George Osborne has a funny way of saying ‘happy new year’. In his speech in Birmingham this morning, the Chancellor will describe 2014 as the year of ‘hard truths’ about how much more spending needs to be cut in order to close the deficit. So why is the Chancellor kicking off what most commentators are billing as an extremely long general election campaign with a bleak message about more cuts to come? In 2010, the three main parties did everything they could do avoid talking about the detail of the challenge on public spending. Now the Chancellor wants to make it his main weapon against Labour, knowing that voters have been ahead of politicians on supporting deficit reduction, that Labour’s main poll weakness is the economy, and that this focus on tough choices and economic credibility will spook Labour into making more awkward contortions over formerly pet projects and policies in order to give the impression of fiscal responsible.
And yet in his choice of the working-age welfare budget as yet again the focus for the spending cuts – the Chancellor told the Today programme that ‘I think we do have to look at the welfare budget because I think it would be an odd choice as a country to say, “look we’ve got a high deficit and we’re going to deal with that by just cutting the schools budget or the science budget or something like that” and to leave untouched this enormous welfare budget’ – Osborne suggested that he isn’t prepared to talk about the really hard truths either.
He cannot talk about the pensioner benefits while the Prime Minister is ‘minded’ to make the same pledge about protecting them in 2015 as he did in 2010. These will, as the Chancellor argued, only save a small amount anyway, but as Osborne well knows, politics is about signals, and continuing to refuse to address universal pensioner benefits while hacking back at universality and eligibility for other benefits looks inconsistent. Incidentally, some of the cuts that he suggested in his interview have already been introduced by the Coalition: he said ‘there are people, for example, on incomes of £60,000 or £70,000 living in council homes – I’d look at that’. But the Communities and Local Government department already has – introducing a policy called ‘pay to stay’ whereby social landlords can raise their rents for higher-earning tenants.
But if Osborne is only interested in the big savings, as he told the radio this morning, then perhaps he could consider some of the ‘hard truths’ about other areas of spending. Conservative MPs have made repeated calls for their party to reconsider its commitment to ring-fencing the NHS budget, with Liam Fox reiterating that demand last week. But though public spending increases in the Labour years did not lead to massive improvements in service provision, there is still an omertà on senior politicians making these kinds of noises about the NHS budget. It is politically unpalatable. 2014, it seems, will be the year of only the ‘hard truths’ that Osborne doesn’t find it too hard to talk about.