Osborne rules out further welfare cuts and tax rises as he targets Whitehall

The Chancellor reveals that he has already secured agreement from seven departments to cuts of up to 10 per cent and makes it clear that he's after more.

After reports at the weekend that he is struggling to secure agreement from cabinet ministers to any cuts in next month's Spending Review, George Osborne has taken the unusual step of touring the studios to reveal the progress he's made so far. On ITV's Daybreak, he announced that seven departments had "agreed provisionally" to cuts of up to 10 per cent, mentioning Justice, Energy and Communities by name (the others are reported to be the Foreign Office, the Cabinet Office, the Treasury  and Northern Ireland). He later added on BBC News that this meant he was now "about 20 per cent of the way there"

Today's Telegraph reports that Iain Duncan Smith has offered to cut welfare by another £3bn in order to protect spending on defence and the police, but Osborne made it clear that with the Lib Dems opposed to any further welfare cuts, this was not an option. "We've already accepted big reductions in welfare, including big reductions for this year, now we've got to look for savings in Whitehall, in government, in bureaucracy," he said. And he made it clear that this would include further cuts to the Home Office and Defence, despite the public protestations of Philip Hammond and Theresa May. While Osborne emphasised that he was "not going to do things that are going to endanger the security of the country, either at home or abroad", he added, "that doesn't mean you can't find savings in the way these big departments operate." In addition to dampening Tory hopes of further cuts to welfare, Osborne also signalled that had no plans to introduce further tax rises on top of those announced in the Budget. "I am in effect ruling it out, I'm looking for the money from Whitehall", he said. 

Challenged on why he was having a Spending Review at all, when he might not be in government for the period in question (2015-16), Osborne pointed out that "the financial year starts before the general election" and also revealed his underlying political motive. The review, he said, would raise the "very interesting question" of whether Labour "would match these plans". Should Labour fail to do so, Osborne will accuse them, as the Tories did in 1992, of planning a "tax bombshell" or more of the borrowing "that got us into this mess in the first place". After the Chancellor's pre-Spending Review report this morning, that is a dilemma Ed Miliband and Ed Balls will soon to have to confront. 

George Osborne arrives at media company Unruly, on April 25, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty Images.
Show Hide image

Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.