Boris Johnson and George Osborne at the Tate Modern on 20 February, 2015. Photograph: Getty Images.
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Boris has outflanked Osborne on the living wage and the top tax rate

The Conservative leadership rival's alternative Budget offers something for the left and the right. 

The next Conservative leadership contest has begun. Not every move that the contenders make should be viewed through this prism. But it is an inescapable reality that one of them will succeed David Cameron before the end of this parliament. 

In the first all-Conservative Budget since November 1996, George Osborne has an opportunity to raise his stock among his party by reducing the top rate of tax from 45p to 40p (as 160 Tory MPs have demanded). The absence of the Liberal Democrats from the government frontbench means that Osborne, one Conservative tells me, has "no excuse not to act". But in his interview with Andrew Marr yesterday, the Chancellor signalled that he does not intend to use his political freedom to cut the top rate on Wednesday. He emphasised that his "priority" was to deliver to "the promises upon which we were elected" (of which a cut in the top rate was not one): a £12,500 personal allowance and a £50,000 40p tax threshold. Osborne appears to have wisely concluded that it would be dangerously incongruous to also reduce taxes for the top 1.5 per cent of earners while austerity (such as tax credit cuts) continues elsewhere. 

The Chancellor was also notably lukewarm towards the argument that more companies should pay the living wage to compensate those whose in-work benefits will be reduced (as former No. 10 adviser Steve Hilton has recently proposed). He said that "the best answer" to this conundrum was to cut taxes and "to make sure your businesses are growing and profitable and that they can pay good salaries". At no point did he endorse the argument made by the left and, increasingly, the right that cheapskate corporations are denying their workers the pay they deserve.

In private meetings, I'm told, Osborne has consistently dismissed those (such as Jo Johnson, the universities minister and the author of the Conservative manifesto) who suggested that the Tories should annex Labour's policy of providing tax breaks to companies who raise salaries to living wage level. To him, this is statist meddling based on the false premise that firms who can afford to pay more aren't. As the Resolution Foundation's Gavin Kelly writes in an essential blog: "Perhaps the biggest misconception is the voguish notion that if tax credits are cut, employers will somehow decide to offer pay rises to fill the gap. This is saloon-bar economics espoused by some on both left and right. The available evidence suggests that the great majority of the gains from tax credits flow through to employees, not employers."

It is significant, then, that Osborne's most formidable rival for the Conservative leadership, Boris Johnson, has used his pre-Budget Telegraph column to advocate the changes the Chancellor has refused to offer (for now): a cut in the top rate of tax and the expansion of the living wage. The latter is proposed as political cover for the former: "We think of ourselves according to our relationship with others – and it is simply not fair that a Budget should put more disposable income in the pockets of the rich and less disposable income in the pockets of the poor. And that, alas, would be the result if we were to cut top-rate tax and simultaneously to cut in-work benefits without any compensating improvements in pay." Unlike Osborne, the Mayor of London contends that firms are using tax credits to artificially supress wages: "As for low pay, it isn’t a function of market forces. It’s being propped up by the taxpayer. That needs to end. And that means business has got to start paying its people a wage they can live on." 

It is an appealing pitch that offers something to both the right (a cut in the top rate) and the left (the living wage) of the Conservative Party. The Mayor has cast himself as a "one nation" figure more capable of performing the political gymnastics required to deliver free market policies. Unless Osborne surprises on Wednesday, Johnson's alternative Budget will retain political potency. 

George Eaton is political editor of the New Statesman.

Gage Skidmore via Creative Commons
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Donald Trump brings home his dark vision of America at the Republican convention

The Presidential nominee pledged: "Safety must be restored."

Donald Trump brought home the Republican convention Thursday night with a dark vision of contemporary America – a darkness he claimed only his leadership could lift. It was a lengthy, tightly-scripted speech framed around polarities – insiders and outsiders, criminals and victims, the United States and the rest of the world – and infused with righteous anger. And yet against the darkness, he offered not lightness but “greatness” – a bombastic, personalistic vision of how through sheer force of will he could right the American ship before it plunged irretrievably into the depths. “I alone can solve,” he famously tweeted earlier in the campaign. This was the 80-minute version.

Any presidential challenger, of course, has to lay out a set of problems they believe need fixing and a case for why their leadership might make a difference. It was the breathtaking scale and intensity of Trump’s diagnosis, and the lack of optimistic alternative to counterbalance it, that was notable compared to other acceptance speeches. He portrayed the United States as a country riddled with crime and corruption, a “rigged system” in which politicians like Hillary Clinton can evade justice, while police officers trying to protect its citizens become targets; a fearful country, its economy sluggish, its infrastructure crumbling, its security an illusion, and its international stature in freefall

For a candidate who has mocked the soaring rhetoric of President Obama (the “hopey-changey stuff,” as Sarah Palin once called it), it was perhaps not surprising that Trump’s speech would be short on uplift. It was at least more disciplined than his other campaign speeches, if in keeping with their tone and content – the much-maligned teleprompter rolling a script to which he largely stuck. (“He sounds presidential,” a lady behind me remarked, though his press conference Friday morning marked a reversion to free-wheeling form).

It was short on substance too, though acceptance speeches aren’t designed to be policy laundry lists like a State of the Union. Still, there were few specifics, beyond a pledge to revise tax laws which inhibit religious groups from political advocacy, and a newfound concern with student loans. It was daughter Ivanka’s speech that had the greater substantive heft, promising her father would push for new labour laws to help working mothers, and for affordable childcare in the US. Neither are traditional Republican positions, but the crowd seemed on board for anything Trump might offer.

He even had them cheering for LGBTQ rights, after recalling the tragedy in Florida last month, and the need to protect gay Americans from a “hateful foreign ideology” in radical Islam. “It is so nice as a Republican to hear you cheering for what I just said,” he commended the delegates in an unscripted moment. But whether they had really embraced this unexpected message – or if it was the anti-terror chaser that really got them on their feet – remains to be seen. In either case, it was a rare grace note in an otherwise bruising speech.

Presenting himself repeatedly as the candidate of “law and order,” Trump evoked Richard Nixon’s 1968 presidential campaign. At a time when American cities were erupting in race riots and protests over the Vietnam War, Nixon had pitched himself as the face of stability and security. Likewise Trump has reacted to the simmering racial tensions and terrorist attacks this summer with a hard-line stance on “lawlessness.” “Safety must be restored,” Trump said, in one of the eerier lines he delivered. Yet in his convention speech, Nixon had balanced his tough talk with a positive message – speaking of love, courage, and lighting a “lamp of hope” in partnership with the American people. 

Trump channeled another president in his speech, too, when he promised to give voice to “the forgotten men and women of our country” – drawing on the language of Franklin Roosevelt. Roosevelt had promised to aid “the forgotten man at the bottom of the economic pyramid” during the 1932 campaign. But Roosevelt’s solution to the forgotten man’s distress was economic internationalism – tearing down tariff walls and trading freely with the world – which the Republican Party then opposed. Trump’s solution is the protectionist policies Roosevelt had railed against.

Trump’s economic and security philosophy is encapsulated in another, more notorious phrase associated with that era: “America First.” A rallying cry for isolationists seeking to avoid US entanglement in World War II, it acquired an anti-Semitic taint. But Trump has employed it nonetheless, capturing as it does his core argument that America must do more to protect its own citizens against threats from within and without – from illegal immigrants, from radicalized Islamic terrorists, from the downsides of free international trade. Little wonder that former George W.

Bush staffer Nicolle Wallace announced that the Republican party she knew “died in this room tonight.” In embracing elements of isolationism, protectionism, and nativism, however, it is perhaps truer to say that Trump’s Republican party reverted to an earlier form.

Often disconcerting, at times mesmerizing, the question remains how effective this speech will be. The delegates responded enthusiastically to Trump’s fierce rhetoric, but many prominent Republicans had stayed away from the convention altogether. Combined with Senator Ted Cruz’s non-endorsement, Trump goes into the general election campaign without a fully united party behind him. For both partisans and the public, Trump’s speech offered a cast of villains to rally against, but no positive, unifying vision to rally behind – beyond the much-touted yet elusive “greatness,” of course. In a typical election year, that would seem a critical flaw in a campaign – but Trump loves to confound the naysayers. As his convention speech showed, he thinks the formula that got him this far - showcasing his fame and fanning Americans’ fears – can land him in the White House.