IDS Drives a Dagger in to the Heart of Deficit Reduction

So what to make of the resignation of Iain Duncan Smith? The former work and pensions secretary resigned on Friday evening, ostensibly as a result of the fall-out from this week’s budget, most notably the proposed reduction in personal independence payments (PIPs). Set against a further cut in corporation tax to 17% (a penny for our local politicians’ thoughts?), a cut in capital gains tax and an increase in the threshold at which the 40% tax rate is paid, the optics really didn’t look good. As a result, IDS decided enough was enough.

As has been well documented, IDS was previously happy to oversee the implementation of policies such as the welfare cap, universal credit and the bedroom tax in the name of deficit reduction. In his resignation letter IDS made clear that:

Throughout these years, because of the perilous public finances we inherited from the last Labour administration, difficult cuts have been necessary. I have found some of these cuts easier to justify than others but aware of the economic situation and determined to be a team player I have accepted their necessity.”

However, IDS now feels he can no longer sit idly by as the outworkings of deficit reduction continue to fall on those least able to carry the burden.

This very public resignation can’t be anything other than extremely damaging for the Government and their prevailing policy goal of deficit reduction. On Marr this morning IDS stated that the change to PIPs that was announced in the budget “juxtaposed as it came through in the Budget, that is deeply unfair and was perceived to be unfair. And that unfairness is damaging to the government, it’s damaging to the party and it’s actually damaging to the public.” He has therefore very publicly questioned the tactics adopted in the pursuit of deficit reduction. He even suggested that his party are targeting those that do not and will not vote Conservative when he proclaimed “it just looks like we see this as a pot of money, that it doesn’t matter because they don’t vote for us.” This statement more than any will no doubt be seized upon by Labour if – and it’s a big if – they can devise a coherent strategy to do so, particularly as many on the right of the party were happy to support many of the welfare changes.

And what about the PM and his chancellor? David Cameron will surely now face a leadership challenge following the EU referendum in June. For Osborne, who is ultimately the master of departmental spending in Whitehall and who’s politicking has ensured that it’s working age benefits that are returned to time and again to meet the targets set – the pension triple-lock, the desire for a budget surplus, the moving feast that is the welfare cap – his leadership ambitions could be dealt a serious blow. I wrote a piece last year where I suggested that Osborne’s career was on an upward trajectory, but it has clearly hit the buffers. This week alone he has seen the makings of a Tory rebellion, a policy u-turn and the resignation of a senior cabinet minister. And all this hot on the heels of his tax credit u-turn. This morning’s Sunday Times for example led with the headline “IDS attack shreds unfit Osborne’s dream of No. 10”.

Set against the backdrop of the EU referendum and tentative signs that Labour are beginning to make inroads (although one poll lead does not a summer make!), the next few weeks and months could prove very difficult for the Tory party and may yet prove the old adage correct: opposition parties don’t win elections, governments lose them.   We’re a long time off that, though!



Taking baby steps for now. Follow me on Twitter: @portrushian

  • Graham Parsons

    Can’t take anyone seriously who was happy to implement the bedroom tax.

  • Roy Reilly-Robertson

    It is becoming very clear that the highminded rhetoric and forceful delivery of his words on Marr this a.m. are there to shroud the real purpose of his actions. He can now happily have a home in the Brexit camp HQ and can look for preferment to office again if the Referendum is lost for Cameron and his brand of Tory takes over. To him it is a WinWIN situation. And of course he can hide behind his sudden embrace of ‘one nation’ Conservatism and try and appear statesmanlike. Disraeli must be spinning in his grave. Smith is really just like the rest of the Tory party now, devoid of all notions of Conservatism. None of them have any clear notion of what, if anything, they are trying to ‘conserve’ as they stamp around like demented Manchester Radicals with no notion of the damage to people’s lives that they do and cause. They want change because they have fixed notions that a ‘small’ state is the cure to all the UK’s needs and refuse to see that small states do not necessarily best meet the needs of the citizens. In the Army the commonly accepted rule was that the most dangerous thing you could have was a young officer with a map. In politics the rule would run as a politician with a plan.

  • Kevin Breslin

    People genuinely ask is ESA cuts which do stop disabled people making contributions to the state really a deficit reduction measure or simply a state reduction measure.

    There’s a big question where the line is drawn between fiscal conservatism and ideological cuts.

    I have said quite often that welfare reform could be a measure that saves money getting people back into job readiness but ad hoc welfare cuts are merely punishing the disabled for being a burden, no matter how much you spin it as attacking scroungers and spongers.

  • Old Mortality

    So everyone should have as much redundant space as they want at the expense of the state?

  • Sharpie

    Yes, those mostly empty mansions in the social housing sector offend ones sensibilities egregiously. I even heard of one chap keeping guinea fowl in the north wing of his council house.

  • Sharpie

    While the motivation for IDS doing it is one thing, the consequences are something else entirely. The “Small State” thing is curious because in the bigger picture any reforms they implement will only make it a slightly smaller state. It is the ideology of providing handouts to your own at the expense of others (mostly poor and disenfranchised) that is becoming more and more obvious and they must see it as a “well Labour did it to us now we are going to do it to them”, or something equally stupidly thought through.

  • Old Mortality

    Being facetious does not constitute an argument, Sharpie. A single person occupying a three-bedroom council house is wasting a resource which is scarce in many parts of the country.
    If I may be facetious, you would probably think it only right that the state should provide everyone with as large a house as they desire.

  • Sharpie

    Facetiousness is precisely what was called for in light of such a remark. The bedroom tax will be looked on in the same light as the Poll Tax a regressive and punitive policy on the poorest. How many single people are / were occupying three bedroomed houses?

    The problem with shoving one-size fits all solutions at complex problems is that everyone gets caught. While there is probably a problem with housing benefit fraud (such as dole drops) in the big scheme of things the country is winning nothing (except a few pounds) and losing everything including civic loyalty, well being, community cohesion. This is an ideological policy far beyond being an economic one.

    As for the idea of providing everyone with a house – actually yes I would dream of a State that aspires to everyone living in comfortable, healthy surroundings – according to their choice and means. This does not mean a council house for everyone.

    However to the contrary I am afraid we have succeeded in creating people who are vey good at proving how badly off they are in order to get more from the system. Success in benefit terms is proving you are abject.

    Only problem is – if you tell someone how useless they are every day of the week and how they deserve nothing, they will begin to believe it, and act like it.

  • Graham Parsons

    Woof woof. I love how the right obey the dog whistle with no appreciation for nuance or complexity.

  • the rich get richer

    Why are some making a “Big Story” of the resignation of a Pretty Minor Tory politician,,,,,,pfttt…he ain’t a big deal…The quiet Man that had Plenty to be Quiet about.

    And its about The EU referendum….yadaa..yadaaaa .

    These guys ain’t worried about poor people. It ain’t in their DNA.

  • Hugh Davison

    How many single people are occupying a 3-bedroom council house?
    I didn’t know there were any council houses left. Weren’t they all sold off during the Reagan/Thatcher period?