Tory opponents of George Osborne need to get real

Written by Steve Richards is chief political commentator for The Independent. on 23 March 2016 in Diary
Diary
The resignation of Iain Duncan Smith has seen the Conservative party struggling to have a mature discussion about necessary levels of public spending.

The clash between Iain Duncan Smith and George Osborne has generated tumultuous waves but obscures a fundamental question: What do the duo and Conservative MPs on either side of the clash consider to be a sensible level of public spending, one that provides high quality public services in a way that the UK can afford?

In theory they all agree with Osborne’s overall objective. He seeks a surplus by 2020 and bears down on spending accordingly. But here is the complicated twist. Duncan Smith supports the target too. So do most Conservative MPs and the right wing newspapers currently tormenting Osborne. As a further twist a lot a lot of Conservative MPs and newspapers contemplating joyfully the fragility of the Chancellor often criticise Osborne for not cutting spending more quickly. This is not a straightforward battle between the cutter Osborne and the spenders on the other side of the argument about disability benefits. They all seek cuts.

Duncan Smith resigned sincerely because Osborne sought never ending cuts to his budget. But where Duncan Smith has been disingenuous and evasive is in relation to the areas where he would cut in order to ‘balance the books’ speedily, the objective he shares with the Chancellor.

With good cause Duncan Smith is a critic of the ring fencing of benefits for wealthy pensioners. But if Osborne had announced in last week’s budget that he was breaking the election pledge for pensioners there would have been more of a furore than the one that did erupt. Most Conservative MPs, with elderly constituents who are assiduous voters, support David Cameron’s pledges to protect pensioner benefits and some would have defeated attempts to remove them. In the short term at least the option is not available to this Chancellor or any Chancellor in this parliament.

On public spending in general Cameron, Osborne, Duncan Smith and the Conservative parliamentary party are at one. They believe it must fall and if anything fall at a faster rate than Osborne has ‘achieved’ so far. But when specific cuts are proposed Osborne’s critics are understandably alarmed and oppose them vehemently.

To give a precise example, before last week’s budget some Tory MPs told me that Osborne had been relatively profligate. When I asked them where he should have been tougher they cite ‘welfare’. Yet some of those very same MPs oppose Osborne’s cuts to tax credits on the working poor and the reductions in disability benefit.

This is why the crisis extends beyond Osborne and his inept budgets. Conservative ministers, MPs and most newspapers support public spending cuts in general, but oppose nearly all attempts to cut public spending. Imagine the reaction of Conservative MPs if Osborne had left welfare untouched in his two most recent budgets and targeted health, a source of big spending. Rightly they would have been up in arms.

The reality is that Osborne will have to find more for the NHS than he has already pledged. That demand for additional cash will not come only from within the NHS. It will come from Tory MPs in marginal seats as their constituents complain that they cannot secure GP or hospital appointments. The head of NHS England, Simon Stevens, not known for reckless profligacy, told Osborne before the election that the NHS needed an additional £16 billion and got a pre-election commitment for only £8 billion. That is a big gap that Osborne must fill.

What about the police? Speak to anyone who has worked with Theresa May and they will tell you the big savings have been made and there is scope for no more. What about defence? Tory MPs were alarmed when defence spending appeared to dip below 2 per cent of gdp and were delighted when Cameron and Osborne pledged to keep the expenditure above that arbitrary percentage. Most of them look forward to voting for the renewal of trident, a costly commitment. What about transport? Listen to Conservative MPs in the south west of England pleading for more funding for decrepit rail services and roads, again with good cause.

Can the Conservative party have a mature discussion about what it considers to be necessary levels of public spending? Given that the crisis of recent days is related to spending levels and Osborne has had to revise his two most recent budgets in order to scrap planned cuts it is in the party’s interests-and the country’s – for such a debate to take place.

In order to be credible and coherent Osborne’s critics cannot merely oppose a specific cut but must also advocate a less ideological rush towards a smaller state. What they cannot continue to do is proclaim the virtues of spending cuts in theory and hit the roof when specific cuts are made and hit another roof if alternative cuts are considered.

On the size of the state and the level of public spending the Conservatives are so far all in this together. If they choose to stay in this together they have no right to attack a Chancellor for specific cuts while calling him vaguely to cut deeper. Instead the Chancellor’s opponents must put the case for civilised levels of public spending in general and a more flexible approach towards the deficit, a bigger argument that would legitimise their opposition to specific cuts. It would also be a perfectly respectable argument for some on the centre right to make.

I doubt such a debate will happen. Instead get ready for more omnishambles as Osborne or his successor rushes towards a surplus his entire party supports in theory but not when they are face with the destructive consequences.

 

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