Why is the Spending Review being held now? So Osborne can try and beat up Ed Balls

The Chancellor's decision to set out plans for 2015-16 nearly two years in advance has everything to do with politics and nothing to do with economics.

One question that has been asked all too rarely in coverage of the Spending Review is "why it is being held now?" There is no constitutional or economic requirement for George Osborne to set out spending plans for 2015-16 this far in advance. The current spending period (2011-15) doesn't end until April 2015 and it would have been prudent to wait until the preceding October (as in the case of the previous two reviews) when more recent forecasts will have been produced. 

Osborne's decision not to do so has everything to do with politics and nothing to do with economics. By announcing spending limits for the first year after the election, the Conservatives’' chief political strategist is seeking to draw the battlelines in his party's favour. He knows that if Labour accepts his plans it will be accused of intellectual surrender and that if it rejects them it will be accused of fiscal recklessness.

As apprentices of Gordon Brown, who similarly used the baseline as a weapon of political war, Ed Miliband and Ed Balls were well prepared for this trap. Their pre-emptive response was to accept Osborne's current spending limits, while leaving open the possibility of greater capital investment. For both political and economic reasons, it was the right decision. While the public remain sceptical of the Keynesian case for higher borrowing, polls show that they recognise the benefits of investing in areas such as housing, which boost output in the short and long run, generate employment and ultimately aid deficit reduction. With its own currency, its own independent monetary policy and its above average debt maturity, Britain can afford to borrow for growth without fear of a dangerous rise in bond yields. The risks of inaction, in the form of permanently lower growth and higher unemployment, far outweigh the risks of action.
 
Nearly two years before the end of the current spending period, Osborne's relentless focus should have been on generating growth (as ConservativeHome's Mark Wallace also argues this morning), not on squeezing £11.5bn of cuts out of ministers who may not even be around to implement them. But ever since he entered office, the Chancellor has rarely been able to resist the temptation to put politics before economics. Forget growth, forget jobs, forget deficit reduction even, Osborne has got an election to win and he thinks beating up Ed Balls will help. Your fate, dear voter, is the last thing on his mind today. 
George Osborne walks along The Strand towards a branch of Lloyds bank. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

The Chancellor’s furniture gaffe is just the latest terrible Tory political analogy

Philip Hammond assumes everyone has at least a second home.

“Right. Got to sort out Brexit. Go on the radio to avoid questions about it and all that. But first of all, let me work out where I’m going to put the ottoman and the baby grand. Actually, maybe I’ll keep them in one of my other properties and leave a gap in my brand new one for a bit, just to get a feel for the place. See where everything will fit in after I’ve grown familiar with the space. Bit of pre-feng shui,” mused the Chancellor. “What?”

These were Philip Hammond’s precise words on BBC Radio 4’s Today programme this morning. OK, I’ve paraphrased. It was a pouffe, not an ottoman. But anyway, he seemed to believe that the metaphor for Brexit we would most relate to is the idea of buying a second, or another, home.

“When you buy a house, you don’t necessarily move all your furniture in on the first day that you buy it,” he reasoned with the presenter.

Which, of course, you do. If you’re a normal person. Because you’ve moved out of your former place. Where else is your furniture going to go?

Rightly, the Chancellor has been mocked for his inadvertent admission that he either has an obscene amount of furniture, or real estate.


But Hammond is not alone. Terrible political analogies – particularly household metaphors – are a proud Tory tradition that go back a long way in the party’s history.

Here are some of the best (worst) ones:

David Cameron’s Shredded Wheat

When Prime Minister, David Cameron tried to explain why he wouldn’t stand for a third term with a cereal metaphor. “Terms are like Shredded Wheat. Two are wonderful, but three might just be too many.”

It’s a reference to an old advertising slogan for the breakfast staple, when it came in big blocks rather than today’s bite-sized chunks. It turned into a bit of a class thing, when it emerged that Shredded Wheat had been served in Eton’s breakfast hall when Cameron was a schoolboy.

Boris Johnson’s loose rugby ball

When asked if he wants to be Prime Minister, Boris Johnson said “no” the only way he knows how – by saying “yes” via a rugby metaphor:

“If the ball came loose from the back of the scrum, which it won’t of course, it would be a great, great thing to have a crack at.”

George Osborne’s credit card

In a number of terrible household analogies to justify brutal cuts to public services, the then chancellor compared the budget deficit to a credit card: “The longer you leave it, the worse it gets.” Which, uh, doesn’t really work when the British government can print its own money, increase its own revenue anytime by raising taxes, and rack up debt with positive effects on growth and investment. A bit different from ordinary voters with ordinary credit cards. But then maybe Osborne doesn’t have an ordinary credit card…

Michael Gove’s Nazis

In the run-up to the EU referendum, the Brexiteer and then Justice Secretary Michael Gove compared economic experts to Nazis:

“Albert Einstein during the 1930s was denounced by the German authorities for being wrong and his theories were denounced, and one of the reasons of course he was denounced was because he was Jewish.

“They got 100 German scientists in the pay of the government to say that he was wrong and Einstein said: ‘Look, if I was wrong, one would have been enough’.”

Gove had to apologise for this wholly inappropriate comparison in the end.

Iain Duncan Smith’s slave trade

Another terrible historical evocation – the former Work & Pensions Secretary Iain Duncan Smith compared the Tories’ “historic mission” to reform welfare and help claimants “break free” to the work of anti-slavery campaigner William Wilberforce:

“As Conservatives, that is part of our party’s historic mission. Just look at Wilberforce and Shaftesbury: to put hope back where it has gone, to give people from chaotic lives security through hard work, helping families improve the quality of their own lives.”

Boris Johnson’s Titanic

A rather oxymoronic use of the adjective “titanic” from Johnson, when he was discussing the UK leaving the EU: “Brexit means Brexit and we are going to make a titanic success of it.”

I prefer the more literal reading of this from Osborne, who was present when Johnson made the remark: “It sank.”

Anoosh Chakelian is senior writer at the New Statesman.

0800 7318496