If there was a stock market in politicians George Osborne would be a sell right now. His price soared after the Tories’ startling election victory, pushing him ahead of Boris Johnson and Theresa May to become the favourite to succeed David Cameron as Prime Minister when he steps down before the next election. But recent weeks have not been kind to Osborne. He was defeated in the Lords over tax credit cuts and, more generally, the public is tiring of his austerity agenda. His autumn statement on Wednesday, setting out the Government’s spending plans for the next four years, is a day of reckoning for him personally and the country at large.
The latest opinion polls underline this point. According to ComRes in the Independent on Sunday, Osborne’s favourability rating has slumped to minus 19, well below Boris on plus 17 and May and Cameron on minus four. One crumb of comfort is that he is not in Jeremy Corbyn territory (minus 28 and sliding as the Labour leader discovers that opposing the British public is not a vote winner).
More immediately, on his specialist subject of the economy, Osborne has also got problems. An Ipsos Mori poll for the Evening Standard last week, found that only one person in three believes that it is still necessary to reduce the deficit, still running at about £70 billion a year, half the level of the Gordon Brown crash years, but far more than Osborne originally planned when he took office in 2010.
Nor do the public approve of his priorities. If cuts are to be made, 60 per cent of people want the £12 billion overseas aid budget to take the strain. Only 3 per cent believe that police numbers should be cut.
“George Osborne is cutting the wrong services, say voters” was the perfectly accurate Standard headline.
The political weather has changed sharply since the summer when the Conservatives won an election centred on a pledge to eliminate the deficit by 2020, make further welfare cuts of £12 billion (exactly the same amount of money as the aid budget), and begin the mammoth task of paying down the accumulated national debt, now over £1.5 trillion and one of the highest in the Western world.
At its simplest, with the country facing its worst terrorist threat ever, the public is asking is now the time to talking about cutting police numbers, potentially by 5,000 officers in the 32,000-strong Met alone?
At a deeper level, people are wearying of the austerity agenda, still the defining feature of the Cameron-Osborne regime. One the one hand, Osborne and Co talk about the strength of the recovery (Britain the fastest growing economy in the Western world), and on the other they signal that over the next four years unprotected services – care of the elderly, libraries, rubbish collection, police and fire, courts, prisons, troop numbers – face cuts of a further £20 billion or around 20-25 per cent.
You can almost hear the sound the deck-chairs being rearranged on the good ship HMS Treasury. Police numbers still to be cut (though maybe not in London) but extra money for counter-terrorism measures; reductions in military manpower but more jets to be ordered for the two aircraft carriers under construction; more armed police and soldiers ready to take quickly to the streets in the event of a Paris-style terrorist attack.
Paris has changed a good deal in terms of UK spending priorities. Even the aid budget, a hallmark of early Cameroon modernisation, is to be reshaped to focus more of its largesse on measures to enhance security and stability in troubled states and less on lining the pockets of corrupt dictators.
Note also the change in ministerial rhetoric. The urgent demand for national security is being explicitly linked to the need for economic security – i.e. balancing the books despite the pain it causes.
Yet one should not be too hard on Osborne. He has stuck to his guns, fighting and winning an election on an explicit promise to do pretty much what he will set out on Wednesday. Barring disaster, the deficit will be eliminated by 2020, the nation’s accounts will be recording a small surplus, national debt as a percentage of national output will be falling, albeit slowly. The tax credit row will be addressed through phasing in the reductions and by boosting bottom end pay and reducing taxes. The police and defence lobbies will get some relief. And, according to the Institute for Fiscal Studies, by the end of the decade, the British State will be taking as much of national output as it was in the late 1990s – about 38 per cent.
This is hardly slash and burn economics. Nor, as Fraser Nelson pointed out in The Daily Telegraph last Friday, did the sky fall in with the last round of cuts. Opposition party lurid warnings of as many as a million lost jobs were totally confounded; schools did not close; local government did not collapse; crime actually fell faster than the policing grant.
As I have argued before, the British State is still too big – and will be still too big by the end of the Osborne cuts mark 2. It is also performs poorly, especially in the key areas of heath and education. Reform designed to break down public sector monopolies and offer real consumer choice and service is badly needed.
At times, Osborne is reminiscent of Sisyphus, endlessly rolling his boulder up the hill. But this time the boulder does not always roll back. The Chancellor might yet push his burden to the summit.