The chancellor is for turning… thank goodness

Published by The Daily Telegraph (25th November, 2015)

The scope of the spending review was immense with a fusillade of major announcements on everything from health to housing, social care to sport. This was a big political moment, one that will play a key role shaping the state and defining the first Tory government of this century. Yet the instant headlines already focus on one key announcement: the scrapping of tax credit cuts that is being branded a major U-turn for George Osborne.

Such is the nature of our adversarial political system and aggressive media, with political rivals and columnists talking of embarrassment for the chancellor. There is no doubt the botched attempt to save £4.4bn in tax credits undermined the claims of those hailing Mr Osborne as a political genius. He also sneaked in another significant U-turn on police funding, influenced no doubt by events in Paris last week. Yet he deserves only praise for abandoning flawed ideas, rather finding fudged solutions – even if he was helped by higher tax receipts.

Of course, these kind of screeching handbrake turns are seen as something to be avoided in the slippery world of Westminster. Policy reverses tend to be viewed as signs of political impotence or bungling ineptitude, met with scornful derision from opponents and impacting disastrously on prospects. Certainly Caroline Spelman might have cause to think this, wincing internally as the chancellor joked in parliament about avoiding the forestry sell-off plan that ended her cabinet career.

Yet as any business knows, it is a better idea to pull the plug on a bad idea than to press on remorselessly. Innovation by its nature leads to mistakes and failure – and the problem with government is that it is ponderous and does not innovate enough. It would be better for Britain if there was a more pragmatic approach, accepting mistakes are made all too often – as shown in the most damning way by Anthony King and Ivor Crewe in their book The Blunders of Our Governments. Fear of losing face leads politicians into worse holes.

This macho style of politics is a poor way to make decisions and hone policies. Ironically, although the U-turn phrase in politics predates her, this obsession with resolution in the face of adversity goes back to Margaret Thatcher’s famous conference line in 1980 – ‘You turn if you want to. The Lady’s not for turning’ – when her economic policies were coming under fire. Yet there is a major difference between reversing the philosophy that underpins a government and ditching a daft policy – as she found out to her cost with the poll tax.

The reality is all governments make numerous U-turns – and we should be thankful they do. Obviously making too many at once can be an issue, as Osborne himself found out with his botched 2012 budget. But today we should celebrate his abandonment of tax credit cuts that threatened to hit so many of the wrong people and jeopardise Tory claims to be running a One Nation government. Far better to listen to critics, accept the verdict of the public and move on. Now, about that backfiring bedroom tax…

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