One of the pleasures of being one of the more politically centrist people in your own party,1 is the regularity with which your opponents let you down.
I can usually understand why the Labour party doesn’t do what I want, whether because of the balance of forces in the party, historical attachment to certain policies, fear of disillusion, differing ideals or, most often, what I see as certain blithe psephological overconfidence. Because I just can’t quit you, Labour, I forgive all of this lunatic “not doing what I want”. Basically, I feel the same way about the Labour party as I do my pet cat. Its patterns are known to me, its reasons inscrutable, my affection non-negotiable.
As I have no such attachment to the Tory party, their strategic idiocy is much more frustrating. I am still confounded by how on earth George Osborne could have thought cutting the 50p tax rate during a weak economy was a good idea. It was that decision, and the other idiotic ones in the budget that were wrapped up with it that set the Tories back on their heels for the rest of the year.
So, in full certainty I will once again be disappointed, I offer Mr Osborne a path to a certain degree of political recovery up to and beyond the Autumn statement.
1. Play Robin Hood.
Osborne can’t reverse the 50p top rate tax cut, but he can put the squeeze on the wealthy in other ways. He should do this, and use the money for tax relief for those on low-middle incomes. Fuel Duty relief has been signalled, and would be popular, but it’s downside is that it’s expensive and temporary.
If possible, find a whole series of taxes on small business and families that can be permanently lifted. Stamp duty at the low-end, VED, Look for ‘Reverse pasty Taxes’, basically..
2. Hold down Welfare costs, but give it back to workers
Annoyingly, The Tories can’t break their promise on universal benefits (though I feel it would be a good promise to break, if the money could be used well). They can do some things though For example, why not delay universal credit to post 2015, and use saving from holding benefits uprating down to increase tax credits, so you increase work benefits, but hold down benefits for non-workers.
I expect the government would rather lift the basic rate tax threshold to 10k, meeting a key LibDem pledge, but to make that affordable you probable have to play fiscal drag on the upper-rate. Personally, I think tax credits are cleaner and better targeted at the medium-low end of earnings. But I’m not a Tory, so whatever.
3. Play hardball on Europe
Not strictly in his bailiwick, but the Tories would be mad not to find a way to impale Labour on their new desire to cut the EU budget. The problem is how. As the PM is discovering, without inching towards the exit door, there are few good options.
One option would be to threaten to block the next long term-budget, forcing annual budgets on the EU. The consensus is that this would mean annual increases that would cost Britain more.
However, you could see this as the chance for Cameron to run a sustained campaign against EU waste and inefficiency, almost daring other governments to push through an increase in the EU budget despite austerity at home. In effect, he would be like a State governor, running against Washington. That would leave Labour either trying to agree with him, or in the awkward position of defending the EU.
The risk here is that it explodes in the government’s face, especially since the LibDems will feel conflicted, but since the alternative would be seen as a humiliating climb down, running towards the gunfire might be worthwhile, especially if Cameron could make the issue about waste and inefficiency, not the EU itself.
4. Make the whole next parliament an austere one.
No Chancellor wants to miss their deficit targets. But Osborne needs to find a way to slip the noose he’s put himself in. He can’t back out of Plan A, but he needs to find some creative accountancy that allows him to in fact spend a little more to 2014, when growth is more established.
Osborne’s been helped out by the Bank of England, but he should try to go further, so he has a little more short-term fiscal flex. This will all be very Gordonian, but the opposition front bench can’t credibly attack that.
The big political advantage of sliding the deficit problem through to 2015-20 is that is becomes more likely to be the defining issue of the next election campaign.
5. Don’t give in to the headbangers.
The Tories need to show they’re different on something social.
Here’s a controversial suggestion – the Tories should launch a pro-immigration policy, and make a big deal out of it, but for those at the top end. They should kill off the immigration cap for those with higher degree and incomes over £50k and make a big deal of encouraging businesses and staff from growing economies to the UK, even offering tax breaks.
This would allow the Chancellor and PM to show their heavily occluded, socially liberal side, and give Nick Clegg something he can be happy about.
So, any takers?------------------------------------------------------------------------------
- along with people sometimes telling you to go and join the other lot, which always seems an oddly self-defeating line of argument to me. I mean, shouldn’t political parties in general want more members? [↩]