Mr Osborne fires the gun for the 2015 election

All the Chancellor’s initiatives contained an implied challenge to Ed Miliband


That the Chancellor was having to stand up in the Commons and present a new, cuts-heavy Spending Review was itself a defeat – as his shadow, Ed Balls, might have underlined more forcefully in his response. George Osborne’s original plan had been for the deficit to be eliminated by 2015, which would have considerably altered the tenor of what he had to say, even obviated the need for a 2015-16 review at all.

Despite the unsatisfactory backdrop, however, Mr Osborne seemed yesterday to have an extra little spring in his step and an extra note of assurance in his voice. As well he might. Not only can he now claim to see tentative signs of economic recovery, but he faced a front bench of Labour luminaries who have spent the past few months inching ever closer to an austerity agenda not so very different from his own.

There was, as always, some sleight of hand in Mr Osborne’s presentation of the figures, and a worrying sense not only that he rather enjoys wielding the knife, but that he regards cuts to public spending as good in themselves. A refinement yesterday was the distinction he drew consistently between current and capital expenditure. This was welcome in so far as it suggested an acceptance that investment in jobs, infrastructure and housing was beneficial. On the downside, though, this capital spending – whose use is to be spelt out in more detail today – seemed to be offered by way of compensation for swingeing reductions elsewhere.

There is no doubt that there was substantial fat to be trimmed from government when the Coalition took over, but there comes a point where cuts can be counterproductive (in actually reducing efficiency), or deceptive (in that spending tends to migrate elsewhere). Many council-tax payers, for instance, might dispute the idea that the cumulative slashing of the Local Government and Communities budget has left services unharmed.

It is also possible that specific moves designed to save money could actually rebound. A small case in point might be the threat to dock benefits from jobseekers who do not speak, or agree to learn, English. This might be a popular move, but satisfying the demand for English lessons is likely to cost money – and it is not those without a job who will be paying.

The Chancellor’s more chipper mood came across in other ways. One was a new readiness to challenge some very entrenched interests. His announcement that automatic salary increments are to be abolished for civil servants, and progressively for the public sector generally, is bound to encounter fierce hostility. Similarly his intention to amalgamate what he called “a significant chunk” of health and social care budgets so that people no longer “fall between the cracks”. Desirable – even essential – though such reform is, it will be resisted by hierarchies on either side. It might also be interpreted as eroding Mr Osborne’s own guarantee not to touch spending on the NHS. 

Neither of these measures can be seen in isolation, however. Which suggests another reason for the Chancellor’s good cheer. This Spending Review related to 2015-16 – in other words to the next electoral season and beyond. And each successive initiative contained an implied challenge to Ed Miliband. Would he retain Mr Osborne’s cash-cap on welfare spending? Would he reintroduce automatic salary increments for civil servants – and preserve them for the rest of the public sector? Would he, at a micro-level, drop the English lessons? 

These are some of the traps, big and small, that the acutely political Mr Osborne has set for Labour. At least Messrs Miliband and Balls now know some of what they will be up against. The campaign for 2015 starts here.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

SThree: Recruitment Resourcer

£20000 - £25000 per annum + Uncapped Commission: SThree: Do you want to get in...

Ashdown Group: Project Manager - Birmingham - up to £40,000 - 12 month FTC

£35000 - £40000 per annum: Ashdown Group: IT Project Manager - Birmingham - ...

SThree: Recruitment Consultant - IT

£25000 - £30000 per annum + Uncapped Commission: SThree: Sthree are looking fo...

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

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

Day In a Page

Read Next

Prevention is better than cure if we want to save the NHS

Tanni Grey Thompson
Question time: Russell Brand interviewing Ed Miliband on his YouTube show  

Russell Brand's Labour endorsement is a stunning piece of hypocrisy

Lee Williams
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before