X

Create an account to continue reading.

Registered readers have access to our blogs and a limited number of magazine articles
For unlimited access to The Spectator, subscribe below

Registered readers have access to our blogs and a limited number of magazine articles

Sign in to continue

Already have an account?

What's my subscriber number?

Subscribe now from £1 a week

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
 
View subscription offers

Already a subscriber?

or

Subscribe now for unlimited access

ALL FROM JUST £1 A WEEK

View subscription offers

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Login

Don't have an account? Sign up
X

Subscription expired

Your subscription has expired. Please go to My Account to renew it or view subscription offers.

X

Forgot Password

Please check your email

If the email address you entered is associated with a web account on our system, you will receive an email from us with instructions for resetting your password.

If you don't receive this email, please check your junk mail folder.

X

It's time to subscribe.

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access – from just £1 a week

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
X

Sign up

What's my subscriber number? Already have an account?

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Your subscriber number is the 8 digit number printed above your name on the address sheet sent with your magazine each week.

Entering your subscriber number will enable full access to all magazine articles on the site.

If you cannot find your subscriber number then please contact us on customerhelp@subscriptions.co.uk or call 0330 333 0050.

You can create an account in the meantime and link your subscription at a later time. Simply visit the My Account page, enter your subscriber number in the relevant field and click 'submit changes'.

Please note: Previously subscribers used a 'WebID' to log into the website. Your subscriber number is not the same as the WebID. Please ensure you use the subscriber number when you link your subscription.

Coffee House

The road to recovery

23 June 2010

1:20 PM

23 June 2010

1:20 PM

This is a slow-burning budget. Not because Osborne has concealed, like Gordon Brown did, but because the reverse is true. The budget is, as Osborne says, a third of the size but with three times
the amount of information. It has layers: some policies and language are there just to assuage the LibDems. Some are pure Tory. James has a brilliant cover piece in tomorrow’s magazine which
spells out the political, rather than economic, forces at work in this budget. Osborne, that great player of three-dimensional chess, sees in this budget plans to restore a Tory majority
government. The Red Book itself is, for wonks like myself, a joy to read: straight figures, with nothing concealed. The IFS can take credit for this: Osborne’s greater transparency comes
because he knows that it’s futile to hide anything. Robert Chote or Gemma Tetlow will sniff it out. But for now, the following questions are mulling in my mind…

1)   This budget marks the end, not the beginning, of ideologically-driven fiscal policy.  The Spectator says in its leader tomorrow that the last decade –
where state spending increased more than any other country in any other postwar decade – was the era of ideology. The last decade tested to destruction the notion that society would somehow
become fairer and more prosperous if the state massively expanded. This Osborne budget is a return to rationalism. More about this in the mag tomorrow.

2)   It’s easy to pencil in welfare savings, as Osborne has done, but IDS’ welfare reform is more likely to cost money than save it. As Wisconsin shows, this
is about saving lives more than money: IDS bills the DWP as the no1 poverty fighting department. In my view, the billions “spent on child poverty” (ie, manipulating a spreadsheet that
purports to show child poverty) should be spent on the DWP so it can combat real poverty and through work, not handouts.

3)   Osborne will come to regret his NHS pledge. This is what has magnified a 5% cut in budgets into a 25% cut on affected areas. If “we’re all in this
together” why is the vast NHS bureaucracy not affected? This is when the real political pain will come. How can we cut the military at a time of war whilst vastly expanding overseas aid?
Osborne’s cuts are no more, or less, than was expected. He could have gone further, but the LibDems wanted their tax credit payouts and raising the tax threshold.

[Alt-Text]


4)   This is not a “figleaf” concession to the LibDems – it’s a genuine coalition budget. A pure Tory one would have looked different. Obviously
I’d have preferred a pure Tory one, but Osborne was genuine and generous in the concessions made to Clegg – who deserved the ovation he receved when meeting LibDem MPs last night.

5)   What is Polly Toynbee complaining about? She called the other day for an Office for Fairness, to guarantee the distributional impacts of the cuts. Osborne devoted a
page to it in his budget. Now, I loathe this agenda – instead of fighting poverty, it seeks to manipulate spreadsheets. It continues the failed Labour policy which considers welfare, not
work, the best way of fighting poverty. It blinkered policymakers, and saw an insane system where almost all of the new jobs created were filled by immigrants. It broke the link between economic
expansion and the dole queue. But Chart A4 on p68 of the budget (below) is the graph of Toybee’s dreams. It attributes to these blunt tax and spend measures an impossible degree of accuracy.
It takes us back to the vices of the Brown era, where welfare policy was intended to manipulate such a graph – not fight poverty. The agenda, alas, continues – and Polly should see this
as a substantial triumph.


 

6)   Osborne’s cuts are not 80/20 like he claimed. After all that fuss, there’s bugger all difference between the two parties over this. The below graph from
Citibank shows that the fiscal tightening Osborne inherited were, on average, 63% cuts  and 47% spending. Add his new fiscal tightening at the ratio nudges up to 65/35. It’s only 80/20
if you look at the new cuts, in the last year.

 

Pete will be at the IFS briefing, so I’ll leave the rest of the fiscal analysis to the pros. A new fiscal strategy was born yesterday, with many layers and objectives. It is, I think, the
launchpad of a counter-revolution – of reversing the ideologically-driven power grab of the last ten years. Osborne’s budget is a complex document, whose direction will become more
clear as he elaborates on its different parts. But it is lacking in neither boldness or direction. We are, at last, on the road to recovery.

Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.


Show comments
Close