James Forsyth

Why the tax credit cuts had to go

Why the tax credit cuts had to go
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In the peroration of his statement today, George Osborne declared that the Tories were ‘the mainstream representatives of the working people of Britain.’ This is how he wants to position the Tories and it is why the tax credit changes had to go: they were getting in the way of the Tory attempt to rebrand themselves as the workers’ party.

By ditching the tax credit changes, the Tories can now return to this theme—and can try and gain maximum political benefit from the national living wage. Osborne believes that with Jeremy Corbyn / John McDonnell leading the Labour party, the Tories have a real opportunity to pick up support from low income voters who wouldn’t normally have thought of voting for the Tories.

Police cuts were taken off the table because they threatened the Tory attempt to portray themselves as the security party. Now, with the defence budget running at 2% of GDP, the police budget protected and more money for the intelligence services, the Tories can claim that they are the party you can trust with the nation’s security while the Labour leader would like to abolish the army, wouldn’t have killed Mohammed Emwazi with a drone and isn’t sure what he thinks about the police shooting to kill terrorists.

Osborne also wants to portray the Tories as the party of aspiration, the party that will help people own their own home. That is why he announced a government backed scheme to build 400,000 affordable homes and slapped a higher level of stamp duty on those buying second homes or to let. Then, there is his Northern Powerhouse which received more money for infrastructure and science in today’s statement.

Now, the risk in what Osborne did today was that it was all predicated on the Office for Budget Responsibility upgrading its forecasts. If these forecasts turn out to have been over-optimistic, then Osborne will have to course correct. But what is quite clear is that Osborne intends to try and position the Tories in the centre of British politics. He wants to ensure that whoever succeeds Corbyn as Labour leader, doesn’t have any political space there to move into.