Morning Call: pick of the papers

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

1. My plan to save the NHS – in the nick of time (Guardian)

All is not lost, says David Owen. We can still shield our health service from the ravages of a full-blooded external market.

2. A big play from Osborne could stop Labour hijacking his legacy (Daily Telegraph)

There is just about time between the March Budget and election day to make a difference, says Benedict Brogan. 

3. Rising populism is worthy of Nixonland (Financial Times)

At a time when elites are popularly resented, a silent majority is there for the taking, writes Janan Ganesh.

4. Why the ‘ethnicity effect’ terrifies Tories (Times) (£)

The statistics are inescapable and the implications huge: black and Asian voters are wary of voting Conservative, writes Rachel Sylvester.

5. HS2 shows that investment is not such a dirty word after all (Independent)

When the coalition first came to power, nothing much happened on high-speed rail, writes Steve Richards. So this sudden burst of energy is welcome, even if the impact remains years away.

6. A conspiracy of reasonable people (Financial Times)

If China stops playing by Davos rules, the golden years of the WEF will be over, says Gideon Rachman

7. When the rich are born to rule, the results can be fatal (Guardian)

I was schooled in a system that separated me from ordinary people's lives, writes George Monbiot. The same fate has befallen the global elite.

8. This bold vision will keep Britain on track (Daily Telegraph)

High-Speed 2 is a long overdue declaration that Britain still has ambition, says a Daily Telegraph leader.

9. High-speed rail is not the best way to spend £32bn (Independent)

With so much uncertainty as to both the costs and the benefits, this is no time for vanity projects like HS2, argues an Independent leader.

10. A welcome U-turn over secret courts (Daily Mail)

Ken Clarke’s U-turn over some of the more sinister provisions of his plan for secret court hearings shows he has heeded crucial objections, says a Daily Mail editorial. 

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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.