George Osborne delivered his Comprehensive Spending Review and Autumn Statement this week with his back to the wall, looking out from a tight political corner. Weighed down by promises made in the heat of an election and that he never expected to keep, boxed in by a fiscal charter that strips him of elbow-room, blocked by defeat in the Lords on tax credit reform; the Chancellor would need all his political cunning to engineer an escape. On the face of it, he achieved his self-imposed mission impossible – but only with the help of a dose of good luck and some sleight of hand.
The Office for Budget Responsibility rescued Osborne by upgrading their growth forecasts. Britain, they now claim, can expect very respectable growth of around 2.4% a year. This unexpected boon allowed the Government to beat something of a retreat on tax credits (delaying and softening the reforms that were shot down by Tory backbenchers and petulant peers). All that cash from the back of the sofa also meant that Osborne was spared finding a cut to replace his original plan – instead he has simply spared existing claimants. This was not a full reversal, although the Chancellor will be happy to let The Sun and others claim victory for their campaign, it is merely a detour. Politically, Osborne has squared the circle for now. He is in line with his charter, most manifesto pledges are kept and tax credit claimants are not being shoved so suddenly off a financial cliff. Job done.
But, as ever with our Chancellor, there are strategic risks buried under his tactical triumphs. If this week was tight, next year will be a real squeeze. Osborne got himself out of his corner by relying on growth forecasts that many believe to be over-confident. He dodged big-ticket cuts, aside from reductions to Whitehall budgets – savings that are notoriously difficult to realise. And so he is doubled-down with all his chips on black – if the economy doesn’t grow in line with expectations then he will be thrown completely off course.
In a way, though, none of that matters for now. Unusually, the focus of British politics is not on matters domestic but is instead fixed on the international. David Cameron’s statement on Syria has forced a political crisis to the boil on the Labour benches. It is not that Labour is united against their Leader over the Prime Minister’s determination for strikes. But the majority of the Shadow Cabinet want British bombers to join the fight. What’s more, the Parliamentary Labour Party as a whole is concerned that a free vote on the matter will make them look disunited and amateurish to the public. Corbyn is in a real bind, too, because he cannot be honest about his reasons for opposing action. While many of his backbenchers worry there is insufficient planning or that we have no real allies on the ground their Leader’s objections are altogether more theological. There are no circumstances in which Corbyn can support intervention – because he believes it to be imperialist in nature – and therefore any discussion or debate on the matter is mere theatre. This disturbing inflexibility is causing anger and dismay even amongst MPs more used to displaying unthinking loyalty.
And so George Osborne will look back on this week with a sigh of relief. The OBR and Jeremy Corbyn have ridden to his rescue – with the surreal assistance of John McDonnell and Chairman Mao – and he has performed an impressive escape. But the trap he found himself in on Wednesday was one of his own making and it still surrounds him. He has another five years of these statements to deliver, he can’t count on being so lucky every time. Aside from Diane Abbott, the people now most hopeful that the debate on Syria won’t end Jeremy Corbyn’s Leadership are the Conservative front bench. While he remains, Corbyn gives them cover.