Economic gloom spells trouble for Tories

Posted on November 30, 2011


One could almost feel sorry for George Osborne as he faced the House of Commons to deliver his bleak autumn statement, knowing he was about to paint a dismal picture of the British economy and undermine his own claims of competency in handling its problems. That is, if one was able to forget that he had broken major coalition promises and effectively proven that his bluster as Chancellor has not been matched by effective actions.

His promise to pay off the deficit by the end of the current parliament has been broken. The new prediction is 2016 or 2017, but given the coalition’s proven willingness to make unfulfillable claims there is room for doubt over whether even this will be accomplished. For all his criticism of Labour for excessive borrowing, Osborne was forced to swallow his pride and announce that the ConDems would be borrowing £158bn more over the next four years than it had originally promised. Growth this year is projected at just 0.9%, with an even more worrying 0.7% expected this year. Where Osborne and his government promised to get the economy moving, they have demonstrably failed.

Those who will pay the price for this failure, aside from those who will have their tax credits frozen and their working lives extended sooner than promised, will be the Conservatives. Becoming the largest party in the Commons – note, not winning the election – resulted primarily from lack of confidence in Labour’s ability to manage the economy and Osborne’s claims that he was the man to sort out the mess. “No pain, no gain”, we were told as the coalition introduced harsh austerity measures, that will now get harsher still as Osborne refuses to ditch his failing economic plan. “We are all in this together”, he said, as he directed these austerity measures towards the squeezed middle and working classes. Public sector workers and those reliant on credits will feel the pain. Family finances are set to take a big hit. “Two more years of substantial real public spending cuts: that is what the Chancellor has promised,” said Paul Johnson, director at the Institute for Fiscal Studies. “Until now we had been thinking of four years of cuts as unprecedented in modern times. Six years looks even more extraordinary.”

Yet those hit by these extended cuts and grim financial predictions are the middle classes that the Tories will be looking to if they hope to return to power after the next election. So far voters have been patient, but if the economy fails to adequately recover (which is more than likely given current predictions and the trouble in the eurozone) then the Conservatives will be entering the next election as the party that made sweeping cuts, raised taxes and yet still failed to cut the deficit. It would be hard to see them winning such an election. When the coalition was first formed, I predicted it would be two years before it disintegrated or Cameron called another election to try and win a majority. Now I see this parliament going the distance. The Lib Dems have no interest in forcing an early election, as their one hope of avoiding massacre next time round is proving that they are a party of government given their abandonment of their traditional voters. For their part, the Conservatives are pinning their hopes on economic recovery, a prospect that continues to stretch ever further into the distance. With strikes and discontent serious enough after the first helpings of cuts, these latest offerings are sure to lead to many more. If Labour can harness such negative feelings towards the coalition better than it has thus far (though Ed Balls is certainly doing his best to rip shreds off the embattled Chancellor), and the economy continues to stumble, then the Conservatives may never get their chance to break free of their pesky coalition partners and form the majority government they desire.

Posted in: Politics