The ghost of Iraq lingers

Thursday’s House of Commons debate on the principle of military action in Syria to relieve humanitarian suffering was notable for the distinctly conciliatory tone adopted by Prime Minister David Cameron. Cameron was undoubtedly in a weaker position than he had been envisaging – parliament had been reconvened early with the express aim of gaining approval for a limited intervention. The government was forced into watering down its initial motion, however, when it became clear that the opposition Labour Party would not support strikes before the UN chemical weapons team in Damascus had completed its investigation. Ed Miliband’s resistance risked embarrassment for Downing Street given the likely number of Conservative and Liberal Democrat rebels.

The scaled-down nature of the motion cannot in itself, though, explain the somewhat passive nature of Cameron’s performance at the despatch box. The PM repeatedly framed possible Syrian engagement in terms of what it wasn’t, insisting: “It is not about taking sides in the Syrian conflict, it is not about invading, it is not about regime change and it is not even about working more closely with the opposition”. He stressed that there was no “smoking gun” piece of intelligence that would unequivocally attribute blame for last week’s grotesque attacks at the door of the Assad regime. Central to these statements is the simple reality that, a decade on, the memory of the disastrous Iraq war still burns brightly in the minds of our political class – not least our commander-in-chief. As Cameron admitted, that conflict well and truly poisoned “the well of public opinion” with regard to foreign military intervention.

The Iraq ghost has had a leading role to play in several contributing factors that consigned the government to defeat on Thursday night’s motion. As Cameron spoke the most significant word was one that was utterly avoided (indeed one which has been stripped entirely from the political lexicon) yet hung in the air nonetheless – ‘dossier’. In admitting, very openly, that no one strand of evidence could condemn Assad beyond any doubt, the PM was at pains to avoid parallels with the ‘sexed-up’ document that supposedly justified intervention in Iraq in September 2002, on the grounds of the existence of WMDs. We all know what happened there. In the event Cameron’s willingness to hit the Syrian government before the UN team had even finalised its findings – he implored MPs to make a “judgement” based on circumstances that were not 100% conclusive – came off as dubious. Ultimately, his desperation to avoid Tony Blair’s toxic Iraq legacy meant that he did a lacklustre job of pitching Syrian action.

Memories of his former party leader were also keenly felt by Miliband. His decision to demand the maximum possible legitimacy and legal cover in exchange for Labour support for intervention was an attempt to put to rest the ghost that has stubbornly encircled his party. Downing Street officials were well aware of how far this compromised their position, furiously accusing the Labour leader of playing politics and aiding the Assad regime. This opposition to the original motion, combined with the deep scepticism already felt by many MPs, paved the way for the government’s stunning defeat.

The security forces themselves have also not forgotten their implication in the Iraq conflict. The Joint Intelligence Committee analysis relied on by Cameron asserted that it was “highly likely” that the Syrian government had carried out last week’s chemical weapons attacks. However a former British intelligence official has stated that this was probably an understatement of the committee’s true belief, as a result of the manner in which the UK security community got its fingers burned by the ‘dodgy dossier’ episode. Additionally, top defence figures are said to have been doubtful of plans for a punitive missile strike on the Assad regime, describing them as naïve and childlike. These considerations may well have contributed to the slightly underwhelming nature of the intelligence report, constituting another factor in Downing Street’s parliamentary loss.

The specter of Iraq, then, heavily influenced Thursday’s events. It hung over the presentation of Cameron’s pitch, shaped the reaction of the Labour leadership and MPs of all parties, and may even have seeped its way into the workings of the Joint Intelligence Committee. Tony Blair’s actions a decade ago, and the legacy they left behind, have had the knock-on effect of weakening the current PM’s authority – it is unheard of in modern times for a UK leader to fail to get his way on foreign policy. The effect on any wider Syrian intervention will probably be minimal – the US has signalled its willingness to carry out action without the military support of its closest ally, and the French are still ramping up their rhetoric. However, after a summer spent closing the gap with an increasingly rudderless Labour opposition, the self-confessed ‘heir to Blair’ may live to rue the boldness of his political antecedent.

Alex Rickets

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The Arab Spring unravels

Contrasting yet similar situations in Syria and Egypt illustrate the risks of popular uprisings against autocratic regimes

Two and a half years ago the western world looked on as the tumultuous events of the Arab Spring unfolded and massive protests swept the Middle East nations of Tunisia, Egypt, Libya, Yemen, Syria and Bahrain. There was a definite feeling, however widely held, that a once-in-a-lifetime shift was occurring; that a stubbornly regressive part of the world was finally grasping a more representative, rights-oriented future. Fast-forward to the second half of 2013, however, and it is clear that any initial notions of a peaceful and orderly transition were naïve in the extreme. International headlines over the summer have been dominated by situations in Syria and Egypt which can be described as fundamentally different yet depressingly similar. Middle East citizens in their millions have made clear that they desire balanced and democratic societies over autocracies. It is nothing less than a tragedy that the socio-political structure of the region has led to many deaths in the pursuit of this ideal, and means that many more will die before it can at last be realised.

The vast majority of ‘Arab Spring’ deaths have occurred in Syria. In April 2011 President Bashar al-Assad reacted to demands for his resignation by employing the Syrian army to fire on protestors across the country. His brutality ensured that the uprising escalated into a civil war which to date has claimed the lives of well over 100,000 people, and displaced millions more. Russian and Iranian military support for the Assad regime has given it the upper hand in the conflict; the government has recently been accused of firing chemical weapons at thousands of its own people, killing hundreds. International reaction to these developments, meanwhile, has been muted due to the more cautious foreign policy outlook of the Obama administration in comparison to, and largely in consequence of, its predecessor. The appalling bloodshed highlights the danger of uprisings against a dictatorial establishment that has no wish to be unseated.

President Hosni Mubarak of Egypt, conversely, stepped aside at the behest of demonstrators in February 2011 comparatively willingly. Ensuing events have been anything but straightforward. In the aftermath of the revolution the Muslim Brotherhood, an Islamic political organisation, won presidential and parliamentary elections in which turnout was low. Mohamed Morsi of the Brotherhood became Egypt’s first democratically elected leader in June 2012, winning over many secularists in the absence of an organised liberal movement. What followed led to the deeply polarised Egypt that we see today. After months of government mismanagement and attempts to impose religious law on Egypt’s constitution, popular demonstrations at the end of June and beginning of July prompted an army coup. Both sides have since been unwilling to compromise: hard-line Islamists believe they have been robbed of their democratic legitimacy and demand Morsi’s reinstatement, while the interim administration’s line that Morsi activists are terrorists plotting to bring down the country has been swallowed by many. Over the last few weeks religious attacks and numbers of Muslim Brotherhood detainees have proliferated. Frantic international efforts to ease the tension came to naught when the Egyptian security forces violently cleared two demonstration camps a fortnight ago – in all likelihood over a thousand people died in that event alone.

The situation in Egypt differs from that in Syria, fairly obviously, due to the contrasting levels of success enjoyed by protestors in ousting autocratic leaders. All too similar is the tragic bloodshed in both cases. Both events demonstrate the danger of attempting democratic transitions in countries in which repressive dictatorships, and religious extremism, have lingered. Established autocratic regimes generally do not give up easily; even where they do, the unfamiliar void left behind is all the more potent in societies split along deep sectarian lines. The reality is that religion should have no role in the running of states: beliefs in religious law, which can lead to impassioned rejection of other views, do not sit well with democracy, which is dependent on compromise.

The unravelling of the Arab Spring in Syria and Egypt illustrates how the fair, balanced societies coveted by millions in the Middle East will not come easily to the region. Indeed, the recent military overthrow of Mohamed Morsi risks setting a dangerous precedent that democratically elected yet disapproved of governments can be removed at any time. This precedent would be undesirable given that the democratic process largely holds together populations and averts social unrest. More seriously still, the coup risks further alienating hard-line Islamists and stoking religious violence.

These problems, however, should not necessarily signal an end to attempts to secure progress in the Middle East. The comparative peacefulness and stability of much of the western world demonstrates that proper inclusive, representative democracy is the best way of ensuring lasting prosperity for societies. At the same time it cannot be doubted that structural issues in the Middle East have thus far rendered the shift chaotic and bloody. It is for the region’s citizens to decide whether the associated medium-term suffering is offset by their long-term goal.

Alex Rickets

Improving economic outlook is a political game-changer

In the last few weeks glorious summer weather has been buttressed by a seemingly unending supply of positive financial data. It was revealed that in the second quarter of 2013 the UK economy grew by 0.6 percent, beating previously cautious estimates. Last week, a leading industrial survey suggested that the construction sector is growing at its fastest pace for three years. On Monday another survey then suggested that the dominant services sector expanded between June and July at its quickest rate since December 2006. Tuesday heralded yet more good news: manufacturing output is estimated to be in its best shape since the end of 2010, while the heatwave has provided the retail sector with its fastest July growth for seven years. With business and consumer confidence also on the rise, economic forecasts are being hurriedly revised upwards amidst genuine optimism that the worst of the financial crisis in the UK could be over.

All of this poses a problem for Ed Miliband and the Labour Party. Particularly in times of downturn, elections are largely won and lost according to the state of the economy. Chancellor George Osborne has been steadfast in insisting that his austerity drive will turn around the UK’s financial health; Miliband, meanwhile, has attacked this approach for concentrating too hard on deficit cutting and not hard enough on growth. The same tired back-and-forth exchanges have dominated political debate over the last three years: the Conservatives claim that Labour can’t be trusted on the economy because they engineered the mess in the first place, while Labour claim that the Tory-led government’s policies have made things worse. Both sides fully appreciate that gaining the public’s trust on this issue is pivotal.

The first genuine signs of recovery have tilted the balance in favour of David Cameron’s Conservatives. For the majority of the last few months Labour’s opinion poll lead has hovered around the eight-to-ten point mark, strengthened by the widely-held perception – reinforced by spending cuts – that the Tories are nasty and out-of-touch. The gap, however, is now closing fast. Given that the Conservatives are generally better trusted with the nation’s finances, and Cameron is seen as a stronger and more decisive leader than Miliband, Tory insiders have long been confident of an economic recovery turning around their party situation. This confidence now appears to be coming to fruition.

The timing of improved data is particularly awkward for Miliband given that he has recently been backed into a corner over fiscal policy. Further spending announcements by Osborne a few weeks ago, against a backdrop of the public being more cynical towards welfare than ever before, forced Miliband into admitting that were Labour elected in 2015 he would maintain most of the Coalition’s budget cuts. Given that Miliband in the past has often railed against the austerity drive this is unfortunate. It means that Labour is being forced to change its line of attack at a time when its economic credibility has been badly hit.

With an improvement in the macroeconomic situation not yet translating into a rise in living standards, the obvious alternative for Miliband is to insist that the recovery, should it materialise, is one affecting the privileged few and not the many. Indeed, Labour is now claiming that the average worker will lose £6,600 in real terms during the Coalition’s time in government. However, this has not prevented cracks from appearing in party morale: the reality that Cameron is winning the battle on economic policy has reopened old doubts surrounding Miliband’s leadership. Geraint Davies, Labour MP for Swansea West, used an article in the Independent this week to bemoan the party’s failure “to provide a compelling case as to why Britain would be better off with Labour”. Meanwhile the party’s MP for Leeds East, George Mudie, last week claimed that it was “hesitant and confused” on the big issues.

There has never been any doubt that the economy will dominate the next election. The recent upturn in growth figures, which Osborne has always insisted he should be judged by, is a massive game-changer for the Conservatives. Should the positive news continue they can campaign with a double-pronged message stressing Labour’s past failures and their own recent successes – a potent combination. Labour, meanwhile, would be left to cling to the far weaker tactic of ignoring macroeconomic data and instead questioning the fairness of the recovery. This is open to attack given that Miliband has often berated Osborne for previously weak GDP figures. Just a few months ago the prospect seemed extremely unlikely, but a Conservative government in 2015 is by no means out of the question.

Alex Rickets

When is a coup not a coup?

One of the more logic-defying aspects of the Egyptian crisis reaches new levels of absurdity.

Most sane people would agree that the deeply disturbing situation in Egypt amounts, in effect, to a military coup. On July 3 the nation’s first democratically-elected president, Mohamed Mursi of the Muslim Brotherhood, was ousted from office by the military, purportedly acting on behalf of millions of vociferous street protesters who had grown tired of his political and economic mismanagement. Predictably, this erosion of fundamental democratic values has led to violence and bloodshed, with secular Egyptians pitted against understandably alienated Islamist factions.

The military’s role in this chaos is suspicious to put it mildly. While army chiefs are adamant that they are acting under a popular mandate, and their intervention was celebrated wildly by many demonstrators – plenty of whom too young to remember several decades of repressive military rule in Egypt – there are lingering doubts as to the purity of their intentions. The interim authorities have hastily assembled a “roadmap” theoretically leading to fresh elections next year and a return to civilian rule, but recent developments have concerned many. Mursi continues to be held under house arrest; many other Muslim Brotherhood leaders are either under confinement or the subject of arrest warrants. Confusion and likely misinformation still shroud the events of July 8, when over 50 Mursi supporters were shot dead outside an army barracks in Cairo – both sides blame each other. Most recently, army chief Abdel Fattah al-Sisi took the unusual step of openly calling for popular demonstrations, apparently to give him a mandate to confront “violence and potential terrorism”. The military has also threatened bloodshed against pro-Morsi activists resorting to violence. Whether Egypt is being returned to the dark days of authoritarian rule is arguable; whether the recent chain of events equates to a coup is surely beyond question.

Not, it would seem, if you are the US government. On Thursday the Obama administration told Congress that it does not plan to make a determination on whether a military coup has occurred in Egypt, following several weeks of high-level dithering. The problem is that under legislation dating back to the 1980s US aid must stop to “any country whose duly elected head of government is deposed by military coup d’etat or decree” or toppled in “a coup d’etat or decree in which the military plays a decisive role”. Annual Washington aid to Egypt totals around $1.55 billion, the vast majority of which goes to the military. This is not mere altruism – Egypt, with its Israeli peace treaty and control over the strategically important Suez Canal, is a vital US ally in a volatile region. When Mursi was deposed Obama faced a conundrum – acknowledge the coup and lose valuable influence in the Middle East, or deny its existence and face questions over American commitment to the democratic process.

By burying its head in the sand Washington obviously believes that it can occupy a happy medium straddling these two undesirable outcomes. In reality, however, its refusal to face up to the bleeding obvious weakens US credibility abroad. Notwithstanding the military overthrow of an elected president, government officials considered Mursi incompetent, increasingly authoritarian and are not sad to see the back of him. Above all, the episode serves as a timely reminder that Western administrations will extol the virtues of democracy where it is in their national interests to do so, and no further.

Alex Rickets

Mildly positive figures won’t arrest Apple’s downward spiral

Apple’s latest quarterly results, released on Tuesday night, lifted the American technology giant’s stock by 5 percent in after-hours trading as better-than-expected iPhone sales offset a sharp drop in underlying profits. The company said that profit fell by 22 percent in comparison with the same period last year; however sales of 31.2 million iPhones in the quarter ending in June – an increase of 20 per cent – beat market predictions and reassured investors that demand for Apple’s smartphones has not yet run dry.

In a nutshell, the figures weren’t as bad as many had feared. In recent times Apple has been dogged by suspicions that it no longer has the innovative potential of old, the Western smartphone market is saturated and it is losing ground in important emerging economies. Since September over 40% has been wiped off the value of its market capitalisation; last year it also ceded its crown as the world’s largest smartphone maker to Samsung. Against a backdrop of diminishing expectations solid iPhone sales figures were greeted largely favourably. US shipments grew by an impressive 51 percent.

It appears unlikely, however, that these mildly positive results will signal a reversal in Apple’s recent fortunes. Serious questions still remain about the company’s capability to produce exciting new models, having come up with nothing of the sort since the iPad in 2010. Strong performances by existing smartphone models in the US will not have much of an impact beyond the short-term given the general acceptance that growth potential in Western markets is slowing down. In China, where the smartphone market has yet to fill out to the same extent, Apple is losing out to Samsung and local competitors. Revenue from the Greater China area – which includes Hong Kong and Taiwan – slumped 43 percent from the previous quarter and is down 14 percent from last year. In the first quarter, Apple’s Chinese market share of 9.7 percent was well down on Samsung’s 17.7 percent. The general perception is that Samsung’s far greater variety of models and prices is better suited to the diverse Chinese market.

Beyond the iPhone, sales of Apple’s iPad underperformed market expectations. Year-on-year revenues fell 27 percent, hurt by a nine-month gap since the latest product launch. Although Apple still dominates the tablet computing market – CEO Tim Cook claimed that the iPad accounts for 84 percent of web traffic from tablets – increasing competition means that without engaging new models this side of the company’s business is also vulnerable to decline.

Cook has repeatedly insisted over the last few months that Apple has a raft of exciting new products in the pipeline. Recent trade mark applications suggest that these include a smartwatch, while there has also been speculation surrounding a foray into television and a cheaper iPhone, made of plastic rather than aluminium, to counter the company’s problems in emerging markets. It seems clear that the future technology battleground will be centred very much on China – here Apple has much ground to make up, having been outpaced by nimbler, more diverse competitors. Notwithstanding a better-than-expected quarterly report, expect the downward spiral of the former darling of the technology world to continue – unless its new launches catch the eye of consumers as the iPhone did.

Alex Rickets

Are the Conservatives recovering ground?

A recent opinion poll places the Tories level with Labour for the first time in over a year, markedly improving the chances of a Conservative majority in 2015.

The conventional wisdom over the last few months has been that Prime Minister David Cameron’s party don’t stand a chance of gaining a parliamentary majority at the next general election. A flatlining economy and lingering suspicions over the Conservatives’ perceived links to the wealthy have manifested themselves in a Labour lead of between five and ten points, depending on which poll you trust. This is despite data consistently indicating that Cameron as a leader is more popular than Ed Miliband, and that the Tories generally are more trusted on the economy.

Of late, however, the tide appears to have been turning, and this has now been backed up by the latest ICM survey for the Guardian newspaper. The poll demonstrates that, based on a sample of 1003 adults, Labour and the Tories are neck-and-neck in terms of voting intentions on 36 percentage points. This constitutes a seven-point month-on-month increase for the Conservatives; support for the Labour opposition, meanwhile, is unchanged. The big losers are UKIP, down five percentage points to 7% – a far cry from the party’s projected support only a couple of months ago. What should we make of all of this?

The first thing to note is that this apparent change in the political landscape is not attributable to a drop in support for Miliband’s party. The fact that Labour voting intentions have not altered in the last month suggests that the electorate does not care about the current trade union scandal, whereby Unite bosses stand accused of rigging Labour parliamentary candidate lists. The explanation does not lie to the left of UK politics.

Rather, it seems more likely that central to the resurgence in Conservative fortunes is the economy. Chancellor George Osborne indicated his willingness in 2010 to live or die by his economic policy – in light of the financial crisis it is the single pivotal issue on which the 2015 election will be fought. For three years, in light of weak confidence and stagnating GDP figures, this boldness seemed misguided. But green shoots are belatedly appearing – recent figures relating to consumer and business confidence, the dominant services sector and manufacturing have all been promising. While the Eurozone lurches from one near-disaster to the next, afflicted by high deficits, record unemployment levels and social unrest, UK growth forecasts have been revised upwards by national agencies and the IMF. The Conservatives have long been confident that an upturn in the UK’s fortunes will swing the opinion polls in their favour. This is with good reason – voters have been slow to forget Labour’s disastrous economic legacy, and have greater trust in the Tories’ ability to look after the nation’s finances.

The second major factor behind the Conservatives’ recovery is their repair of the right-wing vote. A few months ago, with Cameron appearing hesitant on the EU and local elections approaching (traditionally an arena for mass protest votes), UKIP were flying high in the polls, and many Tory figures worried that Nigel Farage would steal some of their politicians, much of their support and split the right. With the Lib Dems dead and buried and the left-wing vote heavily weighted in favour of Labour this could have led to a comfortable Labour majority. The story, however, is now very different. The Conservatives have been tough on welfare, restricting access to non-UK nationals in the recent spending review and rolling out their £26,000 household cap this week. They have also been tough on Europe, sponsoring a private member’s bill seeking to enshrine in law Cameron’s commitment to holding an in/out referendum in 2017. With the local elections now behind us, these factors have caused a dramatic slump in UKIP support. The Tories have regained the right of UK politics.

Although other polls continue to show a Labour lead Miliband has reasons to be worried. The fact that the ICM survey was for the Guardian newspaper – comfortably the most left-leaning UK broadsheet – means that its indication of a Conservative resurgence can be trusted. More importantly, the Tories increasingly appear to be the party most attuned to public opinion. A comfortable majority favours Cameron’s welfare cap, placing Miliband in an awkward position because traditionally his party would have firmly opposed such a concept. While Cameron has now set out his EU policy, pledging to hold a referendum after an attempted renegotiation of power balances, Miliband still appears vague and unclear on the topic. If the nation’s finances continues to improve, bringing into sharper focus the public’s economic distrust of Labour, a Conservative majority will no longer appear quite so far out of the question.

Alex Rickets

A drop in the ocean

Osborne’s spending cuts will have no impact on this country’s long-term problems.

Earlier this week Chancellor George Osborne announced the government’s spending plans for 2015-16. In other words, he detailed where and with what severity the axe is to fall in the lead-up to the next general election. He was forced to do so because of the failure of his plan to eliminate the budget deficit – the amount by which government expenditure exceeds revenue in any given financial year – by 2015. The deficit stood at around 11% of GDP when the Conservative-led Coalition gained office in 2010; at best it has been reduced by around a third. The reasoning behind this ambitious policy was fundamentally political: Osborne was hoping, entirely fruitlessly as it has turned out, to sort out the nation’s finances by the time of the election, so that he would be in a position to cut taxes and ride home at the ballot boxes on a wave of popular support. The blame for the continued sluggishness of our economy cannot be attributed solely to the Chancellor – his hands are to an extent tied when uncertainty reigns in interconnected global markets – but equally it cannot be denied that his own plan is in ruins. Poor growth and lower-than-expected tax receipts have necessitated further public spending cuts, which were announced on Wednesday.

Additional savings for 2015/16 are to the tune of some £11.5 billion. With the exception of health, education and foreign aid – which continue to be ring-fenced – all other government departments negotiated cuts of around seven to ten percent. The reality is that Osborne did not need to detail these figures now – his rationale for doing so is again political. The Labour opposition has spent three years lambasting the pace of Tory cuts, which is supposedly inhibiting growth. However the Chancellor, an excellent political strategist, knows that this is hot air. Particularly in light of public mistrust of Labour’s economic credentials, stemming back to their perceived excessive spending during the boom years, party leader Ed Miliband cannot afford to convey too heavy an anti-austerity message. Osborne has set him and his party a trap – with the Conservatives’ budget plans for the months immediately following the general election now laid out, Miliband is being forced to explain how he would do things differently, or risk appearing disingenuous. The first signs are that this trap is working – Labour have already conceded that they would not borrow more to reverse the Coalition’s cuts. This could alienate their support base. Although Labour currently enjoy a healthy lead in the polls, the fact that the Conservatives are trusted more on the economy – the key battleground of the next election – may be significant.

The context of these spending announcements, then, is essentially political. That aside, will the cuts make any difference economically-speaking? Can they inject life into our struggling financial system? With public borrowing set to continue rising until at least 2016/17, when it is currently forecast to peak at around 85% of GDP, it is clear that something is still going badly wrong. Although our growth and unemployment figures are still significantly healthier than those across much of the Eurozone, the hard reality is that we are exiting recession more slowly than ever before. It is now five years since the global financial crash, and we are still flatlining. Will the fresh spending restraints alter the situation?

Unfortunately, it is extremely unlikely. The one saving grace is that our borrowing costs as a nation are still relatively low – the global financial community has confidence in our creditworthiness, notwithstanding the recent downgrade by Moody’s. The government’s commitment to austerity has reassured markets – if not for this our budget deficit would be under even more strain. State expenditure, however, is out of control. While big-spending departments like Defence and the Home Office have been scaled back significantly over the last few years, this in itself barely scratches the surface.

There is a growing acceptance among the UK public that current welfare spending is unsustainable. While only a few years ago people were fiercely protective of the welfare state, the majority are now cynical and even think that state benefits are too generous. This has been picked up on by the Conservative-led government, which has made a number of reforms. The total cost of benefits that any household can receive has now been capped at £26,000, so that no household gets more than the average working income. Unemployment benefits have been frozen at below-inflation levels. Households where one person earns at least £45,000 can no longer receive child support. After initially railing against the unfairness of these changes, the Labour opposition has now cottoned on and realised that public settlement has shifted. It recently stated that it would not reverse the Coalition’s child benefit policy.

Against this backdrop the most interesting features of Osborne’s spending announcements are those that concern welfare expenditure. After shadow chancellor Ed Balls recently announced that Labour would end subsidised winter fuel payments for the rich elderly, the Chancellor on Wednesday stated that pensioners living in warm European countries would lose these benefits based on a ‘temperature test’. There were also signs of policies designed to placate the right-wing press and Tory rebels – non-English speaking claimants of unemployment benefits will have to attend language schools or face losing their benefits, and job seekers will have to wait seven days before they can claim.

These reforms, however, are a mere drop in the ocean. By ring-fencing the two considerations that take up the most serious share of our state budget – pensions and health – Osborne has effectively abdicated the ability to make any meaningful dent in our nation’s debt problems. The root of the issue, yet again, is political. The British people still worship the NHS and react with horror to any hint of its privatisation or scaling down – former Chancellor Nigel Lawson famously stated that it is “the nearest thing the English have to a religion”. Meanwhile, the only age demographic in which the Tories lead Labour is the over-60s – accordingly the Conservatives pledged before the last general election to ring-fence pensions spending, and will be loath to back down on their promise now. Unlike the young, the elderly unfailingly turn out to vote in great numbers – for this reason they are feared by politicians.

The result, due to a rapidly ageing population, is a ticking time bomb. While our government tinkers around the edges, the real problem area in our country’s finances – entitlement spending – is left largely untouched. Governments are reluctant to tackle this issue for the simple reason that it would be political suicide; consequently the risks are left to grow and grow. What is really needed to avoid burdening future generations is radical reform of pensions now. The state pension age needs to rise – to around 70 – far quicker than is currently being planned, and from then on needs to be indexed to life expectancy rates. This would free up far more state money for infrastructure investment and the like. Such a policy would arguably be harsh, but would reflect the reality that today’s 65-year-olds are far healthier than their counterparts several decades ago. As a nation we badly need to start living within our means, otherwise the next financial crash will dwarf the most recent one. Our government needs to do more than make minor, ultimately ineffectual changes to departmental budgets.

Alex Rickets