New Times,
New Thinking.

  1. Politics
8 March 2018updated 09 Jun 2021 10:28am

Conservative splits on austerity are a political gift for Labour

Tories are identifying the problems with austerity but their party is not providing the solutions. 

By George Eaton

For nearly a decade the Conservatives have cited the UK’s budget deficit as justification for austerity. But the recent improvement in the public finances (Britain has eliminated its current deficit) has led some to declare victory. “We got there in the end – a remarkable national effort. Thank you,” tweeted austerity’s author, George Osborne. 

This outcome, as Stephen noted last week, has been achieved at no small cost. Homelessness has risen by 169 per cent, the NHS is buckling under the strain of rising demand and child poverty has reached its highest level since 2010.

Over the same period, Britain has voted to leave the EU (in part due to discontent with austerity) and, to Tory dismay, a left-wing Labour Party has eliminated its parliamentary majority. If Osborne believes this is success, what would failure look like?

But the achievement of a current budget surplus (following a deficit of £100bn in 2010) remains a significant landmark (no government has run a current surplus since 2001/02). The Conservatives, however, are divided on how to respond.

For some, this is the moment to finally end austerity. Tory MPs, such as Nick Boles, Heidi Allen, Johnny Mercer and Sarah Wollaston, recognise that public spending cuts contributed to their election failure. Some believe, as Theresa May’s former aide Nick Timothy argues in his Telegraph column today, that the government should abandon the target of an overall budget surplus in order to invest in infrastructure and raise spending on the NHS (an electoral priority) and defence (a Tory priority).

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.

“The government has achieved its surplus,” Timothy writes. “It can invest in the economy for the long term. It can start to increase spending on public services. It can show that the Conservatives are more than just cutters: they have a broader and more ambitious economic mission and a deep sense of social justice. Mr Hammond must declare an end to the Age of Austerity.”

Yet others, including, crucially, Philip Hammond, believe this is no time “to go soft”. They warn that the UK’s national debt remains dangerously high at £1.7trn or 84.1 per cent of GDP, and point to the pressures that Brexit, mediocre growth and an ageing population impose. 

Theresa May has long been sceptical of Hammond’s fiscal conservatism but missed her chance to move the Chancellor when she blew her majority in a needless election (Hammond has since been strengthened by the non-implosion of his Budget).

For Labour, this divide is a political blessing. An increasing number of Tories articulate the problems with austerity but their party is unable to provide the solutions. By contrast, through divided in other areas, Labour is united in its desire to end spending cuts.

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. Should they prove incapable of change, the voters may well conclude that they are unworthy of power. 

Content from our partners
The power of place in tackling climate change
Tackling the UK's biggest health challenges
"Heat or eat": how to help millions in fuel poverty – with British Gas Energy Trust