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How much pressure is Osborne really under?

A Guardian/ICM poll out yesterday evening shows that George Osborne is the person most people believe should be moved in a cabinet reshuffle.  At the beginning of the day, a Centre for Policy Studies paper noted that it was unlikely his fiscal rules would be met. In this summer season it looks like the pressure is on.

However, in one sense Osborne was probably prepared for some unpopularity.  This is the year spending cuts really do kick in.  Some significant mid term unpopularity was to be expected.  From the Coalition's perspective, the medicine of spending cuts was always going to be difficult to digest.  The mid term point is where the pain is felt most but the benefits have yet to be fully appreciated. The Thatcher governments went through periods when they were behind in the polls and faced vigorous opposition, but then went on to win elections as sufficient numbers of voters believed their policies were better than the alternatives on offer.  On this template, the government can afford to be unpopular given it is three years from a general election.

The problem is that spending cut anger is probably not at its peak and the economy has refused to behave as Osborne predicted.  Had private sector investment picked up along with GDP growth, while voters may have been bearing the brunt of the cuts it might have been possible to argue that better times were ahead.  The situation now is that spending cuts are still being implemented but the economy is going backwards and, moreover, investment is not picking up.  Conservative ideology has led Cameron and Osborne into a faith position:  they have to hold fast despite all.  If they do not, they undermine the reason for the Coalition's existence.  Serial u-turning has raised doubts that their faith will hold, which makes things more difficult politically. Yet it would seem a very odd time to ditch a Chancellor.

So perhaps Osborne is not that worried.  But then, of course, that would be very worrying for the rest of us.
Stephen Beer, 28/08/2012

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