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Cuts with reform

Last Updated: Friday, August 13th, 2010

Because cuts are inevitably going to reshape every public service the Coalition has decided that breakneck reform is the only hope of making that reshaping work 

August is meant to be politics’ quiet month but every morning the Coalition continues to take large strides forward. We’ve had… 

(1) An announcement on restructuring the Ministry of Defence;
(2) using credit reference agencies to deliver £1bn of savings from welfare abusers;
(3) big council tax incentives for local authorities to build new homes;
(4) the launch of an initiative to make Britain the world’s fifth biggest tourism destination; and
(5) renewed signs that students might face some sort of graduate tax. 

No wonder this week’s Economist has decided that Coalition Britain has become “the West’s test-tube”, pursuing the most daring programme of economic and social reform since Thatcher started “handbagging” the nation thirty years ago. 

I don’t know what Cameron uses instead of a handbag but the Prime Minister appears to have decided that the enormous public spending cuts are inevitably going to reshape every public service and so simultaneous reform – which can normally be a great risk – actually maximises the possibility that the reshaping will be more purposeful. 

One important reforming decision taken in the last fortnight is Cameron’s decision to embrace a restructuring of the welfare system. There have been tensions between the Treasury and the Department of Work & Pensions over welfare reform but Number 10 has intervened. Downing Street has given IDS half of what he wants in terms of agreeing a ringfenced pot of money that will fund building a benefit system that rewards work (although it may not be IDS’ original design) but the DWP must simultaneously deliver big savings in the rest of its mammoth budget. 

Tim Montgomerie 

Redwood versus Hague on Europe

It’s worth noting John Redwood’s highly personalised criticism of William Hague on his blog recently. In an item headed “Time to speak for the UK, Mr Hague”, the former Conservative leadership contender named the Foreign Secretary three times in his article, saying that it’s time he “went to Brussels and tackled some of the issues which feed our sense of unfairness”. 

He criticised Hague for accepting an enlarged EU diplomatic service and more EU movement into criminal justice. The move was striking because Redwood usually finds ways of disagreeing with his colleagues without criticising them. Of course, there’s little love lost between the two men, who’ve clashed in their long careers over how best Wales should be governed, the single currency, and the leadership, contesting the same election in 1997.
But there’s far more to this matter than personalities. Redwood is a passionate Euro-sceptic. He strongly supported the plans for the repatriation of powers in the Party’s last election manifesto. I read his piece as signalling that while he believes that the loss of those proposals is worth the gain of a Conservative-led Government, a line must now be drawn. He described a recent fine on Britain for not displaying the EU flag on projects which received EU money as “the last straw”. 

Paul Goodman 




  • MP for North Somerset (formerly Woodspring) since 1992.
  • Now Defence Secretary he has also served as Shadow Health Secretary and Tory Chairman. Fox and David Willetts are very important sources of continuity around the Cabinet table; no other member of Cameron’s team having served throughout the opposition years.
  • Fox was beset by rumours about his future throughout his time as Shadow Defence Secretary – a position he held for nearly five years – but at the 2009 Tory Conference, Cameron confirmed that this leading standard bearer of the Tory Right was his preferred Defence Secretary. Fox still has critics within Cameron’s circle but the Prime Minister knows that Dr Fox is a formidable operator. Cameron, himself, has often used Fox as a political shield – enlisting him, for example to reassure the Right during the grammars-gate row and at the time of the Lisbon policy announcement when Cameron announced that there would be no post-ratification referendum.
  • It’s also true that differences between Fox and Cameron can be overstated. An article by leading Cameroon, Michael Gove in 2005 notes the significant overlaps between the positions of the then leadership rivals ( It is sometimes forgotten that Fox was the originator of the ‘Broken Society’ soundbite and a key advocate of a more compassionate conservatism. This compassionate dimension is evident in Fox’s focus on the military covenant and better care of veterans, particularly in the field of mental health.
  • George Osborne became a stronger Fox ally after the latter became his loudest and fastest defender during the Yacht-gate affair when the then Shadow Chancellor was accused of inappropriate mixing with the rich and infamous. The two men have recently seen their relationship severely tested, however, by the Chancellor’s insistence that the capital costs for Trident are fully absorbed within the MoD budget.  Fox believes Britain must have a ‘continuous-at-sea’ deterrent.
  • Fox is wrongly called a neocon. Although he was the shadow cabinet’s strongest supporter of the Iraq and Afghanistan wars he was more interested in neutralising rogue regimes than in nation building. His post-election remarks about Afghanistan being a 13th century nation reflected his scepticism about the possibility of simple transplantation of western democracies in Middle Eastern soil.
  • He remains, however, an interventionist in foreign policy. The Cabinet’s staunchest defender of Israel he supports all necessary sanctions to stop Iran becoming a nuclear power and initiating a region-wide arms race.
  • Although Fox began his time as Shadow Defence Secretary looking to buy off-the-shelf he has increasingly become an ally of the UK arms industry, seeing it as an important part of his job to help the industry flourish.  His close relationship with the regime in Saudi Arabia is part of this.
  • With IDS and Owen Paterson, Fox represents the more traditional Right around the Cabinet table. Since Nick Herbert and Chris Grayling were demoted from the top table the Right feels under-represented and Fox would be very difficult to replace.
  • Team Cameron have understandably invested heavily in Democrat Party contacts in recent years.  If America swings towards the Republicans in the next few years Fox has an unrivalled address book of GOP connections that will prove very useful.

Tim Montgomerie 


Cameron must back Osborne on cuts: “What will matter above all to Number 11 during the months to come is the stance of Number 10. David Cameron has been willing, when he thinks it’s necessary, to leave Ministers standing while the music’s playing. Crispin Blunt was hung out to dry over prison reform. So was Anne Milton over the future of nursery milk. The last incident raised a question about the spending review to come: will Cameron, having asked Ministers for big savings, back up their plans? When Ministers seek to go above the Chancellor’s head by appealing to the Prime Minister – which they will – what will happen?” More: 

The three (conservative) pathways out of poverty: “Cameron’s great task is to convince the public that the best way to tackle poverty is very different from the Labour approach. The Left sees poverty-fighting in terms of spending government money. The Big Society is struggling as an alternative narrative. Cameron’s message must be based around education, family and work. He must say in clear terms that it is every individual’s responsibility to escape poverty by acquiring a basic education, providing for his or her family and by taking work. It is government’s job to help people achieve those three things.” More: 

Transparency in local government (by Eric Pickles): “Last year, my Department and its associated bodies spent more than £650 million: more than £10 for every man, woman and child in the country. But until yesterday, if you had wanted to find out exactly how that money had been spent, you’d have had to jump through all sorts of hoops, and know your way around the Freedom of Information Act. Now, for the first time, you can go to my website (link) and see exactly what was bought, for how much, and from whom, for all procurement over £500.” More: 

Paying councils to accept new housing developments: “Housing Minister Grant Shapps has outlined his policy to provide incentives for local communities to accept planning permission for new housing developments. The New Homes Bonus will mean that central Government will match the Council Tax for new homes built for the first six years.” More: 

A mainstream conservative position on climate change? “(1) Global warming IS happening* but because of immature technologies and a lack of international will we can’t do much about it. (2) Measures to reduce our carbon footprint should be pursued but only if they achieve other objectives, particularly reducing household bills (via better energy conservation) or more security of electricity supply (by building nuclear as well as fossil fuel-powered generating capacity). (3) The priority of policymakers should be to help the third world to become richer so that they can tackle their immediate life and death challenges and also, where necessary, have the wealth to deal with extreme weather. (4) In the meantime we should ensure a level playing field between energy sources and that should involve a levelling down, not up, of subsidies..” More:

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