Morning Call: pick of the papers

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

1. The worst thing the Tories can do is catch the Ukip bug (Guardian)

Eastleigh punished Cameron for not finishing his modernisation project, says Jonathan Freedland. Now Conservative voters have somewhere else to go.

2. The case of Brussels and banker bonuses (Financial Times)

Europe has found a way to attack the UK that is sure to be favoured by much of the British public, writes Martin Wolf.

3. Two fingers up, but government not down (Times) (£)

The Eastleigh result means Clegg can still work with Cameron, writes Matthew Parris. That’s more important than any UKIP protest vote.

4. I used to argue when people said 'all parties are all the same’. I don’t now (Daily Telegraph)

Voters are punishing politicians who have lost touch with normal human instincts, says Charles Moore.

5. We have a long way to go before our immigration system is fair and simple (Independent)

I support tough controls on immigration, but the government has focused on the wrong end of the stick, says Labour's shadow immigration minister Chris Bryant.

6. Can Cameron prove himself a winner? (Daily Telegraph)

A new path to prosperity is the only means by which the Prime Minister and the Chancellor can return the Tories to favour, says a Telegraph editorial.

7. The west babbles on, and Assad is the winner (Independent)

Talks in Rome did nothing to hide the fact Syria's people have been betrayed, says Robert Fisk.

8. Grotesque myth that Red Ed leads a 'one nation' party (Daily Mail)

This electoral snub proves the party’s complete disconnection from hard-pressed and striving voters in the south of England, says Simon Heffer.

9. Beware of misreading Eastleigh result (Financial Times)

The by-election is a political, not electoral, problem for David Cameron, writes Robert Shrimsley.

10. What Labour could learn from Hollywood (Guardian)

Persona is as important in politics as it is in the movies, writes Marina Hyde. If only Ed Miliband would dump Ed Balls and recast Alistair Darling.

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How the Conservatives lost the argument over austerity

After repeatedly missing their deficit targets, the Tories can no longer present spending cuts as essential.

"The age of irresponsibility is giving way to the age of austerity," declared David Cameron at the Conservatives' 2009 spring conference. Fear of spending cuts helped deny his party a majority a year later but by 2015 the Tories claimed vindication. By framing austerity as unavoidable, they had trapped Labour in a political no man's land. Though voters did not relish cuts, polling consistently showed that they regarded them as necessary.

But only two years later, it is the Conservatives who appear trapped. An austerity-weary electorate has deprived them of their majority and the argument for fiscal restraint is growing weaker by the day. If cuts are the supposed rule, then the £1bn gifted to the Democratic Unionist Party is the most glaring exception. Michael Fallon, the Defence Secretary, sought to justify this largesse as "investment" into "the infrastructure of Northern Ireland" from "which everybody will benefit" - a classic Keynesian argument. But this did not, he hastened to add, mean the end of austerity: "Austerity is never over until we clear the deficit."

Britain's deficit (which peaked at £153bn in 2009-10) was the original and pre-eminent justification for cuts. Unless borrowing was largely eliminated by 2015, George Osborne warned, Britain's public finances would become unsustainable. But as time has passed, this argument has become progressively weaker. The UK has cumulatively borrowed £200bn more than promised by Osborne, yet apocalypse has been averted. With its low borrowing costs, an independent currency and a lender of last resort (the Bank of England), the UK is able to tolerate consistent deficits (borrowing stood at £46.6bn in 2016-17).

In defiance of all this, Osborne vowed to achieve a budget surplus by 2019-20 (a goal achieved by the UK in just 12 years since 1948). The Tories made the target in the knowledge that promised tax cuts and spending increases would make it almost impossible to attain - but it was a political weapon with which to wound Labour.

Brexit, however, forced the Conservatives to disarm. Mindful of the economic instability to come, Philip Hammond postponed the surplus target to 2025 (15 years after Osborne's original goal). Britain's past and future borrowing levels mean the deficit has lost its political potency.

In these circumstances, it is unsurprising that voters are increasingly inclined to look for full-scale alternatives. Labour has remade itself as an unambiguously anti-austerity party and Britain's public realm is frayed from seven years of cuts: overburdened schools and hospitals, dilapidated infrastructure, potholed roads, uncollected bins.

Through a shift in rhetoric, Theresa May acknowledged voters' weariness with austerity but her policies did not match. Though the pace of cuts was slowed, signature measures such as the public sector pay cap and the freeze in working-age benefits endured. May's cold insistence to an underpaid nurse that there was no "magic money tree" exemplified the Tories' predicament.

In his recent Mansion House speech, Philip Hammond conceded that voters were impatient "after seven years of hard slog” but vowed to "make anew the case" for austerity. But other Tories believe they need to stop fighting a losing battle. The Conservatives' historic strength has been their adaptability. Depending on circumstance, they have been europhile and eurosceptic, statist and laissez-faire, isolationist and interventionist. If the Tories are to retain power, yet another metamorphosis may be needed: from austerity to stimulus.

George Eaton is political editor of the New Statesman.

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