George Osborne normally shines at Tory conferences. A historian by training, Osborne knows the power of narrative and he had a clear one for the activists today: the recovery started when he took office and its progress has been extraordinary. Many of his claims were well-founded, some less so. Here’s my selection.
Let’s start with his statement that ‘Britain is the fastest-growing most job-creating most deficit-reducing country on earth. Britain we did this together.’
1. Job-creating? Yes, that’s his greatest single boast: the below chart shows the job creation record versus the forecasts
2. Fastest-growing? Well yes, this year. But taking previous years’ performance into account, the record is not quite so glistening.
3. Deficit-reducing? The Chancellor had to abandon his own timetable for that some time ago.
4. It’s a ‘dangerous fallacy’ that the recovery is not helping those at the bottom, he says. This may be exaggerated, but it’s no fallacy – here’s the graph for earnings. Not much of a recovery.
5. Job quality. Osborne is also right to say that the employment rise is not entirely low-quality jobs. Here’s the breakdown.
6. ‘We can’t afford to spend £100 billion in welfare payments to people of working-age and we have such debts. Benefits have risen more than earnings since Labour’s great recession… It’s not fair. Working-age benefits in Britain will have to be frozen for two years.’ Now, as Chancellor he increased welfare by way more than earnings – so really, he is angry at himself. Once he jacked up benefits by 5 per cent, because that was the freakishly high rate of RPI at the time. He blamed the Lib Dems, but the decision was his. At the time, he had rather foolishly committed to show that every Budget of his would help the lowest 10pc most, and the top least etc. Pursuit of this crude measure of fairness (the so-called ‘decile graph’) actually strengthened the poverty trap, reducing the incentive for people to move from welfare to work. Osborne is right to be annoyed at this mistake, and he’s right to commit himself to correct it – and use the saved cash for tax cuts. But why only working-age? I fear the answer is that pensioners are more likely to vote. Expect to read more about this. If we’re all in this together, why the continued largesse with winter fuel payments?
7. Benefits cap down to £23,000 Introducing this cap is one of the toughest things the government has done, and also the most popular. Polls show even a majority of Labour voters like it. Every since this fact was established, the reduction of that cap was inevitable. It’ll go down further.
8. The most competitive business taxes of any country in the world. Again, true – and commendable. The UK has the lowest corporation tax rate in the G7, and we’re on course to have the lowest rate in the G20 by 2015. Here’s the graph: