On the internet today, in Britain at least, it is impossible to avoid comment about Economic Secretary Chloe Smith’s disastrous attempted defence in Newsnight last night of the Government’s decision not to implement a 3p per litre increase in fuel duty, due this autumn. The consensus is that she was utterly shredded by Jeremy Paxman, and completely failed to defend the tax change.
I’ve commented before on the unravelling of George Osborne’s budget proposals – drawing on my experience of working on Budget vehicle tax proposals in my Civil Service days. Responding to Tory MP Douglas Carswell’s claims that the Civil Service had got hold of the Budget process, I concluded that that Budget process was so political that this was unlikely. Since then I’ve seen a blog post by former Treasury official and adviser (and former colleague on a couple of Budgets) Damian McBride, whose explanation is closer to Carswell’s; that the politicians had lost their grip. On the basis of yesterday’s events I conclude that Damian’s thoughts were rather closer to the mark than mine originally were.
What was obvious from that interview was that Chloe Smith was appallingly badly briefed – something that suggests that the Treasury machine was caught badly on the hop. The inability to specify beyond a vague reference to Departmental underspends where the money was coming from was an extraordinarily basic error; it’s difficult to believe that the Treasury machine, used to defending hard decisions and with a deeply-ingrained horror of unfunded commitments, could have swallowed that one. That in turn suggests that this decision was a last minute political caving-in to a populist campaign run by the Murdoch media. As late as lunchtime yesterday, according to Newsnight’s Paul Mason, the Conservative line was to rubbish the deferral of the tax rise as opportunism.
The politics surrounding this decision are strange. Labour chose to make this issue a point of attack, doubtless influenced by their old friends at the Sun. It’s odd because the recent falls in fuel prices have made the policy easier to defend; but in any event a cut in a tax which is overwhelmingly paid by the better-off (fuel use is closely linked to income) at the expense of spending on services which are more likely to be used by those on lower incomes is a curious position for Labour to take (even if it’s far from atypical – all of a piece, for example, with Labour’s backing for a council-tax freeze in Brighton at the expense of services). And in real terms this is a tax cut – as Paxman pointed out repeatedly in the interview, if the Government is serious about deficit reduction, what business has it doing this?
And, yet again, a high-profile Budget measure is abandoned – this one at considerably greater cost than the others. I cannot think of any precedent for a Budget that has been so completely shambolic. If a Labour Chancellor had done this, you can only imagine the headlines.
The answer surely lies with Osborne, and the way in which he embodies what looks like the defining characteristic of this Government – that it wants to do politics, not government. In a week when we have seen Cameron speculating in a wholly evidence-free way about ending housing benefit for the under-25s, based on a narrative which posits the hard-working against those on benefits when he knows that the vast majority of those receiving that benefit are in work, this is one more example of the bigger omnishambles at the heart of the coalition; the abandonment of evidence in favour of ideological narrative. Labour Chancellors like Gordon Brown and Alistair Darling – and indeed old-style Tory Chancellors like Kenneth Clarke – knew that the detail mattered. Osborne, who substitutes arrogance and entitlement for intellect and application, appears incapable of understanding this.
At the heart of all this is a simple question. In the midst of the worst economic crisis in living memory, can Britain really afford a Chancellor who prefers to play at politics than getting to grips with his job?