Morning Call: pick of the papers

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

1. The next election may be a year away, but Osborne is on the campaign trail. It’s a risky strategy (Independent)

A party’s pre-election "tax and spend" plans can withstand scrutiny for six months but not for a year and a half, says Steve Richards.

2. Minimum wage rise could be a Tory winner (Times)

Cameron needs a surprise move to rebuild his party’s image, writes Rachel Sylvester. It may come with a boost for the low paid.

3. Young should blame bad luck not policy (Financial Times)

The baby boomers enjoyed almost miraculously benign circumstances that will not be repeated, writes Janan Ganesh.

4. George Osborne's cuts are a squeeze too far (Guardian)

Cuts on the scale the chancellor is suggesting would be extreme – and they are not necessary, says IFS head Paul Johnson.

5. A Smaller State (Times)

The government is right to seek more cuts — but it is unfair to load the burden on to the young, says a Times editorial.

6. There's a new climate of diktat and fear sweeping through the NHS (Guardian)

An occupational therapist who won awards for her work has been sacked for querying cuts to a stroke unit, writes Polly Toynbee.

7. Cameron’s plan for 2014 is to prove he’s a man of his word (Daily Telegraph)

This year will be the Tory leadership’s chance to show that its promises are worth having, writes Benedict Brogan.

8. Take inspiration from Sarajevo, not Munich (Financial Times)

Pointless aggression belongs in the playground, not in international affairs, says Gideon Rachman.

9. Pragmatic public wants immigration mended, not ended (Independent)

People may prefer to see immigration at lower levels – but they don’t want to turn away the positive contribution from migrants, says Sunder Katwala.

10. Betting-shop machines sucking cash out of communities … this is what predatory capitalism looks like (Guardian)

While giving councils greater powers to block new gambling shops, it would be better to cut the maximum stake on fixed-odds betting terminals, says Aditya Chakrabortty.

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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.