Surviving the Budget - George's Nine Lives

24 Mar 2016



After giving a speech that was welcomed by Conservative MPs in the House of Commons on Tuesday, George Osborne is certain to be breathing a large sigh of relief after one of the most turbulent weeks for the Cameron Government since its formation in the aftermath of the 2010 General Election.



In what was certainly a shock move, Iain Duncan-Smith resigned last Friday, hours after the controversial Personal Independence Payment reductions were scrapped amid mounting Conservative opposition. Things went from bad to worse in the weekend papers, as rumours were leaked to the Times that the inseparable duo of Cameron and Osborne was under fire - with Cameron blaming Osborne for the worst budget reaction since the “omnishambles” of 2012 (in which he managed to claim the dubious honour of being booed at the London Olympics). Combined with this was the abrasive interview given by IDS on the Andrew Marr show, in which he chastised the Chancellor for failing to ensure that the country is “all in this together” and that anyone who did not vote Conservative would not be sacrificed first in order to reduce the deficit. This was perfect ammunition for Labour, particularly as Osborne had combined poor figures on the outlook for the economy with disability benefit cuts and tax cuts for the better-off. According to the Institute for Fiscal Studies, changes announced in the budget will benefit richer households at the expense of poorer ones.



However, the storm clouds now appear to be dissipating, and the damage to Osborne’s career looks to be nowhere near as bad as was initially thought. After fears of  “civil war” within the Conservative party (already badly strained by the EU referendum), the possibility of outright bloodshed appears to be far more marginal now - Conservative MPs jeered and heckled Labour as they attacked the Chancellor’s statement to the House on Tuesday. However, it is certain that his reputation has suffered somewhat amongst Tory backbenchers, and his leadership aspirations are badly damaged by this fracas.



This is not the first crisis over “fairness” that Osborne has faced since becoming Chancellor. He has consistently struggled to present as polished, refined and balanced an image as his friend the Prime Minister. He is seen as the crueller, nastier bogeyman compared to Cameron’s calm, moderate, sensible persona. And this is reflected in opinion poll ratings - he has consistently struggled in hypothetical match-ups against both Labour leaders and other Conservative hopefuls. In a Tory  leadership election he would trail Boris Johnson by around 20 points



However, Osborne has been helped by the quick damage control efforts of party heavyweights such as William Hague and Ken Clarke, who have poured broadsides into IDS’s account of his motives for resigning. Arguably, he went to provide a potential shot in the arm for Brexit, and not out of a sense of compassion for the working class. Osborne may also have been saved by Jeremy Corbyn’s pathetic attempt to score a direct hit and expand the weeping sore left by the budget, leaving the leader of the opposition unable to press the advantage that Stephen Crabb (IDS’s replacement) handed Labour when he announced the U-turn on PIP cuts. This was compounded on Tuesday afternoon, when on the final day of the budget debate, Osborne managed to switch to the offensive, derogatory style that is the signature anti-Labour tone when being questioned by opposition MPs. He also managed to avoid directly apologising or explaining where the four billion pounds that PIP cuts would have raised will now come from. Nor did he address the fact that his latest budget still carries a fiscal “hole” of £55 billion.



In short, it has been a very bad week for the Chancellor. But it could have been far worse. As he has escaped another minefield relatively unscathed, he will surely recognise the need to begin to look beyond the figures in his work at the Treasury, considering their wider impact too. This will be essential if he is to take over from David Cameron when he stands down. If he continues to focus narrowly on numbers and statistics, then he will coast behind other heavy hitters in the party’s senior ranks such as Boris Johnson, who can appeal to both the public and the party at once. Osborne must begin to change now, while he still has a chance to reach Tory MPs and retain the economic liberals among the party that support him and his ideals.


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