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George Osborne has strewn the government’s path with policy landmines

The Chancellor glosses over the fact that working people feel the brunt of his benefit cuts as much as the jobless.

One of David Cameron’s great concerns ahead of the Autumn Statement on 5 December was the need to avoid “split-screen moments”. This is No 10 code for policy reversals so stark that they might be ridiculed in an election campaign by broadcasting two images of the Prime Minister side by side – before and after – saying opposite things.  

That is why benefits enjoyed by the elderly – winter fuel payments, free bus passes and TV licences – are untouchable in discussions of welfare cuts. Cameron stared down the barrel of a TV camera in live pre-election debates in 2010 and promised to leave those privileges alone. Memory of that footage silences talk of a raid on pensioner perks.

When the Prime Minister’s personal dignity is not at stake, the government is unafraid of a U-turn. Whitehall stank of burning rubber for weeks after the last Budget, as the Treasury skidded 180 degrees over ill-considered tax wheezes – on pasties, on caravans, on charities. Cameron and George Osborne were determined to avoid a similar unravelling of the Autumn Statement.

Yet the whole thing was an epitaph for buried economic promises. None of the things that the Chancellor said would happen to growth, to the deficit or to the national debt is happening as forecast. His plan was to fix the public finances and restore prosperity before an election in 2015. Now he pleads for time, like a cowboy builder, surrounded by the rubble of a bodged repair, explaining to the appalled homeowner that the job is more complicated than it looked.

Midterm martyr

Osborne believes the public can be persuaded to stick with the current contractor as long as the risk of switching to someone else is painted in sinister enough terms. That optimism is underpinned, according to those who work with the Chancellor, by his self-image as a crusader, martyred in midterm opinion polls for the greater glory of Budget rectitude. “He is confident he will be remembered as a historic chancellor who took the difficult decisions for the sake of the country,” says one senior Treasury mandarin. Osborne hopes to cast Labour as the party that hides from the truth about its responsibility for the economic mess and what is required to fix it.

That might be a winning attack if Ed Mili­band’s campaign ignores the deficit and debt entirely. In public, senior Tories portray Labour’s position in those terms. Privately, they know the opposition will not make things so easy for them. The working assumption in Downing Street is that Ed Balls will offer to match the broad outline of coalition spending plans some time before the next election. The shadow chancellor’s team says it is too early to be talking about such commitments but there is unmistakable intent in Balls’s office to kill the “deficit denial” charge before 2015.
Meanwhile, the immediate priorities for Labour are pinning the badge of economic failure on the coalition and provoking public
outrage at the thought that ordinary families are footing the bill instead of the Tories’ millionaire chums.

Osborne is alert to the potency of that attack. He could hardly ignore the savage reception for his decision in March to cut the 50p top rate of income tax. Chastened, he inserted symbolic raids on wealth in his Autumn Statement – more tax on high-earner pension contributions, a bigger levy on banks. He boasted that the burden on low-income households would be eased with a freeze in petrol duty and a fresh rise in the income tax personal allowance.

Policy minds in No 10 are focused almostexclusively on ways to win the affections of the “squeezed middle” – those whose wages have not kept pace with the cost of living. Very senior Cameron advisers have made it clear to underlings that the Prime Minister will only look at new policy ideas if they speak to the concerns of those hard-pressed families.

The most urgent Downing Street discussions these days are about housing, childcare, energy bills and fuel costs. Gone are the nebulous
musings about the nature of the state that went on when Steve Hilton was Cameron’s quixotic head of policy. Hilton left Downing Street in May but his legacy formally expired with the damp-squib election of police and crime commissioners (PCC) last month. “PCC elections were the last, dying gasp of the Hilton project,” says one Downing Street insider. “Cameron is now dealing with bread-and-butter issues.”

Despite much polarised public polemicising, Labour and the Tories are converging on the same electoral terrain. Senior strategists in both parties are scouring data from a new online tool that maps public anxiety about household finances and confidence in the future. They know the election can be won with the right message for voters who feel pressed for time, strapped for cash and ripped off on all sides.

Broken promises

Labour’s handicap in reaching out to that group is voters’ wariness of a party that was so recently evicted from office. The Tories’ problem is that the coalition has already legislated for billions of pounds of cuts that will hit precisely the people they are now intent on wooing. Over the next year, cuts to tax credits, child benefit, housing benefit and council tax benefit will all make life harder for financially precarious families – including many with jobs.

The Chancellor glosses over the fact that working people feel the brunt of his benefit cuts as much as the jobless. In so doing, he has strewn the government’s path ahead with policy landmines – nasty fiscal traps that will detonate under the voters who already suspect the Tories are not on their side. They are unlikely to be persuaded by the Chancellor’s occasional, ostentatious displays of charity for the many and confiscation from the few.

Nor will their pain be easily justified as the necessary price for balancing the books, since the books will be unbalanced at the next election. No amount of fiddling in the margins can disguise the contrast between what the Tories said they would achieve and what has happened. It doesn’t look good however you play it. David Cameron is running a split-screen government.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 10 December 2012 issue of the New Statesman, Greece: a warning for Britain?

David Young
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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide