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Osborne has set off another round of differentiation – who will gain from it?

By Peter Hoskin
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The recent Spending Review was meant to be a united front: a hypothetical overview of how the Tories and Lib the Dems would together manage the public finances in the year after the election. But since it was delivered it’s been differentiation-a-go-go. Not only have we had George Osborne setting out a position on tax and spending that may not sit well with the Lib Dems, but today we also have Vince Cable attacking the Tories in rather scornful terms. “We can avoid,” he’s set to assure a Lib Dem audience in Manchester, “the sort of cuts that Conservative politicians seem all too eager to anticipate.”

This may not be surprising, particularly coming from Cable, but it’s still striking. It suggests – as Harry Phibbs did on ConHome yesterday – just how politically significant Osborne’s little pledge could be, in distancing the Tories from the other two main parties. And it’s also representative of the new normal in Coalitionland. Increasingly, the two partner parties are defining themselves by their differences rather than by what unites them.

As it stands, I’m sure Osborne will be relaxed about all this. He’s clearly calculated that it’s better to be seen as a party of axes, not of taxes – and Cable’s words will only add to that perception. But the Chancellor ought to be wary as these next two years progress. As we know, the Lib Dems are eager to wear and flaunt the mantle of compassion within Coalition, and claim that they act as a restraint on those horrible Tories’ most horrible instincts. Expect them to start telling the story that deficit reduction by spending cuts alone means extra pain for women and the least well-off.

Part of the Tory counter to this will have to be presentational: the party’s agenda should, and can, be sold in compassionate terms. This might sound obvious, but it happens all too infrequently. There was some accidental irony in Michael Gove’s claim, in his recent Keith Joseph Memorial Lecture, that “the work of Conservatives in Government to tackle deprivation is at the heart of David Cameron’s mission for our party” – because Cameron so rarely makes this point himself. In fact, Gove’s lecture is almost alone in describing how, in his words, “the cause of social justice is embedded in every [Government] policy area”. It ought to be used a template for future speeches by other Cabinet ministers.

And then, of course, there will have to be new policy to support the rhetoric. Here, I wonder, will the Chancellor be tempted to extend the personal allowance further beyond the £10,000 level, a policy which has the distinction of being both a tax cut and beneficial to the least well-off? The Lib Dems, it seems, will be going into the next election with a promise to raise it to £12,500. If, as I’ve speculated before, the Tory manifesto matches or even exceeds that, then relations will fray even further.


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