By George, Osborne has done it again! Once again, the Chancellor has politically outmaneuvered his opponents, both in the hapless, little red booking Mao quoting Militant retirement home led Labour party, and in his own party. Today’s Daily Telegraph front page declares “The end of austerity” and from what I have seen of the Chancellor’s Autumn Statement policies, the Telegraph’s assessment is accurate. Osborne, the voracious reader and studier of past American political warlords like Lyndon Johnson and Richard Nixon, has silenced his rivals: Theresa May can’t complain about police cuts, Boris Johnson can’t complain about tax credit cuts being too deep and Jeremy Corbyn and John McDonnell- well they can still complain but there complaints will only resonate with the most hardened of leftists. And it couldn’t come at a better time for the Chancellor- he had recently fallen behind Boris and May among Tory voters in the race to become the next leader. Now that nervous marginal MPs won’t have to defend tax credit cuts, it looks like smooth political sailing for Osborne and the Conservative party (which was already up by 15 points on Labour) for the time being.
If I was a member of Parliament I would have just one question for the Chancellor: what do you believe? And to the that question he would probably say some CCHQ catchphrase like “I believe in a high wage, low tax and low welfare economy that back hard working people.” But does he really?
When the Chancellor would say the Tory catchphrases, up through the budget of this year, I would generally believe him. After all, since Osborne has been Chancellor, taxes have been generally cut, including the tax threshold, top income rate, inheritance tax and best of all he has created the lowest corporate tax rate in the G20. Furthermore, wage haves gone up recently, the economy is the fastest growing in the G7, and employment is at all time with welfare recipients way down. He’s also for the most part been serious in cutting department’s budgets (with the notable exception of international development) and privatising state assets. And when he announced the cut to tax credits, I was thrilled- finally Gordon Brown’s subsidising of low wages and working government dependence would end. Yes, the 2015 budget had its usual stupid gimmicks, but as I wrote in July, overall it was a budget that backed the CCHQ “for hardworking people” mantra; even if it included a new minimum wage called a “living wage”, the era of big government was closing. Though he had pushed the target back a couple times, it looked like by the end of the decade there would finally be a surplus. Even this week I read that according to the IFS in the coming years that state spending will be back to what it was when the last Conservative government left power in 1997, the lowest since World War II, and focused on essentials like care for those who need it most and the military. But, alas today…..
As these wonderful charts from the Spectator show, the Chancellor today announced a big splash of spending, with a nice sprinkling of additional stealth taxes, all to begin coming into effect around 2017. He ditched the tax credits cuts passed multiple times by the Commons that the Lords “delayed” (vetoed), despite the Lords violating centuries of Commons supremacy. He proclaimed that he wasn’t being irresponsible with his additional spending sprees and that he’d still meet the balanced budget target because, you know, boom time growth would make up for it (that amazingly they just discovered in the past six months) that is assured to last until 2020. Now if this formula sounds familiar, the “finding additional money” for politically expedient projects or the “economic growth will bring in the additional revenue” or the even the crystal ball like ability to know what exactly growth will be like in the next decade, then you are probably thinking of a Chancellor turned Prime Minister named Gordon Brown. The man who left the United Kingdom, and its new Chancellor George Osborne, with the biggest deficit in the western world. A man who Osborne was known to loathe.
Now, it’s not completely fair to call George Osborne the new Gordon Brown. He is still making some deep cuts, most notably to department that should be cut or merged with other or abolished entirely, such as Transport, Communities and Energy and Climate Change. And not all spending is bad, I am very happy for instance that the government is strengthening defense, and that now the UK has the third biggest defense budget in the world. But there is clearly a change from 2010 Chancellor Osborne to 2015 Chancellor Osborne. What’s the change? To me it’s obvious, David Cameron is not going to be Prime Minister after the next election and George Osborne wants to be Prime Minister. So I theorise that the Machiavellian Osborne is priming himself to be party leader by doing only popular things, thus getting the support of MPs to back him at the time of the next leadership election. And my theory is not unique, Paul Goodman in Conservative Home has said something similar. It is further well known that George Osborne in actuality runs Westminster, promoting his friends and punishing his enemies. Therefore, why would he risk an unpopular decision like ending the dependency cycle of tax credits when power is so close at hand?!
I don’t mean to take up Vince Cable’s old roll as Jeremiah, but I fear George Osborne may look back at his second term as Chancellor with profound regret. Early in his life, like many young men (me included right now), George Osborne was a strong free market advocate and a believer in balancing the books. Supposedly he still is of this political persuasion. But as time goes on he has discovered that occupying the “centre ground”, being as many things to as many people as possible, will earn him the most political friends and weaken his opponents. And I have no doubt that this strategy will be successful in the short term. Labour is run by loony tune dinosaurs, the Lib Dems have all but disappeared, and to the centrist apolitical voter that have at times in the past voted Labour or Lib Dem, the Tory Osborne rhetoric, like Blair’s, will sound comforting and appealing and win votes. Most likely, barring a (not incredibly far-fetched) event like say Boris or Theresa May leading the Leave campaign to victory over Cameron and Osborne in the EU referendum, I have no doubt that Osborne will attain his goal of occupying Number 10. But what is the point of having power if you don’t intend to use it for a purpose?
George Osborne is not at all a lost cause. He has done great deal of good as Chancellor and he can still do a great deal more. But, I cry out, as a voice in the desert that George Osborne will certainly not hear, to look at the consequences of history and to return to the goal of balancing the budget and truly having an economy with low taxes and low government dependency. Please look at what happened to those men who abandoned their political principles for power. Look at Ted Heath and his capitulation to the strikers. Look at Nixon, a man who embraced almost every Democrat proposal of his era, pushed his opponent (George McGovern) way to the left to achieve a historic landslide victory only to be forced to resign due to a scandal that was spurred by his lust for power. Look even to George W. Bush, whose Republicans with their complete control of government, after being fiscal hawks under Clinton, abandoned their principles to spend wildly in the hope of achieving perpetual power only to have it come crashing down with the financial collapse leaving a massive hole in American finances. Remember in contrast Margaret Thatcher, who was not for turning, not for backing down, and who saved Britain from its perpetual decline to making it great again. Heath, Nixon and Bush will in hundred years time be known only by historians. A footnote on the ash heap of history. Thatcher will be remembered forever.
If Osborne returns his focus and legacy to truly fixing Great Britain while the sun is shining and continuing getting people working and free from the government, he will be among the greatest Chancellors and later Prime Ministers. If Osborne continues to go down the “free money” popularity path, he and historians will look back at his time as the era of another typical “basic” self-serving politician. But if Osborne returns to the tough but right decisions of the early chancellorship and then makes responsible decisions as Prime Minister, history will remember him fondly. However, putting historical legacy aside, if I had one more question to ask the Chancellor it would be this: what does it profit a man to gain the whole world but lose his soul?