Philip Hammond is a cautious and loyal politician. He is not a boat rocker. This is what makes his interviews in the Telegraph and The Sun today so noteworthy. He would not have started conducting spending negotiations in public unless he felt he had to and that he had a chance of success.
Hammond tells The Sun his case is this, ‘You take half a percent out of the welfare budget, you’ve solved the problem in defence — HALF a percent. There is a body of opinion within Cabinet that believes we have to look at the welfare budget again.’
In truth, the argument about the 2015-16 spending round is not a conventional spending row: it isn’t the Ministry of Defence versus the Treasury. It is Tory ministers, who want more welfare cuts, versus Liberal Democrats who don’t. As one ministerial ally of the Chancellor reminded me this morning, George Osborne said £10 billion of welfare cuts were needed but the coalition could only find £3.75 billion of cuts hence the need for non-protected departmental budgets to fall even further. It is worth noting that the block on finding further welfare saving wasn’t Iain Duncan Smith but what the quad could agree on.
The Liberal Democrats have set themselves emphatically against any further welfare cuts .But Tory Cabinet ministers think that is the only way the sums can be made to work. Something is going to have to give.