THE BLOG

Osborne's 'One Nation' Credentials Now Firmly on the Line

22/03/2016 12:24 GMT | Updated 23/03/2017 09:12 GMT

Responding to the resignation of Iain Duncan Smith on Friday night, the 10 Downing Street response unit swiftly proclaimed that they remained a 'one nation government.' This commitment involved, they argued, 'mak[ing] the welfare system fairer, cut[ting] taxes and ensur[ing] we have a stable economy by controlling welfare spending and living within our means.'

All this was fairly boiler-plate stuff - perhaps understandable given many Downing Street staff were probably watching Gogglebox rather than at their desks when the Duncan Smith news broke.

But such linguistic slippery is made simpler because few really understand what 'one nation' politics actually means. In essence Number 10 could say what they wanted.

Rather than socialism or conservatism, there are no three or four sentences people could readily roll off by way of broad definition for this concept. Given Ed Miliband launched his 2015 Labour manifesto on the back of the slogan, and now the government is trying to (re-)claim the mantle for its reforms, this is unfortunate.

Yet in reality the one nation concept is not as abstract as all that. Ian Gilmour, a former "wet" Cabinet minister under Thatcher, proffered several guiding principles for one nation politics in the modern era.

Gilmour was a key thinker about the nature of the state who deserves more recognition than perhaps he has got. And other than generally being pro-European (difficult, for obvious reasons, for the current Cabinet), he suggested three main areas that should guide the would-be one nation politician. Given current debates, they are worth a look.

The first was to be wary of 'neo-liberal economic doctrine.' So-called 'Neo-liberalism' can become a bit of a wishy-washy criticism for any policy that isn't overtly of the far left. But there is a deeper point here. Both the market and the state are means and not ends; and this matters for both Labour and the Tories. The balance between public and private enterprise should be a sensible one.

So, on the one hand, when Liz Kendall said she would back the retention of free schools which were producing positive results had she won the Labour leadership, she was approaching the question with nothing but commonsense. Such pragmatism is only sensible because it is clear that public-private partnership has delivered much for this country. When Harold Wilson's record 425,000 housing units were being erected in 1968, over 200,000 of those were private built. Even if one takes a Whiggish view of British history, the public sector hasn't shaped modern Britain on its own. Even under the record peacetime dirigisme of 1975 Denis Healey for instance, government spending still stood at under half (48%) UK total economic output. Labour will need to take a sensible approach to the private sector if it is to stay in the game.

But the point is that as Labour toys with re-running the Michael Foot playbook the Conservatives could have had this terrain sown up by now. One under discussed bit of context in this regard has been David Cameron's pre-election pledge not to raise any of VAT, National Insurance or Income Tax in the current parliament. Forget the exact sums for a moment, this means that the relationship between the state and the private realm can really only balance towards the latter (particularly given the concurrent lowering of corporation tax). This is an extreme, even bizarre course to take. Tying one's hands in this way assumes that capitalism can only go one way, up, and that tax rises will simply not be needed. 2008 suggests this is not a wise course, and it certainly fails Gilmour's test in giving such blind faith to the market. Veneration for the state is a bad look for the left, but so too is blind faith in the market for the right.

Secondly, Gilmour's next one nation test was for a government to hold a concern for the 'wellbeing of the entire population.' Here the PIP fiasco has been damning. If the famous Laffer Curve has been trotted out by the current administration to justify why higher rate earners must have their taxes lowered, cutting the benefits of the disabled on the basis of anecdotal tittle-tattle from DWP staff indeed seems an odd corollary. One nation is about a laddered, hierarchal society where all co-operate, not where one group is unleashed at the expense of another.

This is an important point. Gilmour's emphasis on mutual 'well-being' did not imply socialism: one nation politics explicitly does not mandate opportunity of outcome. But rigging the game in favour of upper and middle earners is so far removed from its definitions as to make Treasury assertions in this direction laughable. With the bottom decile of homes set to see no benefit (or even a net loss once welfare savings are clarified) from the budget whilst the top decile benefit by an average of £260 a year, this is no level playing field.

And that is the point. Under a one nation government the playing field should be level. If the match itself finishes 3-2, so be it, but the government should not prove a doctrinal referee. In this regard the National Living Wage - dodgy re-branding as it is - could have been an historic step forward for Osborne. In reality, as Rachel Reeves rightly spots, his fiscal strait-jacket will likely see its level dwindle downwards from initial projections.

Lastly, most pointedly, Ian Gilmour noted the 'importance of the social services' being a key part of the one nation agenda. It is here that Iain Duncan Smith's words about 'certain policies' being enacted 'to meet the fiscal self imposed restraints that I believe are...distinctly political rather than in the national economic interest' are so damning for the Chancellor. The Osborne-Cameron project set out to prove that the Conservative Party had moved on from the 1980s. That, like Tony Blair, they would orient themselves towards 'what works' rather than cast themselves in dogma.

But as time goes by Osborne's points scoring has caught up with him. Jabs to defeat Ed Miliband threaten to end up knocking out his own leadership ambitions. Ring fencing pensions has hemmed in a Chancellor who, after imposing so many self-constraining rules, seems to barely remember what sort of welfare state he is trying to get to.

In May 2015 the Conservative Party had a historic opportunity to tie up the British electoral map for a generation. Thanks to Labour's present malaise, they remain strong favourites with the bookies for 2020. But for a man obsessed by political manoeuvring George Osborne has utterly blundered his way through the last six months. Corbyn is probably already priced in with some voters as overly dogmatic, but that may now be true of Osborne too.

A one nation government should be about moderation, carefully thought through policy which does not over-burden one strata of society, and tacking to the centre. There is much in that would describe many historic Conservatives from Macmillan to Heseltine, and who knows, perhaps Stephen Crabb will seek to lay claim to that territory. At present, however, it does not describe the Chancellor or the course the government has taken since the summer budget.