This has been a bad week for George Osborne with attacks on his austerity measures coming from all sides. It has become clear that a majority of people believe that government’s economic policies are damaging the economy rather than helping, a new poll reveals, as the coalition government begins an internal war over how to stimulate growth.
George Osborne has ten days until he delivers his crucial fourth budget, and an Opinion/Observer poll shows almost three times as many voters (58%) believe the austerity drive is harming the economy as those who think it is working (20%).
The findings will add to pressure on Osborne to change course as the UK hovers on the brink of a triple-dip recession. Given Osborne’s form when it comes to changing his mind in the face of overwhelming evidence, I don’t have much hope that he’ll do what needs to be done.
The independent Office for Budget Responsibility rebutted claims by the prime minister that the government’s deficit-cutting strategy was not responsible for choking off growth, stating that austerity had knocked 1.4% off GDP in the past two years.
In the first two years of the coalition, most polls showed solid support for the government’s hard line on the spending cuts, though the Tory lead over Labour on economic competence has narrowed in recent weeks.
The stark poll findings come as home secretary Theresa May appeared to make a pitch for the leadership of the Tory party, arguing in a speech to a ConservativeHome conference that the Tories must govern for the whole country, not just sectional interests. May said: “We’re at our strongest when anyone and everyone can feel that the Conservative party is for them.” The speech, resembling a leader’s party conference delivery in its scope and tone, was seen as an attempt to raise her profile at a time when many Tories are losing faith in Cameron’s ability to remain as leader beyond the next election.
On top of this, a key plank of the chancellor’s plans to reform Britain’s banks in the wake of the financial crisis and the Libor rate-fixing scandal is “wholly inadequate”, MPs have warned as they reopened the debate on breaking up the banks.
The parliamentary commission on banking standards said the government’s proposal for the regulator, the Financial Policy Committee (FPC), to review the strength of the ringfence between high street and riskier investment banks was little more than the regulator “marking its own examination paper”. It said the government should include a specific provision to consider a full, industry-wide split-up of the banks if the ringfence was judged to be failing.
So the Tories look like they are singularly failing to do anything right when it comes to the economy. And with senior Conservatives stepping forward with not so subtle hints that they might challenge Cameron for the leadership, we might be on the brink of political civil war, where the only real losers will be the British public.