What will you cut next, Mr Osborne?

The Tories' plans mean that tax giveaways can only be funded by even deeper cuts somewhere else. Labour should take a different path.

George Osborne’s speech did little to answer the question that is at the heart of the Tories’ plans for the next election: what will be cut next? The conference has opened with news of mortgage guarantees, tax giveaways and the introduction of a new 'Help to Work' programme, but this week’s announcements will be dwarfed in scale by the spending plans the government has already published earlier in the year, which promise a further £24bn of cuts in 2016 and 2017.

The Fabian Society’s commission on future spending choices has examined the impact these plans might have. We found that if all the cuts were levied on day-to-day public service spending, department budgets would fall by 8 per cent over two years. In principle these cuts could be spread thinly between public services, but continued protection for the NHS and schools is more likely. If all the areas George Osborne protected in this summer’s spending round were safeguarded again, on average, other public services would see their budgets fall by a quarter. Coming after so many cuts during this parliament, areas like local government, the criminal justice system and further education would face collapse.

At last year’s Conservative conference, George Osborne set out his alternative: a further £10bn of social security cuts. So far, in the face of Lib Dem resistance, he’s found only one third of that total - by restricting increases to many benefits to 1 per cent a year. Presumably a Conservative manifesto will promise further restrictions to social security and our commission looked at where £10bn of benefit cuts might come from. The news is not good for politicians looking to win elections: we concluded that savings on this scale would only be possible by reducing pensioner entitlements or means-testing all the remaining universal entitlements for working-age households.

Attacking the popular parts of social security would be highly controversial of course, but it would only slightly ease the pressures on public services. Even after £10bn of new social security cuts, many departments could still face budget cuts of 15 per cent over the two years from April 2016. So when Conservative politicians offer more of anything over the next 18 months, voters should beware. On their current spending plans, a new promise can only mean even deeper cuts somewhere else.

There is an alternative, according to the Fabian commission. With the economy finally growing again, big post-election reductions to social security and public service spending are a choice, not a necessity. Whichever party is in power, there will need to be financial discipline and tough choices, but there is also more room for manoeuvre than George Osborne seems to think. This is because today’s unexpectedly strong economic growth will translate into higher than predicted tax revenues. The Conservatives are earmarking this money for pre-election tax cuts, but it can instead be used to stop cuts. There is also the option of raising taxes for high income groups who are set to be the first to feel the benefits of recovery. Together these two measures would more or less avoid the need for cuts after 2015.

This week the Conservatives are confirming they would prefer a different route. Devoting the 'proceeds of growth' to pre-election tax cuts may seem like good politics, but it will create avoidable devastation to public services and further reduce public spending in areas critical for future economic success.

So far Labour has been silent on its post-2015 spending choices; it was the missing link for the party’s conference relaunch. But in due course Labour must set out spending plans which are fiscally water-tight but also entail spending more than the Conservative’s plan for cuts.

This is the, so far unspoken, dividing-line which will come to shape the next election. Labour should start to shout about it, because Conservative tax cuts will come with huge costs.

George Osborne arrives to deliver his speech to the Conservative conference in Manchester. Photograph: Getty Images.

Andrew Harrop is general secretary of the Fabian Society.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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