Vince Cable and Liam Fox unite on need for NHS cuts

An unlikely political alliance is formed as both men argue that health spending should not be protected while other services are cut.

Liam Fox might be one of the Tory supply-siders whom Vince Cable has accused of waging "jihad" against public services but could the pair be about to form an unlikely alliance? Both have today called for the government to cut spending on the NHS in order to free up funds for use elsewhere. 

In a speech this morning at the Institute of Economic Affairs, Fox will call for George Osborne to end the ring-fencing of the NHS, schools and international development and to use the money saved to dramatically reduce taxes, including the temporary abolition of capital gains tax, and to limit cuts to areas such as defence. 

Asked on the Today programme whether he agreed with Fox's stance on ring-fencing, Cable said that while there was "an argument for protecting key priorities" such as the overseas aid and science budgets, ring-fencing was not "a very sensible" long-term approach. When pressed by John Humphrys, he notably refused to say that the government should continue to protect the NHS, implying that it could be targeted for cuts (one wonders if the Tories will take the chance to demonstrate their "commitment" to the health service by slapping him down). 

With an eye to the current divisions over this summer's Spending Review, Cable said: "The problem about ring-fencing as an overall approach to policy, is that when you have 80 per cent of all government spending that’s ring-fenced, it means all future pressures then come on things like the army, the police, local government, skills and universities, the rest that I’m responsible for. So you get a very unbalanced approach to public spending."

It's worth noting that the Business Secretary is a long-standing critic of ring-fencing. At the last general election, the Liberal Democrats, unlike the Conservatives, argued that no area of public spending should spared from cuts. As Cable told the 2010 Lib Dem spring conference, "There can be no ring-fencing if we are serious about getting the public finances back on track". 

For now, there is little prospect of George Osborne following Cable and Fox's advice. Aware that no area of public spending is more popular with voters, Osborne and Cameron rightly believe that it would be politically toxic for the Tories to cut the NHS. In addition, the above-average rate of inflation in the health service means that there is a strong case for ensuring that its budget remains, at the very least, flat in real-terms. But as Osborne continues to struggle to extract cuts from the "National Union of Ministers", the debate on ring-fencing is unlikely to go away. 

Business Secretary Vince Cable arrives for a cabinet meeting at 10 Downing Street. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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