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.

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How worried are Labour MPs about losing their seats?

Despite their party's abysmal poll ratings, MPs find cause for optimism on the campaign trail. 

Labour enters the general election with subterranean expectations. A "good result", MPs say, would be to retain 180-200 of their 229 MPs. Some fear a worse result than 1935, when the party won just 154 seats. Rather than falling, the Conservatives' poll lead has risen as the prospect of electing a government concentrates minds (last night's YouGov survey, showing the Tories a mere 16 points ahead, was an exception).

Though Conservative strategists insist they could lose the election, in an attempt to incentivise turnout, their decision to target Labour MPs with majorities as high as 8,000 shows the scale of their ambitions (a Commons majority of circa 150 seats). But as well as despair, there is hope to be found in the opposition's ranks.

Though MPs lament that Jeremy Corbyn is an unavoidable drag on their support, they cite four reasons for optimism. The first is their local reputation, which allows them to differentiate themselves from the national party (some quip that the only leaflets on which Corbyn will feature are Tory ones). The second is that since few voters believe the Labour leader can become Prime Minister, there is less risk attached to voting for the party (a point some MPs make explicit) "The problem with Ed Miliband and the SNP in 2015 was that it was a plausible scenario," a shadow minister told me. "It was quite legitimate for voters to ask us the question we didn't want to answer: 'what would you do in a hung parliament?' If voters have a complaint it's usually about Jeremy but it's not the case that he looks like he can become prime minister."

The third reason is the spectre of an omnipotent Tory government. MPs appeal to voters not to give Theresa May a "free hand" and to ensure there is some semblance of an opposition remains. Finally, MPs believe there is an enduring tribal loyalty to Labour, which will assert itself as polling day approaches. Some liken such voters to sports fans, who support their team through thick and thin, regardless of whether they like the manager. Outgoing MP Michael Dugher (who I interviewed this week) was told by an elderly woman: "Don't worry, love, I will still vote Labour. I vote for you even when you're rubbish."

Ben Bradshaw, the long-serving MP for Exter, who has a majority of 7,183, told me: "We're not anything for granted of course. On the current national polling, the Tories would take Exeter. But having covered five polling districts, although the leadership is undoubtedly a big issue on the doorstep, most people say they'll still vote for me as their local MP and we're not detecting any significant shift away from 2015. Which is slightly puzzling given the chasm in the opinion polls." Bradshaw also promotes himself as "the only non-Tory MP in the south-west outside Bristol": a leaflet shows a blue-splattered map with a lone red dot. The Labour MP warns voters not to be left in a "one-party state". 

As in 2010, Labour may yet retain more seats than its vote share suggests (aided by unchanged boundaries). But the fate of the Liberal Democrats in 2015 - when the party was reduced from 56 MPs to eight - shows that local reputations are worth less than many suppose. Theresa May has succeeded in framing herself as a figure above party interests, who needs a "strong hand" in the Brexit negotiations. At the very moment when a vigorous opposition is needed most, Labour has rarely been weaker. And when the public turn resolutely against a party, even the best men and women are not spared.  

George Eaton is political editor of the New Statesman.

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