George Osborne holding the red box before leaving 11 Downing Street to deliver his Budget. Photograph: Getty Images.
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The Budget showed Osborne’s greatest skill: the ability to rebrand his failure as success

The Chancellor has made a virtue of coalition government and of missing his deficit targets. 

For five years, George Osborne has been managing failure. The Chancellor’s sixth Budget, like its predecessors, was delivered in coalition; the presence of Nick Clegg and Danny Alexander on the government front bench is a permanent reminder of how the Conservatives fell short at the last general election. As his party’s chief strategist in 2010, Osborne continues to live in the shadow of that campaign.

This political failure was followed by an economic one. Osborne’s original ambition was to eliminate the structural deficit in a single term. The collapse of growth after he entered office forced him to postpone this goal. Higher-than-forecast borrowing cost the UK its triple-A credit rating, the metric that he had adopted as the defining test of his economic credibility. Few politicians have recovered from such a gap between promise and delivery.

Osborne’s skill has been to transform this political base metal into gold. He has been the great alchemist of this parliament. The Chancellor made a virtue of coalition government by co-opting the Lib Dems’ best ideas – increasing the personal tax allowance, granting new freedoms over pensions – and aggressively rebranding them as Conservative achievements. The Tories’ junior partners protest indignantly, reminding voters that David Cameron told Clegg during the first 2010 leaders’ debate that the country could not “afford” to “take every­one out of their first £10,000 of income tax”. (Osborne's Budget increased the threshold to £10,800.) But, as Ronald Reagan observed: “If you’re explaining, you’re losing.”

When the near-disappearance of growth almost halted deficit reduction, Osborne chose not to impose additional fiscal tightening, instead redefining austerity as a two-term project. Labour has been left unsure whether to applaud the Chancellor for adopting the more moderate path it advocated (“a victory for sensible Keynesian thinking” was how his shadow, Ed Balls, recently described it to me) or to denounce him for failing on his own terms. In both cases, it has been forced to concede that it, too, would impose austerity after the election, an admission that has corroded its left-wing support. There are some Conservatives who wonder aloud whether greater deficit reduction would have been more politically hazardous, liberating Labour to promise the return of big spending.

Osborne’s greatest act of conjury, as ­fiscal boundaries have shifted, has been to entrench an image of himself as a figure of unbending constancy. Aides say that the Chancellor, whose once-poor approval ­ratings now exceed those of the three main party leaders, is congratulated by the public on “sticking to the plan” during his hard-hat tours. Like Margaret Thatcher (who was sometimes for turning), he knows that, in politics, appearance matters more than reality.

The truth is that Osborne has changed. Midway through the parliament, after the humbling experience of his 2012 “omni­shambles” Budget, he began to remake himself as a more complex and sophisticated politician. Osborne now speaks of the state as an ally as often as he does of it as an enemy and compares himself to Michael Heseltine. He has resurrected the cause of “full employment” (albeit more loosely defined than in previous decades), championed increases in the minimum wage (which will rise by 3 per cent, to £6.70 an hour, from October) and begun the construction of a “northern powerhouse” to challenge London’s hegemony. This ideological rebalancing is driven by Osborne’s Huddersfield-born, comprehensive-educated adviser Neil O’Brien, who wrote of the need for the Tories to decontaminate their brand in urban regions during his time as director of Policy Exchange. That Osborne embraced such an interesting thinker is evidence, say Tory MPs, of his intellectual restlessness, contrasting him with the dependable but unimaginative Cameron.

But like a rock star whose new album includes traditional material for older fans, the Chancellor is playing some familiar tunes. He has revived his 2007 pledge to raise the inheritance tax threshold to £1m. It was this policy that spooked Gordon Brown into abandoning plans for an early election and that earned Osborne his reputation as a strategic grandmaster. But the politics is not uncomplicated for him. If the measure will appeal to aspirational voters, the decision to prioritise the reduction of a tax paid by just 4.9 per cent of estates risks reinforcing the Tories’ status as the party of the privileged. Few policies more sharply contradict Michael Gove’s exhortation to be “warriors for the dispossessed” and to penalise “the undeserving rich”.

The Budget promised less post-election austerity than implied by the Autumn Statement, as Osborne sought to neutralise Labour's 1930s attack line. But because of his ambition of a surplus by the end of the next parliament, accompanied by no further tax rises, a fiscal chasm remains between his plans and those of Labour. Ed Balls’s decision to leave room to borrow to invest would give him nearly £30bn of additional spending each year.

It was partly the fear of massacred public services that denied the Tories a majority in 2010, in the most propitious circumstances. Osborne’s wager is that their unexpected resilience will persuade voters that further austerity is tolerable; that fear of a “tax bombshell” and “economic chaos” under Labour will predominate.

When the Tories entered office, some doubted that this question would even arise. The belief was that they would be evicted from government on a wave of popular outrage over the cuts. But the wave never came. Osborne has managed failure well indeed. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 19 March 2015 issue of the New Statesman, British politics is broken

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Can the disciplined Democrats defeat Trump’s maelstrom of chaos?

The Democratic National Convention has been exquisitely stage-managed and disciplined. But is it enough to overcome Trump’s news-cycle grabbing interventions?

The Democratic National Convention did not begin auspiciously.

The DNC’s chair, Debbie Wasserman Schultz, was unceremoniously launched as if by an ejector-seat from her job on the eve of the convention, after a Wikileaks dump of internal emails painted a picture of a party trying to keep the insurgent candidate, Vermont senator Bernie Sanders, from blocking Hillary Clinton’s path to the nomination.

One email, in which a staffer suggests using Sanders’ Jewish faith against him as a candidate in order to slow his insurgent campaign, was particularly damning in its optics and Schultz, who had tweeted with some hubris about her Republican opposite number Reince Priebus during last week’s Republican convention in Cleveland, had to fall on her sword.

Clinton’s pick of Tim Kaine as a running-mate – a solid, safe, and unexciting choice compared to a more vocal and radical campaigner like Elizabeth Warren – was also criticised, both by the media, with one commentator calling him “a mayonnaise sandwich on wholewheat bread”, and by the left of the party, who still held out hope that the Democratic ticket would have at least one name on it who shared the radical vision of America that Sanders had outlined.

On top of that, Kaine, who is a Catholic, also disappointed many as a vice-presidential pick because of his past personal history of opposition to abortion. Erin Matson, the co-director of the reproductive rights group ReproAction, tweeted that Kaine being added to the ticket was “tremendously disappointing”.

On the other side, Donald Trump had just received a poll bump following a terrifying speech which recalled Richard Nixon’s 1968 convention address. Both speeches appealed to fear, rather than hope; many are calling Trump’s keynote his “Midnight in America” speech. Just before the Democrats convened, analyst par excellence Nate Silver and his site, 538.com, forecast Trump’s chance of victory over Clinton in November at above 50 per cent for the first time.

On top of that, Bernie Sanders more vocal supporters arrived at the Democratic convention – in Philadelphia in the grip of a heatwave – in relative force. Protests have already been more intensive than they were at the RNC, despite all expectations to the contrary, and Sanders delegates disrupted proceedings on the first day by booing every mention of Hillary Clinton’s name.

But then, things appear to turn around.

The second day of the convention, which saw Hillary Clinton formally nominated as the first female presidential candidate in American history, was less marred by protest. Bernie Sanders addressed the convention and endorsed his erstwhile rival.

Trump’s inability to stop prodding the news cycle with bizarre non-sequiturs turned the focus of what would otherwise be a negative Democratic news cycle back onto him; an unforced error which led to widespread, if somewhat wild, speculation about his possible links with Putin in the wake of the news that Russia had been behind the email hack and lightened some of the pressure on the Democrats.

And then Michelle Obama took the stage, delivering an oration of astonishing power and grace (seriously, watch it – it’s a masterclass).

Compared with the RNC, the Democratic National Convention has so far been exquisitely stage-managed. Speakers were bookended with pithy, designed-for-virality videos. Speakers started on time; headliners played in primetime.

Both Trump and Clinton have now addressed their conventions before their headline speech remotely, via video link (Trump also engineered a bizarre early-convention pro-wrestling-style entrance), which put observers of both in mind of scenes from V for Vendetta.

But the imagery of Clinton’s face appearing on screen through a graphic of shattering glass (see what she did there?) will likely be one of the moments that sticks most in the memory of the electorate. It must kill the reality TV star to know this, but Clinton’s convention is getting better TV ratings so far than the RNC did.

Michelle Obama’s masterful speech in particular provided stark contrast with that of Melania Trump – an especially biting contrast considering that parts of the latter’s speech last week turned out to have been plagiarised from the former. 538’s forecast saw Clinton slide – barely – back into the lead.

A mayonnaise sandwich Tim Kaine might be, but he is nonetheless looking like a smart pick, too. A popular senator from a key swing state – Virginia – his role on the ticket is not to be a firebrand or an attack-dog, but to help the former secretary of state reach out to the moderate middle that Trump appears to be leaving entirely vacant, including moderate Republicans who may have voted for Mitt Romney but find Trump’s boorish bigotry and casual relationship with the truth offputting. And the electoral mathematics show that Trump’s journey to victory in the electoral college will be extremely difficult if Kaine swings Virginia for Clinton.

Ultimately, the comparison between the Democratic convention in Philadelphia so far and last week’s chaotic, slapdash and at times downright nutty effort in Cleveland provides a key insight into what this election campaign is going to be like: chaos and fear on one side, but tight discipline on the other.

We will find out in November if discipline is enough to stop the maelstrom.

Nicky Woolf is a writer for the Guardian based in the US. He tweets @NickyWoolf.