Tory U-turns: a matter of relief, but with questions of responsibility and irresponsibility.

George Osborne, Chancellor of the Exchequer in Britain’s Tory government, produced a spending review on 25 November that does a complete U-turn on two heavily trailed and highly unpopular measures.

On his way to making those announcements, he repeated the claim he’s advanced frequently in the past, that any difficulties the economy is facing are the fault of the previous Labour government. As his opposite number, the Labour spokesman on Finance, John McDonnell, pointed out, there comes a time when you have to stop blaming your predecessors and take responsibility yourself. Osborne has, after all, been in office for five and a half years. Back in 2010, he set targets by which to judge him, in particular eliminating the structural deficit in government spending by 2015, which he spectacularly failed to hit.

At the 2015 election, he persuaded a large number of voters to give him another chance to hit his targets by 2020, though it again looks as though he won’t make it. Indeed, I believe one prediction we can make about 2020 with some confidence, is that the Tories’ woes will not have been vanquished, and they’ll still be blaming them on Labour. Osborne, it seems, is never responsible.

Part of his irresponsibility will be continued austerity policies. And that’s despite the two U-turns he has just announced.

The first U-turn concerned cutting tax credits, vitally necessary to a great many people for whom the Tories claim to speak – the striving working poor. The Opposition parties and others had mounted a major campaign against the cuts. It’s a measure of the opponents’ success that they were able to convince a great many voters of their case, and a further measure of that success that Osborne, wily politician with well-tuned antennae, simply abandoned his proposal.

Osborne: a wily politician but not so hot on responsibility

Secondly, he has dropped plans for further cuts to the police, a position made deeply unpopular by the Paris terror attacks.

Smart moves by a clever operator. And most welcome: I supported the opposition to both cuts, and it’s with sincere relief that I greet their abandonment. But there’s no reason to reduce the pressure on Osborne, all the same. For two reasons.

Firstly, it would be deeply foolish to think that he isn’t going to sneak them back in. That’s already happening with tax credits. That particular support is being phased out to be replaced by the new system of Universal Credit – which Osborne has already cut. So as people are moved over to the new arrangements, many will face cuts of £2000 a year and more – around 10% of their earned income – that we were complaining about before.

So the opposition has to continue. Otherwise all we’ll have bought is a little time.

And secondly, there’s the justification Osborne has used for his U-turns. The Office for Budget Responsibility has revised its forecasts of future government revenue. It is on the strength of those forecasts that the government felt it could afford to reverse its cuts. But the Guardian was absolutely right to quote the comment by the great American economist, J K Galbraith, on the subject:

The only function of economic forecasting is to make astrology look respectable.

George Osborne has taken a gamble on the economy turning out as the forecasters have suggested it might. Not on money in the bank, but on money he hopes to see flow in later.

Now I’m very much in favour of seeing growth stimulating increased government revenue, so that the constant cuts associated with austerity can end. But it strikes me that a government that is constantly quoting little common place phrases of everyday life as though they constituted analysis of an economic policy for a nation – “the country has maxed out its credit card”, “we inherited an economy on the brink of bankruptcy”, “we’re fixing the roof while the weather’s good” – would at least admit that it’s taken to spending today, money it has at best an uncertain chance of earning tomorrow.

It’s particularly striking in this context that the Office for Budget Responsibility doesn’t have a good track record in economic forecasting. Of course, it doesn’t have to take responsibility for any budgetary decision taken by the government.

But then, it seems George Osborne doesn’t feel the need to either. And he’s taking those decisions. With cheerful irresponsibility.

George Osborne: being buried by his own poll tax?

Tory proposals to cut tax credits, benefits to help the poorly paid survive, are “a mistake on a par with the poll tax,” according to Gordon Brown.

Brown, Labour Prime Minister until he was defeated in the 2010 General Election, tends to limit his public interventions. So it’s a measure of how important he feels the attack on tax credits is, that he’s spoken up now. And it’s telling that he compares this Tory policy to the poll tax: it was the measure that Thatcher brought in towards the end of her tenure of office, and which ultimately broke her. Unpopular in the country, it wrought consternation among her own members of parliament who saw it could cost them their seats, so they brought her down.

Gordon Brown:
elder statesman denouncing Osborne's onslaught on the poor

There are times when, as Brown suggests, it seems the tax credit cuts may do the same for George Osborne. He’s Chancellor of the Exchequer now, but has aspirations to succeed David Cameron as Prime Minister. An adverse vote by the House of Lords, which usually refrains from reversing decisions of the Commons on financial matters, forced Osborne back to the drawing board on his cuts. But now even Conservatives are questioning whether they’re acceptable, even if introduced more gradually and reduced in scope.

The Parliamentary Select Committee on Work and Pensions, despite its Tory majority, has called on Osborne to consider postponing the cuts for at least a year to consider other options, if he can’t mitigate the effects of the cuts adequately.

And a Tory MP, Stephen McPartland, boycotted a visit by a Treasury Minister and fellow Tory to his constituency this week, because the Minister refused to discuss the cuts. McPartland had calculated that a family on £20,000 a year, well below the median income for the country but well above the lowest, is likely to lose £2000 a year under the proposals. The government maintains that it’s committed to supporting strivers rather than skivers, but this would be a striving family that would suffer a major blow from Osborne’s policies.

When opposition begins to build within the Conservative Party itself, it seems that as well as a rod for backs of the poor, the Chancellor may well be building one for his own. The next election is still years away, and the Tories may weather this storm and suffer no lasting damage from it. But at least they are, for now, being put to the rack for policies which are inflicting real suffering and which they clearly hadn’t thought through.

That’s another parallel with the poll tax. It was a flat rate tax to support local government. Because it was the same for all, it disproportionately hurt the poor, as the tax credit cuts will. And Thatcher didn’t fully think it through: she had reached the point of believing so firmly in her political instincts that she insisted on pressing ahead with the measure, against the advice of most of her entourage. Until she paid the price.

We’ll see whether Osborne is able to show a little more flexibility. Or will pay the same price.

That will depend on whether he presses on with the tax credit changes. Ironically, most of us, including no doubt Gordon Brown, would be delighted to see the payments falling away to zero. Since they are earnings-related, they would wither away as people earned more. Brown would not doubt be keen to see wages rise in that way. Meanwhile, the Tories claim they want to see us becoming a high-wage, low-benefit economy. Indeed, that’s become a slightly monotonous refrain of theirs these days.

Well, raise the wages and the benefits will, automatically and inevitably, fall.

What’s interesting is that Osborne wants to cut the benefits by direct government action. In other words, he doesn’t himself believe in the “high wage” part of his mantra – if wages were rising as he claims to wish, he wouldn’t need to reduce the benefits himself. They would fall of their own accord.

All of which rather suggests he doesn’t believe his own words. In turn, that suggests that no one else should either. And, what’s more, if his proposals turn into his version of the poll tax, and come back to bury him – well, it could hardly happen to a more deserving fellow.

Something for nothing: a dangerous mentality. Especially in government

There’s often talk of the science of business. In reality, though, it’s all about instinct. This is particularly true among many senior executives who just know their gut feel is somehow enlightened and leads them to excellent judgements, hidden to others.

So rather than laws and principles, business tends to spew out aphorisms. “You never get a second chance to make a first impression.” “There’s no such thing as a free lunch.” And, particularly relevant here, “you never get anything for nothing.”

Just because they seem neither deep nor inspired doesn’t make these sayings untrue. In fact, they are often about as good a guide to what actually happens in business as anyone gets. One would, therefore, expect any reasonably experienced businessman to know them. One might even expect a political party pretty much in hock to business interests to be familiar with them too.

That makes it slightly ironic that our present government, here in Britain, spends so much time trying to convince us that you really can get something for nothing.

Generally, the people accused of trying to get something for nothing are the poor or disenfranchised. It’s people who are dependent on benefits, or who are asking for a little more to make ends meet. Business leaders or Tory Ministers are quick to condemn them. And yet that’s precisely the approach Tories are taking to some of the most important parts of our society.

It seems to be their philosophy towards the NHS, for instance. Their mantra is “get more for less.” You can actually do that, for a while, as you drive out inefficiencies. But we’ve been driving them out for a good twenty years or so. There comes a point where you’re not cutting out fat any more, you’re cutting into muscle or even bone.

But the government keeps going. It’s demanding that junior doctors do more work at weekends, so that we can move to a seven-day NHS. But it expects them to do that for no extra money.

Can you imagine one of the great consultancy companies, or financial advisers, or even lawyers agreeing to do extra hours for no more money? Surely the government, so close to such people, knows that they’d never wear it. What makes them think others would go along with it?

Another key element in the government’s healthcare strategy is to get more care delivered outside hospitals. In particular, by the social care sector. So it’s a concern that Britain’s biggest chain of care homes, Four Seasons Health Care, is apparently in serious financial difficulty, with only a few months of cash left ahead of it.

A home run by Four Seasons Health Care

A concern, but not a surprise. Social care is funded by local government, and central government has been starving municipalities of funds. Inevitably, that’s working through to the care providers, like Four Seasons. Again, it’s simply a matter of trying to get something for nothing: social care able to relieve the pressure on the NHS, for less money than it had in the past.

One of the factors that’s made life so hard for the care home sector is the government’s promise to move the minimum up to a level that will make it the “national living wage.” There is a thing called the “living wage”, calculated by independent bodies, and it’s substantially higher than the government’s “national” version. But even the lower level is hard for social care to absorb.

And yet the government has to see wages of the lowest paid rise, to justify why it’s cutting the support it gives them at the moment, through so-called tax credits. 

Follow the reasoning carefully: the Tories want to cut the benefits, justified by moves towards a living wage, even though their target for wage rises falls far short, and in any case they don’t intend to help out the care homes who are suffering, and on whom they depend to take cases from the NHS.

Sound like voodoo economics to you? That’s because it is voodoo economics. No one believes in it, not even the government. It’s all based on the idea that you can get something for nothing, which it knows it can’t.

So basically it’s just a smokescreen. It’s cutting back the state and leaving people dependent on it in even worse conditions than before. All the rest is just words to cover up the onslaught.

Meanwhile the Tories’ friends and paymasters are doing just fine, as top pay continues to rise astronomically.

Maybe there is such a thing as a free lunch after all…


And an update: The UK government has now made an 11% offer to junior doctors. I don’t want to be curmudgeonly, and I’m pleased the offer's been made, but I have to say that it’s an admission that the Tories had it wrong before. Besides, it would be good to see something done for other groups than doctors – such as workers on or little above the minimum wage.

Callous indifference and lack of compassion: they may just reflect a Prime Minister's inability to make an effort

The Devil, they say, makes work for idle hands.

With an idle mind, however, it’s far worse: the Devil makes its owner his tool.

Underneath the surface, and despite the crass indifference of the entitled, David Cameron may well be a not entirely unpleasant human being. He’d probably be most upset, say, by the sight of a woman starving with her children. He’d almost certainly want to help.

The problem is that he has no imagination. He can’t see that woman when she’s out of sight. He can’t connect the effect of his actions as UK Prime Minister with the damage they do to women such as that one. That’s not because he lacks the capacity for compassion, or even the intellectual ability to picture someone else’s suffering, it’s because he simply doesn’t make the effort to exercise them on a scale above the individual.

It was fascinating to read a piece by Fraser Nelson in the Daily Telegraph, in other words by one of the most outspokenly Conservative commentators in one of the most loyally Conservative of newspapers, which warned us that “it’s David Cameron’s laziness that should worry us.” 

Cameron: no effort is too small

Nelson points out, among other incidents from Cameron’s time in office, that when he lost the parliamentary vote on military intervention in Syria, “it was the first time in two centuries that a Prime Minister lost a vote on war and peace – through a basic failure to prepare.”

A failure to prepare. Yes. He simply can’t find it in himself to do the work that’s needed to understand what he’s doing and the effect it will have. Fraser Nelson claims that Cameron didn’t read the NHS Reform Bill, which led to one of the most disastrous reorganisations of the NHS we have seen – and there have been many others that have been dire – until the draft legislation was published.

Nelson’s account is wholly plausible. After all, recently Cameron ruled out any kind of tax on high-sugar foods and drinks to fight obesity. He then admitted that he hadn’t read the report which recommended such a tax. That didn’t stop him rejecting its recommendations.

Nelson also describes him as “utterly loyal to his inner circle” which is perhaps why he stood by the hapless Health Secretary, Andrew Lansley, who introduced the NHS measures. It took years before he was shifted away from Health, and even then it was a while before he was dropped from government entirely.

Returning to our fictional woman, Cameron presumably simply can’t imagine the suffering he’s causing by actions over the NHS which will deprive her, or her family, of the kind of care which her own mother’s generation had come to regard as a right.

Now, though, there’s worse news for her. She’s struggling to get by on a minimum wage job while bringing up her children alone – yes, I’m assuming she’s a lone mother – and Cameron’s government intends to reduce her benefits, in the form of cuts to tax credits. She is likely to lose £1000 a year or more, which is painful since she only earns £15,000.

The move to cut her benefits has suffered a setback, with the House of Lords voting for transitional arrangements to be put in place to lessen the impact on people like this woman. That was effective opposition from the non-Conservative parties. The leader of the biggest of them, Jeremy Corbyn of Labour, followed up that powerful move by demanding of Cameron that he guarantee to the House of Commons that there would now be no negative impact on tax credit recipients.

Corbyn dedicated the whole of his ration of six questions at Prime Minister’s Question Time to this theme. Six times he asked. And six times Cameron failed to answer.

At one point Corbyn claimed that “he must know the answer.”

Actually, Jeremy, I think you may be wrong. It does sound like standard politician’s deviousness, ducking and evading a question he’s uncomfortable with. But Cameron’s not a clever politician. It’s far more likely that, actually, he doesn’t know the answer.

To know it, he’d have to read some of the background briefing material. Which is quite boring. He simply can’t find it in himself to make the time for it.

And so, with his idle mind, he ends up doing the devil’s work.