A Budget for One Nation?

We want to believe there was little that the Lib Dems forced David Cameron to do that he did not want to do anyway

The first big test for David Cameron’s majority government is now set for 8 July: George Osborne’s second Budget this year and the first that does not have to be negotiated with the Liberal Democrats. That sets up a paradox. For the past five years, Nick Clegg claimed to be a restraining, centrist influence on the mean, right-wing instincts of the Conservative Party. Now that restraint has been removed, but Mr Cameron presented himself on the Friday after the election as leading a compassionate, One Nation Tory government. So it will be in this Budget that we shall see what he meant.

A genuinely One Nation government might, say, recognise that compassionate welfare reform cannot be done on the cheap and that the target of saving £12bn a year from non-pensioner benefits might be too ambitious. A genuinely One Nation government might realise that the windy rhetoric of the Northern Powerhouse needs to be backed up by considered, concerted action to promote the growth of cities outside London.

On the first point, early indications are not promising. The reappointment of Iain Duncan Smith as Secretary of State for Work and Pensions may show admirable loyalty, and greater continuity in ministerial office may be a good idea in theory, but this appointment in particular makes it harder to adjust policy to soften the blow of cuts to come.

On the second matter, the outlook is more promising. The Chancellor, who does at least represent a northern seat, seems to have undergone something of a genuine conversion in recent years to the idea of government action to stimulate growth in the North. Indeed, his enthusiasm for the devolution of power to a directly elected mayor of Greater Manchester may even prompt one of the Government’s first rebellions, as we report today. Graham Brady, the chairman of the 1922 Committee of Conservative backbenchers, is unhappy about the plan. He has a point. The story of elected mayors, apart from Ken Livingstone versus Boris Johnson, is not a happy one – witness the disqualification of Lutfur Rahman, mayor of Tower Hamlets in east London, for electoral fraud.

Yet the impulse to bold measures to change the governance of northern cities and to improve the infrastructure is the right one. The problem, as Hamish McRae writes, is that 30 years of government attempts to narrow the North-South divide have been ineffective or counter-productive. The Independent on Sunday opposes the HS2 rail link because we believe that, far from bringing North and South closer together, it will increase the gravitational pull of the South-east economy. We have argued that the north of England needs better east-west transport links, and Mr Osborne has accepted that – although in addition to HS2, rather than instead of it.

We would also rather see Birmingham International airport expanded than new runways at Heathrow or Gatwick. And we agree with Andrew Adonis, who was the driving force behind HS2 as transport secretary in the last government but one, that the Upper House of Parliament – democratically reformed, of course – should be located in the North, say Leeds or York.

Beyond that, as McRae says, the policies most likely to succeed are those that reinforce existing success in the North, such as universities, the creative industries, financial services, sport and high-end manufacturing.

As we said immediately after the election, we want to believe that Mr Cameron really regards himself as a One Nation Tory, and that there was little that the Lib Dems forced him to do that he did not want to do anyway. As Joss Garman writes, his claim to greenness is better than many people think. But the Budget in seven weeks’ time will be the moment of truth.