The Observer has news that will warm the government’s hearts. Ernst and Young have conducted a report that suggests 100,000 public sector jobs will be saved thanks to the savings made by welfare reform. The report’s other finding, a crucial one, is that the Treasury will be raking in £11bn by 2014-15.
So then, a statistical vindication for IDS’ reforms, the economic side of them at least. It also gives the government some defensive hardware ahead of tomorrow’s Chancellor’s autumn statement. Not that it really needs it. On the back of Britain’s strong economic performance in the third quarter, the Office for Budget Responsibility is expected to raise its 2010 growth forecast from 1.2 percent to 1.7 percent. This, combined with Britain’s sound credit rating, puts George Osborne is a strong position in terms of the numbers.
The coalition’s weakness is political: the words ‘fair’ and ‘progressive’ will be back for another series tomorrow. There will be those on the neo-liberal right who would argue: why not cut welfare and the extra 100,000 public sector jobs, and then use the savings to fund tax cuts. At present, the political costs of such pure radicalism are too great.
PS: In other welfare related news, the controversial housing benefit reforms are to be delayed. Tenants will now have until 2012 to find cheaper accomodation, an extra six months from the original dateline of next April. The coalition’s political weakness strikes again: Lib Dem backbenchers threatened to rebel against the proposals, to say nothing of Boris Johnson’s concerns.
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