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The split on welfare spending is now official — should the Tories do more to distinguish their fiscal plans from the Coalition’s?

By Peter Hoskin
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Mark the date down in your calendars, ConHome readers: we officially have an intra-Coalition split on welfare spending. It’s been months in the making, ever since George Osborne first mooted the possibility of £10 billion in extra welfare cuts, timed for the two years after the next election, in his Budget speech this year. But it’s taken until this week to become a formal divide. First, Mr Osborne, in tandem with Iain Duncan Smith, confirmed that the cuts aren’t just something he’s mooting but something that he’s aiming for. And now, today, as the BBC reports:

“Asked about the prospect of further cuts, [Nick] Clegg said: ‘The idea that of that £16bn we're just going to scoop out £10bn from welfare — which will inevitably hit the poorest before asking anything of the wealthiest — no. Flatly no.’”

This Conservative-Lib Dem split doesn’t augur well for the forthcoming Spending Review, which might have clarified the hazy post-election spending plans that are written into the Budget. The likeliest outcome now is probably a period of bad-tempered negotiation, followed by a Review which either ignores or skims over the two fiscal years after 2015. This might sound tolerable — a normal side-effect of Coaltion — but I reckon it's more problematic than that. Ideally, Whitehall should have as long as possible to prepare for any future cuts, so that they might be translated into reality. If this is denied them, then those same cuts might be tougher to implement after the election.

But there are other options. If Mr Osborne really wants to get these cuts carved into the Spending Review, then he might consider making some concessions to the Lib Dems. In which case, I would — Blue Peter-style — pull out the post that I made earlier, on just that subject. But there’s a problem: many of the concessions that I mentioned already seem to have expired as possibilities. Cuts to universal benefits? Wealth taxes? Mansion taxes? No, no, no. The Tory leadership would have to rethink its opposition to some of these policies, or they’d have to look into some of the other concessions that I mention in my post: Trident, party funding, etc.

All of which makes another idea worth considering, at least. The Coalition could hammer out as detailed a Spending Review as it can, whilst the Tories make it clear — either in footnotes or in a separate document — what they would do in case of a majority government after 2015. Not only would this give Whitehall a sense of what to prepare for, but it would also support the argument that it’s the Conservative half of government that is taking the “tough decisions” about our fiscal future.   

This last idea may not be normal procedure — it may not even be practicable — but the public finances are too important to be glazed over with doubt. Sometimes, so long as it doesn’t upset the overall unity of the Coalition, a little bit of difference could be helpful all round. And that goes not just for fiscal policy, but for matters such as Europe too. Your thoughts, please.


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