George osborne

Far more heat than light generated by this afternoon's urgent question on welfare spending – but a telling spectacle nonetheless. The question had been put forward by a dissenting Lib Dem voice, Bob Russell, and it was up to George Osborne to answer it. He did so with sweeping observations, and attacks on Labour, rather than specifics. And so we never really got into the small print of those £4 billion extra benefit cuts, but Osborne did wonder why Labour have never apologised for "leaving the country with the worst public finances in its history." It was knockabout stuff.   This is not to say that Osborne was ineffective. In party political terms, he had a message – and he pushed it as far as he could.

The Observer has received letters revealing that George Osborne plans to deliver net savings of ‘at least £2.5bn’ from the Employment Support Allowance by limiting the amount of time people can spend claiming it. Here is Osborne’s letter to IDS, Cameron and Clegg: ‘Given the pressure on overall public spending in the coming period, we will need to continue developing further options to reform the benefits as part of the spending review process in order to deliver further savings, greater simplicity and stronger work incentives.

Now this should dispel any worries that the Office for Budget Responsibility is partisan in the government's favour. Robert Chote, director of the Institute for Fiscal Studies and scourge of Osborne's "regressive" Budget, has been appointed as the body's new chief. It is, in many repsects, the most sensible and obvious choice. Not only is Chote respected across the political divide, but the OBR is an attempt to institutionalise the kind of fiscal oversight that his IFS has provided for years. I can't imagine that the Treasury Select Committee will try to block this appointment. In case you missed it first time around, Fraser interviewed Chote for the magazine back in June.

Amid all the feverish commotion about cuts, it's easy to forget that it took the Tories until November 2008 to ditch Labour's spending plans - and, indeed, that it was barely a year ago when George Osborne first mentioned the c-word in public. Even David Cameron admits that this delay was his biggest mistake. It weakened his party's claim to foresight, and gave them less time to embed a new narrative about the economy before the election. So it's noteworthy that Alistair Darling exhumed this mistake on the airwaves earlier, telling the Beeb that "the Tories supported [our spending plans] until the end of 2008." This may sound like a cheap shot at Cameron and Osborne, but I expect we'll hear more of it in coming months.

If there's one observation to make about Ed Balls's speech this morning it's that it's punchy stuff. His main point is that the coalition are "growth deniers" – not only do their "austerity and cuts" risk a slide back into recession, but they're also unnecessary. He explains: Attlee didn't make his "first priority ... to reduce the debts built up during second world war," and he left us with the welfare state – so why should we cut spending now? Et cetera, et cetera. These are, more or less, all arguments that we've heard from Balls before. But this is definitely the most concentrated form they have ever taken. It's an unrelenting barrage of Brownite economics. As always with Balls, there are exaggerations, inconsistencies and half-truths aplenty.

Has Mark Hoban just become the first victim of the New Labour landmines? He was asked on the Today Programme whether the Treasury had conducted a formal study assessing the impact of the cuts on ethnic minorities. Hoban was speechless - as well you might be. But the assessment, he was told, is required under Harriet Harman's Equalities Act. Has it been carried out? He avoided the question and was asked it again. And so it continued, a la Paxman v Howard. When Labour retreated, it sewed several landmines in the political territory it was about to cede. One of them was Harman's Equalities Act, which - as Pete blogged a while ago - mandates government "to consider how decisions might help to reduce inequalities associated with socio-economic disadvantage".

In the coalition, it is the rows within parties not between them that are most vicious. This is because in an internal party argument there is all sorts of emotional baggage involved. So it is two Tories, IDS and Osborne, who have provided the most spectacular row of the coalition so far. But it is worth noting that, as Tim said on Sunday, a truce has been reached between the two men and the contours of a deal agreed. It is also my understanding that both sides have put a stop to any briefing that could be considered as negative.   A deal on welfare reform looks more far more likely now than it did six weeks ago.

George Osborne has been quiet these past few weeks, tussling with ministers desperate to preserve some of their budget from his spending review. Today though, Osborne will emerge from the Treasury's recesses to launch a political attack on the ‘deficit denying’ opposition. Come on, Osborne will ask Darling et al, where are these £44bn of cuts you planned?   And answer comes there none, not even an incredible one. Labour’s refusal to countenance a spending review in government means it has very little to offer the spending debate in opposition.

As Pete notes, Nick Clegg is moderating the debate over the spending review in David Cameron’s absence. It’s an unenviable task. IDS and Liam Fox have been the most cussed opponents of George Osborne, but all ministers are fighting for their budgets behind the scenes. This morning, reports suggest that Chris Huhne could break from the ranks of the silent. The Times gives details of ‘intense discussions’ over the future of nuclear clean-up and renewable energy funding, worth more than £2bn of the Energy department’s £3.4bn budget. Obviously, any reductions in environmentally friendly initiatives carry a political cost for the Liberal Democrats.

If Iain Duncan-Smith resigned from the government, the coalition would be in trouble. If Vince Cable is the coalition’s left tent peg, IDS is the right one: his departure would leave the coalition’s right side dangerously open to the elements. Which prompts me to oppose Ben Brogan’s blog saying that the coalition would not suffer much if IDS walked. If IDS left, the Cabinet would be dangerously unbalanced. There would, in these circumstances, be only two people in it who the Tory parliamentary party considers to be on the right, Liam Fox and Owen Patterson. The right, as the Liberal Democrats seem to appreciate, would in these circumstances demand far more policy concessions from Cameron in return for its support.