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IDS resignation damages George Osborne's Tory leadership hopes IDS resignation damages George Osborne's Tory leadership hopes
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George Osborne has long coveted the prize of the Tory leadership. But Iain Duncan Smith’s sudden and dramatic resignation has crystalised nagging concerns about the chancellor within his own party. By uttering the heresy that George Osborne’s fiscal targets are “arbitrary”, forcing the government to make “unfair” cuts, Iain Duncan Smith risks pulling down the whole doctrine of austerity that has sustained the chancellor’s reputation.
The bookmakers William Hill said it had pushed Osborne’s odds of being the next prime minister from 2/1 favourite to 7/2 second favourite, and shortened Boris Johnson from 3/1 to a 15/8 clear favourite. An admiring biography of Osborne by the Financial Times journalist Janan Ganesh styled him the “austerity chancellor”; but Duncan Smith carefully set his view that the pursuit of the targets, ceilings and rules Osborne has erected have ultimately perverted the “one-nation Conservatism” that should protect the most vulnerable.
George Osborne has long-coveted the prize of the Tory leadership. But Duncan Smith’s sudden and dramatic resignation crystallised nagging concerns about the chancellor within his own party.
The bookmakers William Hill said on Saturday it had pushed Osborne’s odds of being the next prime minister from 2/1 favourite to 7/2 second favourite, and shortened Boris Johnson from 3/1 to a 15/8 clear favourite.
William Hill’s spokesman, Graham Sharpe, said: “So sure-footed for so long, Mr Osborne was widely regarded as Cameron’s natural and chosen successor, but recent blunders seem to have dealt him a serious blow to achieving that outcome.”William Hill’s spokesman, Graham Sharpe, said: “So sure-footed for so long, Mr Osborne was widely regarded as Cameron’s natural and chosen successor, but recent blunders seem to have dealt him a serious blow to achieving that outcome.”
It is a sentiment now increasingly widely shared in Westminster, where what one backbencher called an “Anyone but George” campaign is gathering force. It is a sentiment increasingly widely shared in Westminster, where what one backbencher said an “Anyone but George” campaign was gathering force.
Related: George Osborne uses budget to convince Tories of his leadership qualitiesRelated: George Osborne uses budget to convince Tories of his leadership qualities
The climbdown over disability benefits and the loss of Duncan Smith are the most damaging of a series of recent revolts, including a defeat over Sunday trading laws and the tampon tax rebellion, which forced the prime minister to discuss the issue with his EU counterparts. The climbdown over disability benefits and the loss of Duncan Smith is just the most damaging of a series of recent revolts, including a defeat in the House of Commons over Sunday trading laws and the “tampon tax” rebellion, which forced the prime minister to discuss the issue with his EU counterparts.
Some budget proposals, including a fuel-duty rise and a cut in tax relief on pensions contributions that would have hit higher earners, were ditched even before they went to the printers, as Downing Street sought to avoid any noise in the runup to June’s referendum. And last summer, in what was boldly styled Osborne’s first Conservative budget after the party unexpectedly won a majority in May’s general election, he introduced the deep cuts to tax credits that were subsequently overturned by the House of Lords, another embarrassing U-turn.
In order to secure the leadership, when the prime minister steps down at some point between now and 2020, Osborne would have to win over enough backbenchers to make it through to the final two candidates, who are then put to grassroots members for a vote. In his devastating interview with the BBC’s Andrew Marr on Sunday, Duncan Smith said he had also had qualms about these plans, which were introduced to meet the Conservatives’ bold pre-budget promise of cutting £12bn from the nation’s welfare bill.
This time, in a bid to avoid similar embarrassment, some budget proposals, including a fuel duty rise and a cut in tax relief on pensions contributions that would have hit higher earners, were ditched even before they went to the printers, as Downing Street sought to avoid any noise in the runup to June’s referendum.
In order to secure the leadership, when the prime minister steps down at some point before 2020, Osborne would have to win over enough backbenchers to make it through to the final two candidates, who are then put to grassroots members for a vote.
Osborne had already been eclipsed by Brexiteer Boris Johnson in the hearts of many individual members, who tend to be more Eurosceptic than the Tory party in parliament.Osborne had already been eclipsed by Brexiteer Boris Johnson in the hearts of many individual members, who tend to be more Eurosceptic than the Tory party in parliament.
But this latest reversal, which saw the budget unravelling within two days of being delivered – “We’re not wedded to these numbers,” said a Treasury source on Friday of the welfare cuts published in the budget red book – reminded backbenchers that his great strength as a political tactician can also be a weakness.But this latest reversal, which saw the budget unravelling within two days of being delivered – “We’re not wedded to these numbers,” said a Treasury source on Friday of the welfare cuts published in the budget red book – reminded backbenchers that his great strength as a political tactician can also be a weakness.
Osborne, and to some extent Cameron with his pre-election pledges to pensioners and other groups, has trapped himself and his party in a straitjacket of his own making.Osborne, and to some extent Cameron with his pre-election pledges to pensioners and other groups, has trapped himself and his party in a straitjacket of his own making.
His promise to deliver a surplus on the public finances by 2020 was far more about stymying a Labour party struggling with its own attitude to austerity than the national interest. And the welfare cap, similarly, was more a political stunt, aimed at isolating Labour as the friends of scroungers and skivers, than a well thought-out policy. His promise to deliver a surplus on the public finances by 2020 was far more about stymying a Labour party struggling with its own attitude to austerity than the national interest. And the welfare cap, similarly, was more a political stunt, aimed at isolating Labour as the friends of scroungers and skivers, than a well-thought-out policy.
Yet by tying himself and his party up in all these pledges, promises and targets, the chancellor ended up delivering a budget that – as Duncan Smith pointed out – couldn’t possibly be construed as fair in its own terms.Yet by tying himself and his party up in all these pledges, promises and targets, the chancellor ended up delivering a budget that – as Duncan Smith pointed out – couldn’t possibly be construed as fair in its own terms.
While the public may approve of the general idea of bringing down the welfare bill, they also understand that politics is about choices, and targeting the disabled while giving extra cash to wealthy shareholders fails the most basic tests of fairness.While the public may approve of the general idea of bringing down the welfare bill, they also understand that politics is about choices, and targeting the disabled while giving extra cash to wealthy shareholders fails the most basic tests of fairness.
Son of a baronetSon of a baronet
It also plays to the most damaging caricature of Osborne, as the privileged son of a baronet, keener on protecting his wealthy friends than helping ordinary Britons: something he has fought hard to shrug off by introducing his “national living wage”, for example.It also plays to the most damaging caricature of Osborne, as the privileged son of a baronet, keener on protecting his wealthy friends than helping ordinary Britons: something he has fought hard to shrug off by introducing his “national living wage”, for example.
Vince Cable, who served alongside Osborne as business secretary in the Liberal-Conservative coalition of 2010-2015, says the arrogance of the Treasury is one factor that helps to explain the chancellor’s current travails. Vince Cable, who served alongside Osborne as business secretary in the Liberal-Conservative coalition of 2010-15, says the arrogance of the Treasury is one factor that helps to explain the chancellor’s current travails.
Cable says that, time after time as Osborne imposed welfare cuts, Duncan Smith was “dragged kicking and screaming the whole way through: and you had these pubescent Treasury officials saying, a billion from this and a billion from that, without any sense at all of what it meant in human terms”. Cable says that, time after time as Osborne imposed welfare cuts, Duncan Smith was “dragged kicking and screaming the whole way through: and you had these pubescent Treasury officials saying a billion from this and a billion from that, without any sense at all of what it meant in human terms”.
That fits with IDS’s argument that the Treasury makes policy on the hoof, in response to media noise.
Others point out that, while the prime minister has been the public face of the campaign to keep Britain in the EU after June’s referendum, Osborne is heavily involved behind the scenes, distracting his focus from the budget.Others point out that, while the prime minister has been the public face of the campaign to keep Britain in the EU after June’s referendum, Osborne is heavily involved behind the scenes, distracting his focus from the budget.
That means all Osborne’s tactics have ultimately added up to very bad politics – a lesson that will not be lost on his own backbenchers as they wonder who could best carry them into the next general election.That means all Osborne’s tactics have ultimately added up to very bad politics – a lesson that will not be lost on his own backbenchers as they wonder who could best carry them into the next general election.
But IDS’s critique goes deeper than that; he believes Osborne’s approach has struck at the heart of just the kind of compassionate Conservatism Osborne and his close friend and political partner David Cameron once claimed to espouse.