29 Oct 2015

Tax credits and Cameron and Osborne’s different horizons

Tax credit rebels amongst Tory MPs have been rather a hidden guerrilla force, much spoken of but little seen. Tonight 20 of them have broken into open ground.

David Cameron has made much of how the Commons has passed the tax credit changes and the Lords were defying the elected chamber when they voted against them on Monday.

Tonight 20 Tory MPs made a big show of rebellion over a Labour amendment which was never going to pass. You can see the list below. One rebel said he was particularly pleased to have a number bigger than the government’s Commons majority (12) in the same lobby as himself. He said 35 had approached him and declared themselves sympathisers.

Another longer-term rebel said there were 43 critics of George Osborne’s tax credit policy at the beginning soon after the Budget but they’d been worn down by relentless pressure (and pork barrel charm offensives).

They were jointly trying to breathe down the neck of the Chancellor as he tries to re-work his tax credit plan. There are just under 4 weeks before the Autumn Statement when George Osborne has said he will come up with a re-thought and diluted version of tax credit cuts. But the Office for Budget Responsibility will be wanting numbers to crunch for its assessment of the books which comes out simultaneously with the Autumn Statement around 10 days before that.

There’s no question that George Osborne and his team were looking at the same distributional analysis tables that all the outside experts have published since – they use similar models that could only produce the same numbers. There was clearly a sense amongst Team Osborne that the pain could be got through, might be forgotten by 2020 by which time growth might’ve filled the income gap.

But the key factor here is that “2020” date. George Osborne has his focus on the election year for obvious reasons. It’s not hard to imagine him wanting to go to the electorate as leader of his party with a promise of tax cuts to reward the years of austerity. By contrast, “2020” is circled in David Cameron’s diary with some up-market holidays and some well-paid speaking engagements.

Numbers 10 and 11 react badly to any talk of splits (and there’s nothing whatsoever to rival the Blair/Brown rupture of relations). But you can see how two allies working to different timescales might end up thinking differently about politics in this parliament: George Osborne wanting to get big pain out the way early, David Cameron perhaps more up for a gentler glide path, peppered with legacy projects, on the way to a sunlit retirement. Not as dramatic as the Blair/Brown split but maybe on tax credits we just caught sight of how different horizons can take you different places on policy.



Tweets by @garygibbonc4