Labour pays price of George Osborne’s failure to cut deficit

Inside Westminster

“This is not an election pitch,” George Osborne insisted on the morning after his government-wide Spending Review.

Although the Chancellor kept a straight face in a round of media interviews, he must have been smiling inwardly. If his review was not an election pitch, then I’m a banana.

This was the week in which Mr Osborne turned his failure to cut the deficit on the timetable he set out in 2010 to the Conservatives’ advantage. The Spending Review was all about setting the terms of trade for the 2015 election, and ensuring it is fought on the Tories’ home ground, not Labour’s. So the Chancellor tried to neutralise his party’s weak points by ring-fencing what the Blairites used to call “schools’n’hospitals”. The Tories’ failure to convince voters they would protect vital public services was probably the biggest reason why David Cameron did not win an overall majority in 2010, despite his pledge to “cut the deficit, not the NHS”. Ring-fencing the health and schools budgets will not be sustainable in the long run, as non-protected departments would take too much of the strain of the cuts that will still be needed after 2015.

But for Mr Osborne, that is a problem for another day; his priority is to win an overall majority. Labour have dubbed him “the part-time Chancellor” because of his role as Mr Cameron’s election campaign overlord. He was certainly doing both jobs  this week.

As he moved the pieces around the political chessboard in a way his old enemy Gordon Brown would have been proud of, Mr Osborne tried to expose Labour’s own “trust problem” – on cuts. He wasn’t entirely successful. Tory strategists had hoped publication of the review would put Labour under pressure to say whether it would stick to the Coalition’s spending plans for 2015-16 and spell out what it would cut. Labour saw that one coming and so three weeks ago, Ed Miliband and Ed Balls made important speeches, saying the Coalition’s budget for that financial year would be Labour’s “starting point” if it forms the next government. Their move won the desired headlines about Labour sticking to the Coalition’s spending limit, even though Labour left itself some wriggle room. What Mr Miliband and Mr Balls actually said was that Labour would not borrow more to fund day-to-day spending by government departments, which leaves the door ajar to spend more by raising taxes. And Labour would increase borrowing to “invest” in capital spending, notably a huge housebuilding programme.

Mr Balls had previously been cautious about spelling out specific cuts, much to the frustration of Blairites, who warned that it made Labour look like an anti-cuts protest party. One reason for the shadow Chancellor’s reticence was the old maxim that if an opposition comes up with good ideas, the government of the day will steal them.

He was proved right on Wednesday when Mr Osborne became a political magpie and announced several measures Labour had floated: merging parts of the health and social care budget; ensuring that people on jobseeker’s allowance have English language skills and sign on weekly; single parents having to prepare for work when their youngest child is three and greater integration of local emergency services. In a last-minute change, Mr Osborne axed winter fuel payments for pensioners in European countries warmer than Britain. Why? Because Labour had just pledged to withdraw them from better-off pensioners.

The separate announcement of £100bn of infrastructure projects by Danny Alexander, the Lib Dem Chief Treasury Secretary,  aimed to dilute the impact of Labour’s unique selling point in 2015 – a plan to “rebuild Britain”. A Labour insider groaned: “They are trying to shoot our fox.”

Mr Osborne looked more comfortable on his home turf than Labour. The continuing age of austerity means Labour will be playing away in 2015. Labour is instinctively happier talking about where to spend rather than where to cut but needs to change gear now, as Mr Miliband and Mr Balls acknowledge. Labour’s pitch will be to complete the unfinished business on the deficit in a more balanced way than the Tories. It won’t be an easy one.

There has not been the anger and civil disobedience we might have expected over the cuts. The public have bought into the Coalition’s deficit-reduction project, even if they have doubts about it being done fairly.

The Liberal Democrats have done the Tories a favour here. The cuts would have looked a lot more unfair if the Tories enjoyed an overall majority. More welfare cuts would have been announced this week: limiting child benefit payments to two children per family and curbing housing benefit for under-25s.

The Liberal Democrats insisted the £365m savings from the tougher rules for jobless claimants will be ploughed back into Jobcentres rather than pocketed by the Treasury. Ironically, it seems that Labour is paying the price of Mr Osborne’s failure to clear the deficit by the next election. If he had finished the job, Labour’s 2015 pitch would have been much easier. It’s not fair. But it’s politics.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Office Administrator

£20000 per annum: Recruitment Genius: Due to expansion, an experienced and hig...

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Plumbing & Heating / Bathroom Trade Counter Sales

£22000 - £26000 per annum: Recruitment Genius: This well established London ba...

SThree: Trainee Recruitment Consultant - Dublin (based in London)

£20000 - £25000 per annum + commission: SThree: Real Staffing's Pharmaceutical...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat