6 Jan 2014

George Osborne speech: complacency, traps and bombshells

George Osborne said he wanted to warn about “a dangerous new complacency” that he’d sensed on the economy. Privately, he and others at the top of the Tory party think they may have contributed to this.

Pre News refresh player – this is the default player for the C4 news site – please do not delete. Ziad

When the chancellor himself talked last September of the economy “turning a corner” the “turning point” became the story rather than the caveats that surrounded it.

When Ed Miliband flashed an energy bill offer in front of the voters at his party conference later that month, George Osborne and others around him insisted they wouldn’t play on Labour’s pitch and muddle their own message by making similar retail offers to voters. But No 10 felt it couldn’t risk looking out of touch with voters’ cost of living concerns and rushed out a series of announcements intended to show they “got it” on the cost of living.

The man with the ‘plan’

Monday’s speech by the chancellor marks a return (for now at least) to the original strategy, emphasising that you can’t isolate “cost of living” issues and consider them separately from a big economic plan.

In his speech, George Osborne talked about having a “plan” 23 times. It was not a case of “job done” on the economy, he said, it was not even job “half done.” And to underline that and to wave to voters who like the Tories’ tough message on welfare, he proclaimed that the Treasury has projected “£12bn of further welfare cuts are needed in the first (full) two years of the next parliament” (ie for 2016-17 and 2017-18). Those Treasury projections actually lurked in the assumptions of the Autumn Statement as did the £25bn total savings over two years. At the time, the Institute for Fiscal Studies said the chancellor’s plans amounted to needing £37/38bn of austerity measures in the first three years of the next parliament.

The point of waving these numbers around today is to make some political points: 1. There’s still more work to be done and you can’t trust Labour to do it; and 2. George Osborne’s willing to take a scythe to welfare in a way Labour wouldn’t.

Lord Ashcroft’s latest poll suggests the Tories have a 27 per cent lead over Labour on welfare policies (a 21 per cent lead over Labour on “cutting the deficit and debts”). Today was about laying the groundwork for the “tax bombshell,” “black hole” and other political battle-cries that are being cranked up again.

Cuts for cuts’ sake

Nick Clegg responded with a press conference that made you wonder how he’d ever tolerated the Tories in government. They were “extreme,” “unfair,” “not serious” and “believed in cuts for cuts’ sake.” Up with £12bn welfare savings on working age benefits he would not put.

Nick Clegg said he’d like the balance of pain in the next parliament to fall about 75/25 between spending cuts and tax rises. Ed Balls, when I bumped into him, said that sounded like the Lib Dems had just tied themselves to several billion pounds worth of tax rises (and he suspected their mansion tax would struggle to get them £1.5bn of that). He was not willing to walk into any such trap himself, he said.

I asked Mr Balls to give some indicative cuts he’d consider to prove George Osborne wrong in his claim that Labour wouldn’t be tough enough. He repeatedly mentioned his commitment to taking the winter fuel payment off the richest pensioners. But that recoups a pretty miniscule fraction of the cuts in the Treasury plans.

Follow Gary Gibbon on Twitter.

Tweets by @garygibbonblog

7 reader comments

  1. Mike Wood says:

    Are the electorate going to to be interested in a “my cuts are fairer than your cuts” debate. Until it can be demonstrated that further austerity is going to lead at some point to rising (as opposed to falling) real incomes and falling unemployment – who could possibly be interested ? Cuts are a means not an end.

  2. Martin Williams says:

    Once again the poorest, the sickest, the unemployed have to pay for the failure of the government. The future is bleak for anyone under 25, for anyone on benefits. Pity the 2.5 Million plus in that situation wont vote against them or will they

  3. Harry Alffa says:

    You and the rest of the media are continuing to perpetuate the lie that “there’s no money left” and that “there is no option but to cut spending”.

    How about 5 or 6 percent growth in the economy?

    Link banker/bank taxes to unemployment level; that will see SMEs financed properly at honest rates; that gives growth to the economy; that means cash hoarding companies will invest; that gives more growth; recursive stuff; that mean lower unemployment; that means higher earning and more spending; that means more growth.
    See the website: bailoutswindle.com

    You have to be thick or corrupt not to admit the logic.
    Unless I’m the idiot – if so please give reasoning. Seriously, I’ll listen.
    I hope you can do this simple little quiz:
    If you can’t pass that, you are too thick to engage with – sorry.

  4. Derek Gibson says:

    George osborne and his torylibdem cronies have not got an idea of how terrible the effects on the poor, disabled and the middle income earners there policies are having, the rivh don’t have to worry about food, heating money.

  5. Keith Wright says:

    Alan Johnson MP has frequently stated that our debt Ratio to GDP has been comparatively low and this should be regarded as the critical factor rather than the level of debt per se. Any views on that please?

  6. Tom MacFarlane says:

    It begins to look as though Osborne wants a permanent state of austerity, a stead degradation of living standards.

    This is consistent with the argument put, among others, by Alexandre Afonso on openDemocracy, that the line of travel is to reduce living standards until they are “lower than the Shenzen coastal region within a period of five years”.

  7. Philip Edwards says:


    Every time Georgy Boy heaves into view the tories sail further round the bend.

    Anyone who wants to go with them is welcome to the trip. But I think I’ll give it a miss.

    Last week we had that dead faced loony Michael Gove in the Daily Heil telling us the First World War was a good thing. This week we have dead faced Georgy Boy and his public school mentality lying his head off about the economy as yet again he lined up our most vulnerable citizens to rob from. Meanwhile, his chums and banker allies walk away with billions we could be using for the benefit of the nation. The tories aren’t “the nasty party,” they’re The Evil Party – always have been, always will be.

    Great and good pastor Dietrich Boenhoffer once said, “I stopped arguing with the Nazis when they became too stupid to argue with.” The same thing applies to the tories and all the other neocons (New Labour, LibDems, UKIP etc.) in this Parliament of Scoundrels.

    Georgy Boy’s lies, hypocrisies and theft will get worse as long as people allow it to get worse.

Comments are closed.