Coffee House

Osborne’s choice: important projects or welfare

5 August 2014

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. To be fair to Osborne, he and allies have been pushing for a liberalisation of planning laws that would help with this, but without as much success as they’d hoped.

But Osborne’s interview today tells us two important things about the 2015 election campaign. The first is that the Tories are going to have a jolly good go at targeting the parts of the electoral map that are no longer their heartlands, rather than fighting a South-East focused campaign. The second is that increasingly we will hear these binary choices between welfare and Important Projects, even if they’re not quite fair or accurate. The problem for Labour is that complaining that such contrasts are not fair or accurate falls on deaf ears: the reason George Osborne is presenting the choice in this way is that it is very popular with voters.

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Show comments
  • Kooljeff

    Osborne going on about Social Security benefits (Welfare is an American word true Brits do not ever use) when he is one of the biggest scroungers going, claiming for his paddock on his tax-payer funded expenses for example. Benefits have nothing to do with not implementing projects in the North. The Tories hate the North, hate the people of the North and couldn’t give a toss if they lived or died. And there is more to the North than Manchester, Birmingham and Leeds. What about Newcastle, Middlesborough and the North West? All starved of investment and hope by this posh elite. The same elite that sent thousands of northerners to die needlessly in WW1. They haven’t changed and never will.

  • andagain

    “To be fair to Osborne, he and allies have been pushing for a liberalisation of planning laws that would help with this, but without as much success as they’d hoped.”

    Well, he may be the only member of a right-of-centre party in this country who thinks that people should ever be allowed to build a house with their own money, on their own property.

  • MrsDBliss

    “but spend money on welfare or do something about the shortage of housing that is driving up the bill. ”
    I’m sorry that’s not quite accurate is it? After all in the north the housing shortage isn’t as great as in the south. The huge housing bill as a result of unemployment – where the state then pays housing benefit – and low wages – where the state tops up your income to pay housing benefit.
    It’s welfare that’s the issue and the dependency trap. If benefits like these were removed there would be rioting on the streets to challenge low wages in this country.

    • GraveDave

      Yeah, and how many of these landlords are MPs who have bought to let?
      Parasitical scum.

      • Kooljeff

        25% of Tory MPs are private landlords.

    • Kooljeff

      No the issue is employers paying poverty wages. Private landlords are the real scroungers. The government subsidises poverty wages through Housing Benefit which goes into the pockets of their Rachman-like friends. The majority of people on HB are IN work.

      • MrsDBliss

        Hence my statement about unemployment AND low wages, where the state tops up.
        I take your point about housing rents; would they be as high without HB? If people couldn’t pay it would have to come down. It’s like givernment assistance for people buying houses, just supporting a house of cards.

  • Lady Magdalene

    They’ve already de-restricted Planning and in consequence, Developers are proposing to concrete over the SE Green Belt.
    That is going to have little or no effect on cutting the housing benefit bill. It’s the north which needs the investment, but it’s the south that will get the housing.
    But anyway, both lack of housing and an increasingly welfare bill are the result of mass immigration of POVERTY. We can’t build our way out of a population crisis caused by uncontrollable immigration and we can control our welfare budget all the time the EU governs this country.

    • Kooljeff

      I was going to agree with you until I got to your final two sentences. Far Right propaganda and prejudice devoid of facts or evidence.

  • Fraser Bailey

    The Tories have spend over 30 years systematically alienating the people of northern England. To think that they can drum up some electoral gains there in a few months with a few patronising visits and promises of infrastructure just shows how stupid our politicians are.

  • dado_trunking

    The Northern Powerhouse plans are over ten years old, what’s Gidiot got to do with it? Ta da!

    • GraveDave

      Yes, let’s be honest, a lot of their so called reforms are just leftovers from the New Labour administration.

  • Alexsandr

    well you mention housing and welfare without mentioning the elephant in the room -immigration.
    There is no doubt immigration has pushed up the welfare bill. Not only are immigrants on tax credits because they ar eon low wages but we are also paying out of work benefits to non immigrants who might well have got a job were it not for immigration.
    and you mention housing. So what caused the housing shortage. Well its immigration again.

    Sorry Isabel. Its really not good enough to do these subjects and not mention the major factor.

    However, the trans pennine upgrade is right on the money. Not a massive high speed project but more capacity and speed on the existing routes (routes because there are 4 major trans pennine arteries) And it should be first in the queue ahead of HS2.
    Trans Pennine serves more than the major cities of Manchester and Leeds. The infrastructure serves Staylebridge, Rochdale, The Calder valley, Burnley, Blackburn, Huddersfield, Bradford, Halifax, Sheffield etc. Leeds – Manchester is only a small part of the market.

    • GraveDave

      Nah – nah -It’s all White Dee’s fault. Then there’s that Bad Back Bill and his mate down the road, Charley Chav. So how dare you blame any of it on the odd seven and a half million new people who only come here for a better life.

    • Kooljeff

      blah blah it’s all immigrants fault blah blah casual racism blah blah got facts totally wrong, just repeated ideology and prejudice blah blah.

      The major factor on housing is not immigration but the failure to build both social housing and houses to buy. Immigration has NOT pushed up the Social Security bill (Welfare is an ugly Americanism, used by Ugly Tea-Party types). That canard was laid to rest by the DWPs own figures and several Right-Wing think tanks. IDS was also reprimanded for misrepresenting statistics (he was caught LYING again) and you swallow the lies hook line and sinker.

  • YahYah

    “The suggestion here is that the welfare bill is preventing other important projects”

    I think he’s actually talking about the real economic return here, the difference between investing in infrastructure that creates jobs and reduces the unemployment rate rather than making welfare payments to inactive individuals who are doing nothing to increase actual economic output. It’s all part of his Keynesian charm offensive, which is interesting.

    We’re all Keynesians now, don’t you know?

  • Blindsideflanker

    You don’t need a clearer example of the England, what England? than in the Today program broadcast this morning, where we got the British established parties offering Scotland tax raising powers, but no question about the constitutional effects this has on the rest of the country, they then go seamlessly onto talking about some Northern body Osborne is trying to create.

    If Scotland gets all these tax raising powers will any of the British MPs squatting in English constituency seats stir themselves and challenge the constitutional obscenity of this, where Scots get to set their own tax rates then meddle in the level English people get? When Scots get all this fiscal independence, can a Scottish MP be a Chancellor?

    Will anybody in the MSM ask any of these questions?

    • Peter Sheridan

      There is virtually no public support for the English Democrats. That’s why

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