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Osborne tells the same old story but this isn't a "Same Old Tory" Budget

The Chancellor wants to sound as if he has stuck to a plan. But he's made it up as he goes along, which is why Labour attacks miss their target.

Much of politics is about telling stories and one of the most successful tales woven in recent years is the one by the Chancellor about the spendthrift Labour government and the frugal coalition. The metaphors change – sometimes Gordon Brown didn’t mend the roof; sometimes he maxed out the national credit card; sometimes he crashed a car – but the underlying message is simple and it works. It is that Britain has no money because the last government spent it all, which explains why we are all feeling the pinch now, why life has been tough and, above all, why it would be a terrible idea to vote for Ed Miliband.

In historical and economic terms this account is silly and mendacious. It has proved, however, to be bloody effective. Crucially, it permitted an alignment of people’s understanding of their domestic finances – when you’ve borrowed too much you have to stop spending – with an accessible narration of the national financial challenge. It made sense of the need for austerity.

Now, at this point the Keynesians tear out their hair. The opposite is true, they cry. When the private sector retrenches, government must step in. If everyone stopped spending all at once, including the state, there would be a shortage of demand and the economy would grind to a halt. As indeed it did in the early years of this parliament. But as has been written countless times, Keynes’s Paradox of Thrift is a lot harder to explain in pithy soundbites than Osborne’s Parable of Paying Down Debts, (which, incidentally, he hasn’t done).

There was a moment in 2012 when it looked very much as if Osborne’s plan was over. The economy was stagnant; all of his original targets for deficit reduction and debt containment had been abandoned. At the time, the Treasury was saying that eurozone turbulence and other unforeseen events - snow; extra bank holidays - had blown things off course a little but the underlying programme was the right one and everything would be alright in time. Labour derided the Tories for suffocating growth by cutting “too far, too fast.” As it turns out, senior Tories were much more anxious at that time than they were letting on. (“Shitting themselves that growth wasn’t coming back,” is how one former advisor recently described the mood to me. Perhaps this is what Osborne had in mind when he boasted today that “we held our nerve.”)

All of that preamble helps make sense of the big political message in today’s Budget.

Labour somehow failed to pin the blame for stagnation on the government. Or rather, Ed Balls and Ed Miliband didn’t manage to scrub themselves clean of the pre-emptive blame that had been heaped on Labour. And now the economy is recovering, with growth established and unemployment falling. Osborne slipped the noose, which means he is free to tell the next chapter of his story. This time it is about saving. The Chancellor’s most significant announcements today were aimed at people – mostly but not exclusively pensioners – whose biggest complaint in recent years has been that interest rates are too low. For anyone with a variable rate mortgage, that has been a blessing and, as Osborne said in his speech, keeping money cheap has been a very deliberate strategy to support the economy. But it does mean savers and anyone planning to retire on the basis of their savings has felt pretty ripped off. Hence new super ISAs, special pensioner bonds, tax cuts and reliefs that make it easier for older people to earn better rates on their money and access more of their pension pot without being stung by HMRC.

At one level this is a straightforward pitch to older, middle class voters who were once reliably Tory but might now be leaning towards Ukip. It is the Chancellor looking after his party’s people, which is exactly what Chancellor’s always do. But the clever part is how it fits into the bigger narrative of national repair. It is a technical move – complex enough that many political journalists’ faces dropped as the prospect of an afternoon of numerical intricacy loomed. But it is also a thematic gesture, supporting Osborne’s longer narrative of prudence and frugality in implicit contrast with Labour’s wastefulness. He is renewing his domestic simile. He wants people to continue thinking of the national economy as they think of their own finances – after the belt-tightening comes the saving for a rainy day.

Although the Chancellor was careful not to declare that his austerity mission is anything like accomplished, he does claim that progress so far has been substantial and that only the Conservatives can be trusted not to blow it all. Osborne spoke about “gains that were hard-won by the British people” and warned against “going back to square one.” This  plea to let the incumbent  team (minus Lib Dems, ideally) finish the job is the central plank of the Tories 2015 general election offer.

To reinforce that message the Chancellor had to sound as if he was thinking for the long term. Much of the budget was dedicated to the ambition to rebalance the economy, which is something all parties claim they want to do. It means supporting regional growth, boosting exports and helping manufacturers, thus ending Britain’s traditional reliance on financial services and credit-fuelled consumer spending.

The interesting thing here is that Osborne’s language was all about intervention. He wants to build houses, underwrite exports, found research centres, fund local enterprise zones, fill pot holes and lay train tracks. This is more Heseltine than Thatcher (a feature of Treasury thinking I’ve written about before). Of course Labour will say it's all for show – too little, too late, old announcements recycled and rehashed etc. Yet it is significant that the Chancellor is not anywhere near as dogmatically laissez faire as many of his critics presume. His recognition that the hand of government can and should be involved in the task of making Britain competitive would have been quite sacrilegious in top Tory circles before the last election.  But then again, this is the man who racked up deficit spending and borrowing at the bottom of a recession while bringing forward infrastructure investment in a desperate bid to kick-start growth.

Osborne’s little intellectual secret is that, back in 2012, when Treasury pants were being soiled about the state of the economy, Keynesian methods made a discreet, modest comeback. The Chancellor’s plan is now nothing like the one he had four years ago. It has been mangled and rewritten as a peculiar hybrid of Peter Mandelson-style “strategic state” intervention, orthodox tax-cutting dry Thatcherism and a bit of Gordon Brown-esque technical jiggery-pokery.

That is one reason why Labour finds it consistently difficult to attack. Ed Miliband’s response in parliament didn’t even bother with the detail of what had just been announced. (Fair enough, really, given that didn’t get to see any of it in advance.) The opposition leader instead played out the greatest hits album of Labour attack lines: out of touch Etonians, tax cuts for millionaires, cost of living crisis and the all time classic Same Old Tories. Except it didn’t work on this occasion because, much though he looks and sounds the part, Osborne isn’t the typical old Tory from central casting. His thinking and his policy are more subtle than that and more complex. What disorients and enrages Labour is his capacity to sell it as a simple story.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty
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How the row over Jackie Walker triggered a full-blown war in Momentum

Jon Lansman, the organisation's founder, is coming under attack. 

The battle for control within Momentum, which has been brewing for some time, has begun in earnest.

In a sign of the growing unrest within the organisation – established as the continuation of Jeremy Corbyn’s first successful leadership bid, and instrumental in delivering in his re-election -  a critical pamphlet by the Alliance for Workers’ Liberty (AWL), a Trotskyite grouping, has made its way into the pages of the Times, with the “unelected” chiefs of Momentum slated for turning the organisation into a “bland blur”.

The issue of contention: between those who see Momentum as an organisation to engage new members of the Labour party, who have been motivated by Jeremy Corbyn but are not yet Corbynites.

One trade unionist from that tendency described what they see the problem as like this: “you have people who have joined to vote for Jeremy, they’re going to meetings, but they’re voting for the Progress candidates in selections, they’re voting for Eddie Izzard [who stood as an independent but Corbynsceptic candidate] in the NEC”.  

On the other are those who see a fightback by Labour’s right and centre as inevitable, and who are trying to actively create a party within a party for what they see as an inevitable purge. One activist of that opinion wryly described Momentum as “Noah’s Ark”.

For both sides, Momentum, now financially stable thanks to its membership, which now stands at over 20,000, is a great prize. And in the firing line for those who want to turn Momentum into a parallel line is Jon Lansman, the organisation’s founder.

Lansman, who came into politics as an aide to Tony Benn, is a figure of suspicion on parts of the broad left due to his decades-long commitment to the Labour party. His major opposition within Momentum and on its ruling executive comes from the AWL.

The removal of Jackie Walker as a vice-chair of Momentum after she said that Holocaust Memorial Day belittled victims of other genocides has boosted the AWL, although the AWL's Jill Mountford, who sits on Momentum's ruling executive, voted to remove Walker as vice-chair. (Walker remains on the NEC, as she has been elected by members). But despite that, the AWL, who have been critical of the process whereby Walker lost her post, have felt the benefit across the country.

Why? Because that battle has triggered a series of serious splits, not only in Momentum’s executive but its grassroots. A raft of local groups have thrown out the local leadership, mostly veterans of Corbyn’s campaign for the leadership, for what the friend of one defeated representative described as “people who believe the Canary [a pro-Corbyn politics website that is regularly accused of indulging and promoting conspiracy theories]”.

In a further series of reverses for the Lansmanite caucus, the North West, a Momentum stronghold since the organisation was founded just under a year ago, is slipping away from old allies of Lansman and towards the “new” left. As one insider put it, the transition is from longstanding members towards people who had been kicked out in the late 1980s and early 1990s by Neil Kinnock. The constituency party of Wallasey in particular is giving senior figures in Momentum headaches just as it is their opponents on the right of the party, with one lamenting that they have “lost control” of the group.

It now means that planned changes to Momentum’s structure, which the leadership had hoped to be rubberstamped by members, now face a fraught path to passage.

Adding to the organisation’s difficulties is the expected capture of James Schneider by the leader’s office. Schneider, who appears widely on television and radio as the public face of Momentum and is well-liked by journalists, has an offer on the table to join Jeremy Corbyn’s team at Westminster as a junior to Seumas Milne.

The move, while a coup for Corbyn, is one that Momentum – and some of Corbyn’s allies in the trade union movement – are keen to resist. Taking a job in the leader’s office would reduce still further the numbers of TV-friendly loyalists who can go on the airwaves and defend the leadership. There is frustration among the leader’s office that as well as Diane Abbott and John McDonnell, who are both considered to be both polished media performers and loyalists, TV bookers turn to Ken Livingstone, who is retired and unreliable, and Paul Mason, about whom opinions are divided within Momentum. Some regard Mason as a box office performer who needs a bigger role, others as a liability.

But all are agreed that Schneider’s expected departure will weaken the media presence of Corbyn loyalists and also damage Momentum. Schneider has spent much of his time not wrangling journalists but mediating in local branches and is regarded as instrumental in the places “where Momentum is working well” in the words of one trade unionist. (Cornwall is regarded as a particular example of what the organisation should be aiming towards)

It comes at a time when Momentum’s leadership is keen to focus both on its external campaigns but the struggle for control in the Labour party. Although Corbyn has never been stronger within the party, no Corbynite candidate has yet prevailed in a by-election, with the lack of available candidates at a council level regarded as part of the problem. Councilors face mandatory reselection as a matter of course, and the hope is that a bumper crop of pro-Corbyn local politicians will go on to form the bulk of the talent pool for vacant seats in future by-elections and in marginal seats at the general election.

But at present, a draining internal battle is sapping Momentum of much of its vitality. But Lansman retains two trump cards. The first is that as well as being the founder of the organisation, he is its de facto owner: the data from Jeremy Corbyn’s leadership campaigns, without which much of the organisation could not properly run, is owned by a limited company of which he is sole director. But “rolling it up and starting again” is very much the nuclear option, that would further delay the left’s hopes of consolidating its power base in the party.

The second trump card, however, is the tribalism of many of the key players at a local level, who will resist infiltration by groups to Labour’s left just as fiercely as many on the right. As one veteran of both Corbyn’s campaigns reflected: “If those who have spent 20 years attacking our party think they have waiting allies in the left of Labour, they are woefully mistaken”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.