Magazine article The Spectator

James Forsyth: The Spending Cuts Osborne Flatly Refused to Make

Magazine article The Spectator

James Forsyth: The Spending Cuts Osborne Flatly Refused to Make

Article excerpt

The Autumn Statement on 25 November had long been circled in Downing Street diaries as the season's defining political moment. Its importance only grew after the Lords rejected the government's tax-credit changes and George Osborne announced that he would present his revised proposals in this statement. But now it is not even seen as the defining political moment of this week, pushed down the news agenda by the terrorist threat in Europe and David Cameron's decision to make the case to the Commons for Britain extending its anti-Islamic State bombing into Syria.

The extent of the security threat to Europe is becoming all too apparent. Not only have we seen more than 100 people gunned down in the French capital, we have seen another European capital essentially shut down by terrorists for several days. For obvious reasons, the question of how to deal with this threat is now what dominates politics.

The Tories have tried to make 'security' their watchword since before the general election. But the focus has now shifted from economic security to national security. This shift was under way even before Paris.

Jeremy Corbyn's election as Labour leader, with his hard-leftist views on foreign policy and dovish position on terrorism, created a particular political opportunity. While his left-wing populism on the economy has some appeal, the electoral market for abolishing the army and calling Osama bin Laden's death a tragedy is almost non-existent. Last month, one of the most political people in Downing Street summed up the Tory approach to Corbyn and Labour thus: 'National security, that's how we'll disqualify them. We don't even need to get to the economics.'

Corbyn's problems with his own MPs have got so much worse because events have propelled national security to the top of the political agenda. Labour MPs know that his positions on these issues are electorally disastrous. In the Oldham by-election, Ukip aren't savaging Labour for Corbyn's views on the economy but for his argument that Mohammed Emwazi ('Jihadi John') shouldn't have been taken out by a drone strike. This is proving so effective that Labour will now be relieved just to hold on to a seat that it won with a majority of more than 14,000 in May.

Yet the economy is still the key to the Tory effort to create a new coalition of voters that can keep them in power for a decade or more, and to Osborne's own political prospects. That is why this Autumn Statement was still so important, politically.

At their autumn conference, the Tories tried to present themselves as the new workers' party. Cameron talked about his commitment to social reform, to equality of opportunity, and promised an 'all-out assault on poverty'. Yet the Tories have to achieve these things while cutting back the state.

Osborne's decision to junk entirely the tax credit changes announced in the summer Budget shows just how hard it can be to combine these two objective. But those close to Osborne argue that this is possible, that even after this spending review the government is still spending several trillion pounds. They point out that even with the cuts announced on Wednesday, Osborne could still put another£7 billion into housing. The decision to spend more on house-building and the willingness to look again at planning rules is a reminder of how much this issue exercises Osborne. …

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