Morning Call: pick of the papers

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

1. From rescue to recovery? It's not as simple as that, George (Independent)

Labour’s position in relation to spending is more astute than the Chancellor suggests, writes Steve Richards. 

2. Balls appeals to the few, Osborne the many (Guardian)

Labour's attack on the chancellor's spending plans is smart, but will only work with those who have made their minds up, says Martin Kettle. 

3. Julia Gillard: Sadly, this lady was for turning (Independent)

As with Thatcher, she had become an electoral liability to her party, writes Geoffrey Robertson.

4. Soon, we are likely to need a braver chancellor than this one (Daily Telegraph)

Osborne is good at the politics, but flunks the economics, writes Peter Oborne. For how long can this continue?

5. George Osborne master of the game of divisive politics (Guardian)

The Chancellor has tried to gloss over a dire financial situation by playing the game he knows best, writes Jonathan Freedland. 

6. Gordon Brown's plans to join the euro (Daily Telegraph)

The great saviour of the pound actually toyed with ditching it, says Sue Cameron.

7. On the spectrum of deceit, ministers have gone off the scale (Guardian)

Statistics have long been argued one way or the other, but this government twists them beyond reality to suit its ruthless agenda, writes Zoe Williams.

8. Shock horror: Britain less secretive than ever (Times)

Revelations about police subterfuge and the alleged CQC cover-up show how much more open we are as a society, says David Aaronovitch. 

9. Osborne sets a trap for Labour on welfare (Financial Times)

Sticking to the government’s benefits cap will torture the opposition, writes Janan Ganesh.

10. Can the state be trusted to do anything right? (Daily Telegraph)

Revelations of unacceptable snooping and the draconian treatment of whistleblowers are making a mockery of the government's quest for 'transparency', says Allison Pearson.

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.