Cable and Hammond fight on as Osborne swings his axe again

Six more departments agree to cuts but Defence, Business, Education, Work and Pensions and Transport are yet to settle.

George Osborne's unusual running commentary on the Spending Review continues. In addition to the seven departments previously named as agreeing to cuts of "up to" 10 per cent, the Treasury has announced that Osborne has reached settlements with the Home Office (with counter-terrorism policing protected), DEFRA, DCMS, the Scotland Office, the Wales Office and the Law Officers Department (incorporating the Crown Prosecution Service, the Treasury Solicitor's Department and the Serious Fraud Office), all of which will be cut by an average of 8 per cent. The seven to settle last month were Justice, Energy, Communities, the Foreign Office, the Cabinet Office, the Treasury and the Northern Ireland Office.

But while the majority of departments have now agreed to further cuts, the absence of some of the biggest spenders from the list (Education and the DWP, as well as Transport and Business) means that, with just 12 days to go, the Treasury still has less than a third (£3.6bn) of the £11.5bn of cuts sought by Osborne. 

Health, International Development and the schools section of the Education budget are all officially protected but the rest still face the Chancellor's axe. Although Theresa May, one of the ring-leaders of the famed National Union of Ministers (NUM) has settled, Vince Cable (Business) and Philip Hammond (Defence) are fighting on. After the head of the army Sir Peter Wall warned that further cuts could damage the force's "professional competence" and "become quite dangerous, quite quickly", the latter is under particular pressure to prevent significant reductions. But Alexander made it clear that he was in no mood to offer special treatment. "In a department where there are more horses than tanks there is room for efficiency savings," he told Sky News. As for Cable, he has previously warned that "further significant cuts will do enormous damage to the things that really do matter like science, skills, innovation and universities", a message that was echoed by the CBI in its Spending Review submission this week. It suggested that £700m of medical research funding currently paid for by the Business Department could be transferred to Health, a move that would break the spirit, if not the letter, of the NHS ring-fence. 

Alexander also signalled that while there would be no further welfare cuts (after £3.6bn were announced in last year's Autumn Statement), this did not mean the Department for Work and Pensions was protected. He pointed out that welfare spending is classified as "annually managed expenditure", rather than departmental spending, adding that "there are lots of areas where the DWP has the capacity to make savings". 

Defence Secretary Philip Hammond stands in front of a Rapier System ground-to-air missile launcher during a visit to RAF Waddington near Lincoln. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.