“NOW this is not the end. It is not even the beginning of the end. But it is, perhaps, the end ofthe beginning.” Churchill's genius for spin, after El Alamein had delivered the first big Britishvictory of the second world war, is illustrated by how little-remembered are the modest claimshe went on to make for that triumph. “Henceforth,” he continued, “Hitler's Nazis will meetequally well-armed, and perhaps better-armed, troops.” That was a weaselly fudge if everBagehot heard one.
George Osborne faced a similarly daunting exercise in expectations management whendelivering his fifth budget on March 19th. Wan with nerves, the chancellor of the exchequerwas able to announce to Parliament the best economic figures in five years of faltering growth,falling living standards and painful spending cuts. The economy is growing faster than in anyother large rich country. It is creating record numbers of jobs: for the first time in threedecades Britain's employment rate is higher than America's. The budget deficit is edgingdownwards. The difficulty for the chancellor was that, having been for so long denied, peoplewant jam, which he was bound to refuse them. The deficit, at around £108 billion ($179 billion)this year, or 6.6% of GDP, is too large to support the tax cuts that many of his Conservativecolleagues are demanding. But, while bound to disappoint, Mr Osborne needed to avoidseeming so cautious as to crush confidence in the recovery and his own stewardship of it.His task was to celebrate and reassure, yet give away almost nothing.
He managed that, first by reminding Britons of the state they were in when the Tory-ledcoalition took over in 2010. The economy had suffered the deepest recession of modern timesand seen the world's biggest bank bail-out. The government was borrowing a quarter of whatit spent. That history lesson done with, Mr Osborne began to relax, and a dab of colourreturned to his pallid cheeks. Britain was recovering from these horrors, he said, because of itsadherence to “the plan”.
He referred to a raft of spending cuts, tax increases and pro-business gestures designed witha view to restoring the public finances to surplus by 2018. That target is, in fact, less fixedthan Mr Osborne implies. It was pushed back several times while the economy languished: thedeficit was originally to have been closed before next year's general election. The plan is, inshort, little more than an expression of the chancellor's own shifting economic judgment.
No matter. The recovery, and his political rivals' failure to predict it, has enshrined the plan assacred and inflexible. This is a mark of the political capital Mr Osborne is now drawing on, evenas he admitted the economy's many remaining weaknesses. His Labour Party rival, the shadowchancellor Ed Balls, who chuntered grudgingly throughout the budget speech, appears tohave been outdone. So have Mr Osborne's many erstwhile Tory critics. The apparentlydaunting task of arguing that the economy is stronger yet still too weak for giveaways turnedout to be a cinch. The chancellor was triumphant.
That patently owes as much to crafty politics as to economics, and Mr Osborne showed plentymore in his speech. It was less weaselly than stoat-like—a whirligig of policies and pledges thatappeared more fascinating than substantial. They included several previously flagged trapsfor Labour. Legislation to cap the welfare bill—a popular idea, tricky for Labour, and of onlytoken importance to the cost of welfare—is to be introduced to Parliament next week.Announcing some money for next year's 800th anniversary of the Magna Carta, the chancelloreven found the opportunity to invite comparison between the medieval monarch ithumbled, King John, and another brother-betrayer, Labour's leader Ed Miliband. It was one ofthe better budget gags.
The chancellor's more substantial offers appeared similarly designed to outfox his rivals. Byraising the income tax threshold to £10,500, Mr Osborne will hope to woo aspirational lowearners, a group that currently votes, if at all, for anyone except the Tories. By giving retireesmore say over their pension pots, a more ambitious ploy, he must hope to stanch theseepage of silver-haired Tory voters to the UK Independence Party, which has no economicpolicy to speak of. To give the chancellor his due, pulling out a surprise liberal reform of thiskind seemed also a sensible way to negate the unrealistic demands for a splurge.
And there is an important truth in that. Though Mr Osborne's trickery is always evident, so,increasingly, is the seriousness of his purpose. For all his feints, traps and compromises, thechancellor has so far stripped the public sector of 600,000 jobs, capped welfare and overseen,in a downturn, historic growth in private-sector employment. He has cut business taxes,thereby persuading employers to accept a rise in the minimum wage.
It is reasonable to argue about whether Mr Osborne's measures have been just. Next year'selection campaign will accordingly pit the Tory claim to have managed the economy wellagainst Labour's aspiration to manage it more fairly. But no one should doubt the clarity ofthe vision that is driving the Conservative chancellor. Whereas David Cameron, the primeminister, promised to change Britain, with a fuzzy idea of volunteerism, Mr Osborne is actuallychanging it.
His ambition is to make a more industrious society, less blighted by the entitlement culturethat blossomed under Labour. Even after the deficit is no more, the chancellor believes, publicspending should be held down. Again, his motives appear partly self-interested. Mr Osborneharbours leadership ambitions, and his ideas are finding more favour with the right of his partythan Mr Cameron enjoys. The beneficiaries of his remodelled society might also be likelier tovote Tory. But just because the chancellor's vision is political does not necessarily make itwrong.