Stormy outlook ahead as Number 10 roof begins to leak

The Chancellor of the Exchequer used to have a favourite phrase – that we should fix the roof while the sun is shining – but it has got rather stormy out there – in the real world and in British politics. Whilst the factors holding the Coalition together are stronger than those pulling them apart, tensions across politics are ratcheting up.

While most the UK has returned to work this week hoping for a quiet time, the Cabinet has been welcomed back with a raft of issues; immigration, severe flooding, a strike by Fire Fighters, the verdict in the Mark Duggan inquest (the case which sparked nationwide rioting in 2011), and some major strategic positioning by key figures in all three major parties.

The deficit and the coalition
This week the Chancellor of the Exchequer George Osborne reiterated the Government’s key five point economic plan. The plan’s points are:

  1. Reducing the deficit
  2. Cut spending to cut taxes
  3. Better infrastructure and lower taxes for business
  4. Cap welfare and reduce immigration
  5. Better education

Crucially he committed the Conservatives to a further £25 billion of cuts and from major programmes; namely, £12 billion of welfare savings. Immediately the Deputy Prime Minister raced out to describe Osborne’s speech as “a monumental mistake”.

The Deputy Prime Minister, Nick Clegg, said: “You’ve got a Conservative party now who are driven, it seems to me, by two very clear ideological impulses. One is to remorselessly pare back the state – for ideological reasons just cut back the state.

Secondly – and I think they are making a monumental mistake in doing so – they say the only people in society, the only section in society, which will bear the burden of further fiscal consolidation are the working-age poor.”

The Lib Dem rank and file are agitated by Osborne’s speech – they do not want to be tied to Conservative spending plans at all (or an overall deficit reduction fugre after the next General election). In a week where Sir Menzies Campbell MP said that the coalition should end before the next election it is clear that the centrifugal forces pulling at the core of this Government are getting stronger.

Meanwhile, there was an interesting development in Lib Dem – Labour relations as Ed Balls, the Shadow Chancellor, gave an interview to the New Statesman where he indicated a rapprochement with Nick Clegg. The New Statesman suggested that this was a sign that Balls is hedging his bets but some in Westminster have seen it as a sign of weakness. Whichever camp is right it is clear that Clegg will not be tied to the Labour or the Tory party ahead of the 2015 ballot.

However, it is three big policy areas which will be keeping various Mandarins and politicos up at night.

NHS Reforms
Circle Healthcare is rumoured to be looking to partner Peterborough Hospital with its original at Hinchingbrooke. This will be controversial and will (rightly or wrongly) trigger even further murmurs that the NHS is being privatised by stealth. Moreover, the Government’s reforms to the NHS are about to hit financial bumps which will change the current  speed bumps into roadblocks. The funding picture for Clinical Commissioning Groups suggests that in-deficit CCGs will lose out even further under the new funding policy. The Labour Party will no doubt oppose but this will be a headache for the Lib Dem leadership. Whether an emergency motion be tabled at the party’s spring conference to comment on reforms will likely begin to occupy the minds of the party leadership and the staff of the DPM in particular.

Universal credit
In the meantime another of this Government’s flagship policy initiatives is running into trouble. DWP’s adoption of Universal Credit has exposed wrangles between the Chancellor and Iain Duncan-Smith MP and between IDS and his Permanent Secretary. There have now been rumours of a major rift between Iain Duncan-Smith MP and Francis Maude MP. The Cabinet Office’s Government Digital Service (GDS), which reports to Maude, has left the Universal Credit project which lands the DWP in trouble. It is as yet unclear whether they will be able to get the right expertise to follow this through. The whole project is descending into the territory of an omnishambles.

Free schools
Lastly, the Government’s free schools policy is about to be hauled over the coals. The Public Accounts Committee chaired by former Labour Minister Margaret Hodge will be grilling Chris Wormald the permanent secretary at the Department for Education on Monday next week.  Interestingly the Minister, Michael Gove is not this time putting his head above the parapet.

One other forthcoming development is that the Chairman of the Defence Select Committee James Arbuthnot is set to step down. This will be the first Chair of a full departmental select committee to be re-elected. It will prove quite a challenge to MOD civil servants and to the new found assertiveness of Parliament and the class of 2010. The new Chair will be a Conservative MP but it is unclear whether the candidate will be a relatively orthodox figure or whether the eventual winner will have a more abrasive style. If so, defence spending could become a real political and diplomatic hot potato, as it is in the Senate and House Committees in the US.

A sad day for British politics
On a final note, British politics saw a genuinely emotional response to the sad death of the MP for Manchester Wythenshawe and Sale East, Paul Goggins. He will be missed on every side of the House and by all who have had the pleasure of dealing with him, including at Keene Communications.

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