Isabel Hardman Isabel Hardman

Osborne’s choice: important projects or welfare

George Osborne can’t quite help himself. Today he’s continuing his Northern charm offensive, which has been impressively choreographed. He gave a speech back in June in which he said he wanted to create a ‘Northern powerhouse’, involving cities working together. Just a few weeks later, a group of councils in the North pops up with a plan to improve transport links across the region. Ta da! But the Chancellor couldn’t quite resist, when he was asked about the merits of this plan on the Today programme, making another strategic, political move, and linking welfare spending to the debate about regenerating the North. Asked what would happen if Treasury officials argued that London transport projects would deliver more value, he said:

‘I hope we don’t have to make a choice between the two. I think the real choice in our country is actually spending money on this big economic infrastructure, transpennine rail links, Crossrail 2 in London and the like, and spending money on, for example, welfare payments which are not generating either a real economic return and at the same time, are trapping people in poverty.’

The suggestion here is that the welfare bill is preventing other important projects, that it is a weight around the neck of the economy and damaging the North. It is indeed that, although the reasons for the ballooning welfare bill are a little more complicated than Osborne suggests: with housing benefit such a big part of that bill and indeed such a big driver of that bill’s growth, the choice isn’t just spend money on welfare or spend money on important projects for economic growth, but spend money on welfare or do something about the shortage of housing that is driving up the bill.

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