George Osborne leaves the HM Treasury building before heading to deliver his Autumn Statement. Photograph: Getty Images.
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Osborne stands by plan to continue cuts even after the deficit is gone

By insisting that a surplus of £23bn is necessary to reduce the national debt, the Chancellor has exposed himself to the charge that he is an ideologue. 

The reason the OBR now famously forecast that public spending would fall to its lowest level since the 1930s under George Osborne's plans is his intention to continue cutting even once the deficit has been eliminated. Owing to £14.5bn of additional tightening in 2019-20, the Chancellor is predicted to achieve a surplus of £23bn, far beyond what most economists consider necessary to stabilise the public finances (a surplus of £4.8bn is forecast in 2018-19). It is this that has allowed Labour to accuse the Tories (as Ed Miliband did at today's PMQs) of having a plan for "shrinking the state", rather than merely "balancing the books". The party believes that the fear of slashed and burned public services could win it the election. 

In an attempt to repair some of the political damage inflicted on the Tories, the Financial Secretary to the Treasury, David Gauke, told The Sunday Politics on 7 December that the party was not bound to a surplus of £23bn. He said: "We’ve made very clear we are committed to a surplus. At the moment the OBR predicts that we will have a surplus of £23bn, but we’re not making a commitment to the British people, 'that’s what the number will be in 2019'." 

Appearing before the Treasury select committee this afternoon, Osborne had the chance to do the same and dispel the image of him as an unrelenting axeman. But when questioned on the subject, he instead argued it was necessary to continue cutting in order to reduce the national debt as a share of GDP. He also said: "It’s absolutely the spending proposals that I submitted to the OBR." 

By emphasising the Tories' fiscal conservatism, Osborne is gambling that the voters will side with them over an opposition still viewed as profligate. But the opening he has provided for Labour means that fear of future cuts will now compete with fear of higher borrowing in the minds of voters. It is a battle that he is far from certain to win. As I noted yesterday, the latest ComRes/Independent survey found that 66 per cent do not believe that cuts should continue until the overall deficit has been eliminated with just 30 per cent in favour. 

Labour's shadow chief secretary to the Treasury, Chris Leslie, has said in response: "George Osborne has finally admitted he approved the plans for deeper cuts which the OBR says will take public spending as a share of GDP back to 1930s levels. 

"After two weeks when the Tories have tried to say it's somehow the BBC's fault, George Osborne has come clean that these are his plans. The Tories are now pursuing increasingly extreme and ideological plans for much deeper spending cuts which go well beyond balancing the books.

"In contrast Labour will take a tough but balanced approach to cut the deficit each year and balance the books as soon as possible in the next Parliament. Our plan will make sensible spending cuts in non-protected areas, fairer choices like reversing the Tory tax cut for millionaires and change our economy so we earn our way to rising living standards for all."

George Eaton is political editor of the New Statesman.

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Qatar is determined to stand up to its Gulf neighbours - but at what price?

The tensions date back to the maverick rule of Hamad bin Khalifa al-Thani.

For much of the two decades plus since Hamad bin Khalifa al-Thani deposed his father to become emir of Qatar, the tiny gas-rich emirate’s foreign policy has been built around two guiding principles: differentiating itself from its Gulf neighbours, particularly the regional Arab hegemon Saudi Arabia, and insulating itself from Saudi influence. Over the past two months, Hamad’s strategy has been put to the test. From a Qatari perspective it has paid off. But at what cost?

When Hamad became emir in 1995, he instantly ruffled feathers. He walked out of a meeting of the Gulf Cooperation Council (GCC) because, he believed, Saudi Arabia had jumped the queue to take on the council’s rotating presidency. Hamad also spurned the offer of mediation from the then-President of the United Arab Emirates (UAE) Sheikh Zayed bin Sultan al-Nahyan. This further angered his neighbours, who began making public overtures towards Khalifa, the deposed emir, who was soon in Abu Dhabi and promising a swift return to power in Doha. In 1996, Hamad accused Saudi Arabia, Bahrain and the UAE of sponsoring a coup attempt against Hamad, bringing GCC relations to a then-all-time low.

Read more: How to end the stand off in the Gulf

The spat was ultimately resolved, as were a series of border and territory disputes between Qatar, Bahrain and Saudi Arabia, but mistrust of Hamad - and vice versa - has lingered ever since. As crown prince, Hamad and his key ally Hamad bin Jassim al-Thani had pushed for Qatar to throw off what they saw as the yoke of Saudi dominance in the Gulf, in part by developing the country’s huge gas reserves and exporting liquefied gas on ships, rather than through pipelines that ran through neighbouring states. Doing so freed Qatar from the influence of the Organisation of Petroleum Exporting Countries, the Saudi-dominated oil cartel which sets oil output levels and tries to set oil market prices, but does not have a say on gas production. It also helped the country avoid entering into a mooted GCC-wide gas network that would have seen its neighbours control transport links or dictate the – likely low - price for its main natural resource.

Qatar has since become the richest per-capita country in the world. Hamad invested the windfall in soft power, building the Al Jazeera media network and spending freely in developing and conflict-afflicted countries. By developing its gas resources in joint venture with Western firms including the US’s Exxon Mobil and France’s Total, it has created important relationships with senior officials in those countries. Its decision to house a major US military base – the Al Udeid facility is the largest American base in the Middle East, and is crucial to US military efforts in Iraq, Syria and Afghanistan – Qatar has made itself an important partner to a major Western power. Turkey, a regional ally, has also built a military base in Qatar.

Hamad and Hamad bin Jassem also worked to place themselves as mediators in a range of conflicts in Sudan, Somalia and Yemen and beyond, and as a base for exiled dissidents. They sold Qatar as a promoter of dialogue and tolerance, although there is an open question as to whether this attitude extends to Qatar itself. The country, much like its neighbours, is still an absolute monarchy in which there is little in the way of real free speech or space for dissent. Qatar’s critics, meanwhile, argue that its claims to promote human rights and free speech really boil down to an attempt to empower the Muslim Brotherhood. Doha funded Muslim Brotherhood-linked groups during and after the Arab Spring uprisings of 2011, while Al Jazeera cheerleaded protest movements, much to the chagrin of Qatar's neighbours. They see the group as a powerful threat to their dynastic rule and argue that the Brotherhood is a “gateway drug” to jihadism. In 2013,  after Western allies became concerned that Qatar had inadvertently funded jihadist groups in Libya and Syria, Hamad was forced to step down in favour of his son Tamim. Soon, Tamim came under pressure from Qatar’s neighbours to rein in his father’s maverick policies.

Today, Qatar has a high degree of economic independence from its neighbours and powerful friends abroad. Officials in Doha reckon that this should be enough to stave off the advances of the “Quad” of countries – Bahrain, Egypt, Saudi Arabia and the UAE - that have been trying to isolate the emirate since June. They have been doing this by cutting off diplomatic and trade ties, and labelling Qatar a state sponsor of terror groups. For the Quad, the aim is to end what it sees as Qatar’s disruptive presence in the region. For officials in Doha, it is an attempt to impinge on the country’s sovereignty and turn Qatar into a vassal state. So far, the strategies put in place by Hamad to insure Qatar from regional pressure have paid off. But how long can this last?

Qatar’s Western allies are also Saudi Arabia and the UAE’s. Thus far, they have been paralysed by indecision over the standoff, and after failed mediation attempts have decided to leave the task of resolving what they see as a “family affair” to the Emir of Kuwait, Sabah al-Sabah. As long as the Quad limits itself to economic and diplomatic attacks, they are unlikely to pick a side. It is by no means clear they would side with Doha in a pinch (President Trump, in defiance of the US foreign policy establishment, has made his feelings clear on the issue). Although accusations that Qatar sponsors extremists are no more true than similar charges made against Saudi Arabia or Kuwait – sympathetic local populations and lax banking regulations tend to be the major issue – few Western politicians want to be seen backing an ally, that in turn many diplomats see as backing multiple horses.

Meanwhile, although Qatar is a rich country, the standoff is hurting its economy. Reuters reports that there are concerns that the country’s massive $300bn in foreign assets might not be as liquid as many assume. This means that although it has plenty of money abroad, it could face a cash crunch if the crisis rolls on.

Qatar might not like its neighbours, but it can’t simply cut itself off from the Gulf and float on to a new location. At some point, there will need to be a resolution. But with the Quad seemingly happy with the current status quo, and Hamad’s insurance policies paying off, a solution looks some way off.

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