it's still notable that he uses an op-ed (£) in today's Times to signal that the government will press ahead with plans to introduce it.

With an eye to Obama's victory last week, the Chancellor rightly concludes that social liberalism is the only electorally viable position. He notes that the Republicans "lost swathes of voters who were on their side of the economic argument" because of their stances on abortion and equal marriage, adding that he wouldn't change "the current abortion laws" (as his voting record indicates) and that he supports gay marriage "on principle".

But, as ever, Osborne, who is both Chancellor and the Tories' chief election strategist, also has psephological considerations in mind. He believes the Tories should support gay marriage not just because it is the right thing to do but because it will help them win in the future. Osborne slightly overstates his case by writing that a "clear majority of the public support gay marriage" (the polling evidence is more mixed, although polls generally show at least a plurality in favour) but his wider point - that support for gay marriage is only likely to grow with time - is spot-on. In an echo of Tony Blair, who Osborne refers to as "the master" for his election-winning abilities, he writes that "Successful political parties reflect the modern societies they aspire to lead". To this end, the Chancellor confirms that the government will "introduce a Bill to allow gay marriage."

Already, however, his comments have prompted a backlash from Conservatives. Stewart Jackson MP tweets that the Chancellor "should focus less on social liberal obsessions like gay marriage & more on outside M25 priorities like jobs, taxes & growth". It is, of course, possible to do both. What Tories like Jackson really mean when they say the government should "focus" on other issues is that they don't want it to ever introduce gay marriage. So long as the Conservative Party continues to boast such figures in its ranks, many socially liberal Britons will feel unable to vote for it.

George Osborne said the government would "introduce a Bill to allow gay marriage". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR