George Osborne with his special adviser Rupert Harrison at No. 10 Downing Street. Photograph: Getty Images.
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The Budget revealed Osborne's 35% strategy

Rather than seeking to craft a new electoral coalition, the Tories are just managing decline.

Under both Gordon Brown and George Osborne, the Budget has become the ultimate expression of the electoral priorities of a government. George Osborne’s giveaways to wealthy pensioners are truly telling of what the Chancellor worries about for 2015. The answer, it seems, is the Tory base.

All parties face a fundamental choice at elections between managing decline by trying to cling on to as much of their existing vote as possible or shaping a new electoral coalition. New Labour successfully won re-election twice by managing its declining vote share, whilst President Obama created a new electoral coalition between 2008 and 2012.

The big choice for Conservative strategy was whether to reassemble their 2010 coalition of support and craft a policy offer to bring them back, or to look to a new pool of voters, particularly Labour-inclined blue collar voters who either voted Labour in 2010 or sat out the election whilst still self-identifying as Labour. These are Robert Halfon’s voters. They are the voters that Jon Cruddas, Labour’s blue collar brahmin, was brought in to capture. Their opinions might be considered conservative on matters of immigration or welfare but progressive on public services or bashing the banks.

Blue collar voters hold the key to breaking out of the mid-30s poll ratings that currently make for the ceiling of Tory support or the floor of Labour’s. By increasing turnout amongst this group, Labour can reach the 40s. Equally, by flipping Labour’s working class support, the Tories could head for a majority. Beyond bread (beer) and circuses (bingo), the adoption of Halfonism would have been a truly dangerous strategic move by Osborne against Labour. Truly radical "Little Guy" Conservatism comes with a blend of Jesse Norman’s attacks on crony capitalism, Boris Johnson’s verve for housebuilding and Robert Halfon’s embrace of trade unionism.

If you want to know what Labour truly fears then there it is.

But "Beer and Bingo" is at best superficial engagement with blue collar voters falsely premised on the belief that they can be bought off with a good night out, rather than see their deeply held concerns about schools, hospitals, wages and housing addressed. What’s more, it risks reinforcing the perception that many voters have with the Tory high command as out of touch and lacking empathy.

Osborne has instead sought to manage decline. By seeking to win back Conservative-minded pensioners, Osborne aims only to bring Tory poll numbers out of the low 30s and into the mid-30s. He seeks to replay 2010. As Mike Smithson of Political Betting noted, some 58 per cent of UKIP supporters are over-55 and the vast majority of them are Tory 2010 voters.

Thus the Budget will produce more than a sugar high for Tory poll ratings. It should lock in a 2-3 per cent increase at a cost to UKIP that lasts through 2015. But it comes at the cost of the other more interesting, and potentially more rewarding, option: the blue collar appeal. Beer and bingo were crumbs from the table. Slashing income tax, building (as well as selling) council houses and raising the minimum wage to £7 was the alternative.

But Osborne made his choice and the Tory ceiling of the mid-30s is set for next year - and with it their last hopes for a majority.

Marcus Roberts is deputy general secretary of the Fabian Society

Marcus Roberts is an executive project director at YouGov. 

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Why Theresa May won't exclude students from the net migration target

The Prime Minister believes the public would view the move as "a fix". 

In a letter to David Cameron shortly after the last general election, Philip Hammond demanded that students be excluded from the net migration target. The then foreign secretary, who was backed by George Osborne and Sajid Javid, wrote: "From a foreign policy point of view, Britain's role as a world class destination for international students is a highly significant element of our soft power offer. It's an issue that's consistently raised with me by our foreign counterparts." Universities and businesses have long argued that it is economically harmful to limit student numbers. But David Cameron, supported by Theresa May, refused to relent. 

Appearing before the Treasury select committee yesterday, Hammond reignited the issue. "As we approach the challenge of getting net migration figures down, it is in my view essential that we look at how we do this in a way that protects the vital interests of our economy," he said. He added that "It's not whether politicians think one thing or another, it's what the public believe and I think it would be useful to explore that quesrtion." A YouGov poll published earlier this year found that 57 per cent of the public support excluding students from the "tens of thousands" target.

Amber Rudd, the Home Secretary, has also pressured May to do so. But the Prime Minister not only rejected the proposal - she demanded a stricter regime. Rudd later announced in her conference speech that there would be "tougher rules for students on lower quality courses". 

The economic case for reform is that students aid growth. The political case is that it would make the net migration target (which has been missed for six years) easier to meet (long-term immigration for study was 164,000 in the most recent period). But in May's view, excluding students from the target would be regarded by the public as a "fix" and would harm the drive to reduce numbers. If an exemption is made for one group, others will inevitably demand similar treatment. 

Universities complain that their lobbying power has been reduced by the decision to transfer ministerial responsibility from the business department to education. Bill Rammell, the former higher education minister and the vice-chancellor of Bedfordshire, said in July: “We shouldn’t assume that Theresa May as prime minister will have the same restrictive view on overseas students that Theresa May the home secretary had”. Some Tory MPs hoped that the net migration target would be abolished altogether in a "Nixon goes to China" moment.

But rather than retreating, May has doubled-down. The Prime Minister regards permanently reduced migration as essential to her vision of a more ordered society. She believes the economic benefits of high immigration are both too negligible and too narrow. 

Her ambition is a forbidding one. Net migration has not been in the "tens of thousands" since 1997: when the EU had just 15 member states and the term "BRICS" had not even been coined. But as prime minister, May is determined to achieve what she could not as home secretary. 

George Eaton is political editor of the New Statesman.