George Osborne is respected for his approach to the public finances, but he is not well liked. Yesterday’s Comprehensive Spending Review was his chance to shape the ground on which his leadership campaign and the next election will be fought.
He chose to prioritise the NHS, housing and education – three decent pillars for any election campaign. His recent defeat over tax credit reform damaged him because it compounded the impression that he doesn’t understand the human cost of austerity.
In a poll of Conservative supporters conducted after this episode, he had dropped from first to third among the contenders to replace David Cameron. Yesterday’s move to scrap the reforms rather than mitigate their impact as expected shows that he understood he had to do something dramatic to repair the damage.
To demonstrate that he is able to listen, concede and move on is important for his future career and worth paying the price of exceeding his cap on welfare spend.
Chris Rumfitt, founder and chief executive of Field Consulting, says No
By backing down on tax credits and backing down on police cuts, George Osborne’s Spending Review didn’t quite have the harsh edge many had expected.
Funded by a £27bn boost to the public finances from changes in the OBR forecasts, the chancellor calculated that the tax credits fiasco and planned police cuts were harming his chances of succeeding David Cameron and decided to execute quick and clean U-turns before they did him any more damage.
But having built his reputation on being the austerity chancellor, taking tough but necessary decisions, where do these U-turns really leave his credibility? And how does he now look against Theresa May, after the home secretary so clearly won the battle on police funding?
The harm to Osborne is not fatal, but Tory MPs no longer think he walks on water. The advantage he had a few months ago has eroded and the leadership contest is all to play for.