‘Something has to give’ – will it be George Osborne?

http://www.theguardian.com/commentisfree/2015/nov/11/george-osborne-john-major-cuts-tax-credits-tory

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This morning’s report from the MPs on the Commons work and pensions committee is a no-confidence vote that George Osborne cannot afford to ignore. How he responds will be critical to a million families. But it will also make or break him, his government, and maybe his party too.

A politician as shrewd as the chancellor must recognise that when your own MPs – there are six Tories among the 11 members on the committee – tell you to go back to the drawing board and this time, get it right, then it’s time to listen.

Related: George Osborne sees fresh blow over planned tax credit cuts changes

Don’t be misled by the low-key prose. The MPs make the following points: phasing in the cuts to tax credits need not scupper the chances of balancing the books by the end of the parliament, or cutting welfare spending; the Treasury must stop being evasive about the impact of the cuts (£1,906 off a care worker’s pay, as one of many examples); and raiding the budget for the new universal credit is not a way out of trouble.

Gordon Brown, the man who introduced tax credits as a tool to lift working people out of poverty, blames the Tories for undermining them by reviving the myth of fecklessness to frame its narrative. I think that’s only part of the story.

Others think the chancellor is so rich himself that he simply cannot comprehend how devastating it would be to lose £2,000 from your annual salary. But given the MPs’ criticism of the Treasury’s obfuscation and evasiveness, maybe he really didn’t realise who it would hurt, or how badly, until he’d said he was going to do it, and other people started totting up the sums. After they were spelt out for him in the Lords last month, Osborne has had to reconsider the cuts. This is arithmetic that matters, but the politics of the decision he makes matter much more.

The past 24 hours in politics may come to look like an early skirmish in what turned into a total breakdown of the armistice negotiated when David Cameron became leader, the first Uhlan cavalry into Belgium. Cameron’s 2005 peace talks followed 13 years of Tory wars that began in 1992 with the Maastricht treaty and it is Europe again that is part of the trouble. Rebels old and alarmingly new (about a third of the current backbenchers are suspected of being closet outers) queued up to heap derision on Cameron’s list of demands to the EU: “Is that it?”

The sight of his old “bastards” lining up to attack someone other than him might have cheered John Major, except that – in the second indicator of the nature of the trouble ahead – he was on a mission of his own. Sounding as he might if, say, Gordon Brown had hacked into his brain, Major, the last Tory chancellor to become PM, condemned policies that failed to understand the “meaner shorter lives” that poverty imposes. “As the world becomes richer,” he went on, “inequality becomes less tolerable, and the case for reducing it more urgent.”

This morning’s warning, from the Labour-led but Tory controlled work and pensions committee, demanding a pause on tax credit cuts. “Something has to give,” the MPs say, “household incomes, work incentives or fiscal savings.”

A generation ago, a Conservative budget reshaped Britain and the party that led it. Sir Geoffrey Howe’s brutal 1981 measures accelerated the decline of manufacturing, condemned public services to 15 years of bleak austerity and created a politics in keeping with the “me” generation. George Osborne’s summer budget of 2015 and the spending review in a fortnight may prove to be as much of a watershed.

Related: Gordon Brown: My tax credits are a lifeline. Osborne is wrong to slash them

It could decide the fate of this government; it may also reshape the Conservative party. Is it a party of the outers, a diminished and inward looking island nation that once built an empire, a land fit for Sir William Cash to dream in? Or does Osborne try to mimic Howe’s imperturbability in his pursuit of a swaggering Britain-as-hedge fund, a country ruled by the swift buck?

Could John Major’s attempt to hold back the surge, and the intervention of six Tories on the work and pensions committee come to be seen as the first sign that there is such a thing as compassionate Conservatism? Maybe the Good Right is more than a website.