The Guardian view on George Osborne: a reputation cracks
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Version 0 of 1. David Cameron was meant to be talking to the Commons about the refugee crisis on Monday, and he was positively keen to discuss the taxation of tampons. The one thing he did not wish to dwell on for any longer than he had to was the subject on everybody’s mind: the unravelling of last week’s budget, and possibly George Osborne’s chancellorship too. He snapped angrily when Jeremy Corbyn rather ineffectually brought it up, and while he paid tribute to Iain Duncan Smith’s record by reading a polite script, the tone betrayed a man mouthing warm words through gritted teeth. It is natural that the prime minister should feel so defensive about the sudden slump in the chancellor’s stock since Mr Duncan Smith walked out of the cabinet over the budget. For the Downing Street neighbours are that rare thing in politics: genuinely close, not only as colleagues but also as friends. Since the two emerged as the rising stars of the parliamentary party under Michael Howard’s leadership, Mr Osborne has served as a sort of chief executive to the Cameronian modernisation, converting the one-nation rhetoric of the senior man into strategy and hard decisions. So make no mistake, the chancellor’s sudden difficulties are personal for the prime minister – they are his problems too. For those looking at Mr Osborne from the left, the puzzle might seem to be why his bluff is only now being called. The list of charges that Mr Duncan Smith has put – with stinging effectiveness, even if arguably for his own reasons – are charges that the chancellor’s critics have made for years. A “loss of balance” between the generations? Messrs Cameron and Osborne first pledged to protect winter fuel payments and other pensioner perks way back in 2010, and they held firm to it, and renewed it, even after the coalition savaged family tax credits; at the same time broader economic policies, such as quantitative easing, worked to push up property prices, advantaging those who had bought their homes long ago against the cohort who were being priced out. The “arbitrary” nature of the fiscal targets which the former welfare secretary condemned as necessitating arbitrary benefit cuts is another long-standing gripe. As indeed is the reality that much of the pressure to cut payments for the needy comes not from economic necessity but instead from the political choice to cut certain taxes in a manner that advantages people further up the income scale. During the coalition years, all the claimed savings from social security cuts went back out the door in three Osborne pet projects – corporation tax cuts, frozen fuel duty and personal allowance increases. To govern is to choose, and with these sort of choices being made, progressive opinion long since gave up on taking the Cameron administration’s claim to a one nation approach especially seriously, but in the early years of the coalition it was not entirely hollow, and it didn’t look that way to Middle England – as last year’s general election confirmed. Whether it was down to self-restraint or the moderating pressure of the Liberal Democrats, Mr Osborne initially felt the need to give at least a little substance to the “all in it together” claim. In his first round of cuts he increased child tax credit to protect poor families from the wider retrenchment, and also made a few high-profile raids on the better-off, for example, withdrawing their child benefit. The beneficiaries of frozen fuel tax and higher allowances may not have been as poor as benefit claimants, but nor were they rich. Mr Osborne also took care to place a politically effective, if divisive, stress on the distinction between the deserving and the undeserving poor, those with blinds that would – as he put it – stay drawn in the morning. But over time – and especially since the Tories came back with their unexpected majority – any substantive concern with sharing the pain disappeared, and we were left only with spin. The ludicrous summer budget, which snatched huge amounts of tax credits away under the cover of an eye-catching but less financially significant minimum wage rise, was the most grotesque example. Until, that is, the chancellor last week asked for sacrifices from plainly deserving disabled people, many of them in work, while earmarking most of the proceeds for capital gains tax reductions, which favour executives who can swap income for share options. Last summer, with those pesky Lib Dems out of the way, Mr Osborne told MPs that his officials would no longer be producing the standard analysis of how rich and poor had fared in future budgets. It was as if he had ceased to care, an impression reaffirmed by hubristic budget day jokes about rewarding the West Country for voting blue, and abolishing the Liberal Democrats. If nothing else, Mr Osborne has excelled in deploying the argument from necessity. But today, neither middle of the road voters nor mainstream economists are inclined to regard a smaller deficit as the defining problem of our time. Worse, he has been fingered by Mr Duncan Smith for taking the money he had hoped to snatch from the poor, and giving it to the rich. Mr Osborne may reflect with some pride on having survived at the top of the political game for as long as he has, with his claim that there is no alternative. But as he embarks on his second screeching U-turn in a few months, if he is to survive, he is going to have to find an alternative line of argument. |