Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. George Osborne's optimism disappears in autumn statement (Guardian)

The chancellor's bright-eyed optimism that served as the coalition's defining mission turns to dust in the Commons, writes Jonathan Freedland.

2. Time to use room for manoeuvre (Financial Times)

It is specious for Osborne to blame events beyond government control, says Martin Wolf.

3. We can see clearly on smog. So why not CO2? (Times) (£)

The arguments of climate-change sceptics are eerily reminiscent of those made by opponents of the Clean Air Act, writes David Aaronovitch.

4. Chancellor makes best of bad job (Financial Times)

There may be worse to come but Labour has been left scratching its head, says Janan Ganesh.

5. A seasonal warning on rape? Don't ask a Met policeman (Guardian)

There's nothing here to reduce sex crime or even any admission of officers' failure – just hyper-caution for the yet-to-be-raped, says Zoe Williams.

6. The day the Chancellor reneged on his promise (Daily Telegraph)

Osborne’s fiscal gutlessness in this budget shows a failure to engage with the enormity of the crisis, argues Peter Oborne.

7. Old rivalries stir in Japan and Korea (Financial Times)

The differences in the elections in Asia’s second and fourth-largest economies are striking, writes David Pilling.

8. We may never learn to love the Chancellor, but the alternative would be so much worse (Daily Mail)

Osborne's medicine may be harsh but Ed Balls would be economic poison, says Max Hastings.

9. Phoney war with Syria is better than a real one (Independent)

Signs that Assad might use his chemical weapons could change the rules, says an Independent editorial.

10. A global battle for internet freedom puts Leveson in perspective (Guardian)

There's no reason ethical standards have to slip online, writes Timothy Garton Ash. The real challenge for journalism is how to make the internet pay.

Photo: Getty Images
Show Hide image

Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

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