What is the Osborne/IDS row all about?

As some commentators are expressing incredulity that Iain Duncan Smith has found himself a conscience over welfare cuts for disabled people, not long after signing off those very same cuts, or are attibuting these events to a phoney war over Brexit, I think there is a more interesting possibility.

If we take IDS position at face value, this reveals something about how government works – or about how it did work under the coalition and is now liable to go wrong.

IDS position is that his cuts to PIP are defensible “narrowly” – that they are reasonable in the context of his welfare reform agenda and the need to make public spending cuts overall but are not defensible in the context of a budget that contains big giveaways to the better-off, such as the CGT cut back to 20% (the rate it was under Labour) from the 28% it was set to under the coalition to raise revenue more fairly and reduce tax avoidance.

Osborne’s position is that IDS signed off these cuts, which he should not have done if he was not prepared to defend them, full stop. IDS has been mugged by the treasury in that the budget was not one he was expecting.

This is a failure of communication. A government should not need Liberal Democrats in both departments to do its thinking in a more joined-up way. Though clearly, Liberal Democrats would have blocked the idea at birth, as we did during the coalition.

It is also a sign of treasury dominance. We have a treasury bold enough to set education policy, to (and this I agree with) devolve power over economic levers to city regions, to butcher BIS, now that Vince Cable has moved on, to rule the rest of Whitehall. A sensible division of labour in a government with few consciences to go round would be for the Treasury to ask for welfare savings, because its job is balancing the budget, and for Work and Pensions to deploy a conscience and resist anything too vicious. This relationship is clearly unbalanced at the moment in the favour of the treasury.

I realise I am in danger of giving IDS too much credit – we can only speculate as to his true motives. But it is Osborne that comes out of this looking the worse of the two. I wish it weren’t so: Osborne is the Remainer.

What is more, it is Osborne who is driving the northern powerhouse agenda from the treasury. This is where it needs to be because only the treasury or the PM is powerful enough to bang all the necessary heads together. Now the Northern Powerhouse, the devolution deals, are not ambitious enough, but they are, for now, survivors from the front page of our 2010 manifesto to “rebalance the economy”. I genuinely fear for the north if Johnson or May become Tory leader that the whole thing will be quietly forgotten.

You may say I am for treasury dominance when it suits me, but really I am for a better kind of joined up government than this.

* Joe Otten was the candidate for Sheffield Heeley in June 2017, is a councillor in Sheffield and is Tuesday editor of Liberal Democrat Voice.

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3 Comments

  • Richard Underhill 22nd Mar '16 - 8:29pm

    William Hague writes in the Telegraph that he advanced IDS’ career, once when WH was leader of the Toriesin opposition and again after coalition negotiations as they entered government.
    Missing from the article is any reference to IDS consulting WH about a possible resignation.
    Included is a sad conclusion that IDS has made a mistake by resigning.
    Not included is any inference that WH made a mistake.

  • Richard Underhill 22nd Mar '16 - 8:36pm

    Joe Otten | Tue 22nd March 2016 – 12:51 pm The devolution deals are variable geometry, to put it mildly, fronted by the softly spoken MP for Tunbridge Wells. There is a danger that Liberal Democrats might take our eyes off this particular ball, if it is not affecting us directly at the moment.

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