So far so good this week for David Cameron and George Osborne as they unpick mistakes that they and their ministers (not Labour or the Lib Dems) have been making since 2010. As an advanced briefing is indicating though, Wednesday’s official autumn statement will be much harder to spin.
Since Monday they have managed to generate more positive headlines than they deserve in rejigging the budgets for health and – much smaller – the defence of the realm, both of which have been feeling the strain and will continue to do so after this week’s paint job. The shadow chancellor, John McDonnell, is already on the case.
But a general, an admiral and an air chief marshal were handily lined up to write supportive letters to the Times without carping on too much about Liam Fox’s slapdash strategic defence and security review (SDSR) in 2010 or the mounting cost of two aircraft carriers and four nuclear submarines.
As for the NHS, we have witnessed an extraordinary spectacle of outsourced political power: the man whose agreement is universally deemed necessary to seal the deal is not the secretary of state in the Cameron cabinet – his name is Jeremy Hunt – but the service’s unelected chief executive, Simon Stevens.
Stevens, who was Tony Blair’s health adviser at No 10 during New Labour’s reforming days, is a highly experienced health manager – both NHS and private sector – as well as a very canny political operator who knows when to take the stage or step back.
When Stevens announced he would need an extra post-inflation £8bn by 2020 (plus £20bn of “efficiencies”) Dave and George said yes. When he said he’d need a lot of the wonga up-front they said: “Of course, Simon, anything you say Simon.” I have never read a threat of resignation attached to Simon the Smoothie, let alone to Jeremy the Jeremiah, but the former is clearly what No 10 and 11 fear. It is an odd state of affairs.
But, as with defence, juggling the budget to address urgently visible problems, comes with a price: the storing up for the future of problems currently less visible but stubbornly persistent. In both cases it is not all the government’s fault because the demand side of the equation – an ageing and growing population, the rise of Islamic State or resurgent nationalism in Russia – contribute to budgetary pressures.
Osborne was surely right to pile an extra £2.5bn into the intelligence services, which don’t seem to be quite as crippled by Edward Snowden’s whistleblowing as they claim to be. More drones, new maritime patrol aircraft to correct another Liam Fox error, a lot of very expensive F35 Lightning fighters, beefed-up Typhoon squadrons, two rapid deployment strike brigades, the list goes on and much of it seems sensible enough.
The shopping list will, incidentally, do more good for US defence contractors than for ours. But behind the smoke and mirrors are the extension of the working lives of creaking programmes, mostly conspicuously (albeit in their inconspicuous way) the Trident fleet, whose rusty rivets should scare our enemies as much as their missiles.
As with healthcare planning and a 24/7 NHS, manpower shortages may inhibit the government’s plans for expanding the capabilities of Britain’s 24/7 armed forces. Pay, morale and recruitment remain weak. Fox got rid of a lot of pilots his successors probably wish they’d kept. Doctor shortages in some specialisms are getting serious too. Winter looms.
Wednesday’s statement from the chancellor is expected to confirm that social care – what councils do for elderly and vulnerable people – and public health – what health professionals do to save the NHS more money later on – will both be hammered to find the cash Stevens needs for high-profile hospital and primary care. Paradoxically, the cuts will pile more pressure on A&E and GPs.
So, more than with most chancellors, this is typical Osborne. He gives the appearance of balancing books – overall the budget has not balanced since 2002 – while hollowing out less visible or popular services and using UK plc’s credit card to keep the show going.
McDonnell makes some good points here. I don’t share his view that austerity is merely a political choice by a small state ideologue, although there are always ways of doing things differently. Cutting further education again and apprenticeships (less admired, but just as useful in their way as Oxbridge) helps create a low-skill, low-wage economy. And he wonders why tax receipts are down?
It wouldn’t be easy for anyone running the Treasury in these difficult times, least of all “faster growth” fantasists. The world economy is mostly sluggish or worse and renewed British growth (2.9% in 2014, 2.4% this year?) is debt-driven and faltering.
Embarrassing weak tax revenues piled an unexpected extra £1bn on borrowing last month. Exports are disappointing. Reducing the deficit gets harder and slower. Arggh! Chancellor McDonnell couldn’t control such items either: they would be beyond his reach. Osborne will have to tweak last summer’s budget figures. Nothing new there: events dictate more than chancellors do.
Politicians do have some power – they can choose between priorities. Health, parts of defence and education, plus overseas aid, have all enjoyed some protection, albeit less than claimed. State pensioners benefit from another chosen priority, that “triple lock” (when tabloids deplore “welfare” they usually avoid saying “pensions”), though Osborne’s new pension “freedoms” for those with private pensions may prove another example of short-term gain for long-term pain. He piously talks about saving more, but he needs the oldies to spend, spend, spend.
As every commentator points out, that leaves few spending departments to take the hit. Faced with a determined House of Lords and some wisely wobbly Tory backbenchers, the chancellor is in retreat over the crudest cuts in tax credits, another costly feature of Gordon Brown’s boom-years legacy, much as we all predicted. He may even have to breach his own bogus cap on government welfare spending.
But more cuts in the police budget just when everyone is feeling jittery about Kevin the teenage jihadi and online wannabes trying to show they’re tough? That’s not politically savvy, let alone proper, for a man who wants to move next door to No 10 one day.
