To see the significance of IDS’s resignation we must look past the dead cat

My last post on the Budget took on the gorilla cliché. This time I want to talk about dead cats. What brings this on is the spectacular resignation of Iain Duncan Smith, popularly referred toas IDS, who had been the Work  and Pensions Secretary.

Is this a dead cat moment? The metaphor comes from election strategist Lynton Crosby, who guided the Conservatives to their spectacular election win last year. He suggested that if the news agenda goes awry, you should “throw a dead cat onto the table” to distract attention. The IDS episode has certainly done that. It has dominated the news for well over a day now, pushing out all other political stories from home and abroad.

In whose aid would the dead cat have been brought into play? That would have to be the Leave campaign in Britain’s EU referendum, and indeed much of the comment suggests that this issue lay behind the resignation. But Mr Duncan Smith says it is about the Budget, and how it juxtaposed tax for the wealthy with withdrawing allowances for the disabled.

But it is hard to see what the dead cat was meant to distract our attention from. The Budget was hardly a triumph, and was pretty neutral in the great EU debate. The Remain side wanted to claim a coup with regard to VAT on tampons, which has got tangled up in EU rules. But that’s small beer. Maybe the Remain campaign were plotting something. There is surely frustration about how easily the Leaves seem to be able to hijack the news agenda, but it was surely too early for a news coup. If it had been timed to coincide with President Obama’s future visit to the UK, then that would have been different.

Indeed Mr Duncan Smith is a particularly guileless politician. This lends him a certain charisma, which briefly took him to a disastrous period as Conservative leader, but his general lack of political and management skill is very evident.

Which leads me to think that he can be taken at face value this time, which is what Observer commentator Andrew Rawnsley suggests in what looks like an authoritative analysis. The referendum has created the general context of tension, but Mr Duncan Smith and George Osborne, the Chancellor, have been at loggerheads for many years. Mr Osborne tweaked his tail once too often.

Which means that much of the chatter about the episode being linked to the referendum is misplaced. It is very hard to know what its impact will be on that campaign. It’s effect on two other issues may be more significant.

The first is the fate of IDS’s pet project: Universal Credit (UC). This aims to replace a complex system of tax credits and benefits with a single scheme that is linked to income levels in such a way that incentives to work are not destroyed. This idea has wide political support, and it is the a centre piece of the government’s benefit reform narrative. But it is technically difficult to do because it depends on near real time data on income levels. This, incidentally, is the opposite approach to that taken by the Treasury, which prefers to focus its data gathering on a small number of better off people, rather than tangling with the sometimes chaotic lives of the less well off.

The technical challenges mean that the roll-out of UC is a long way behind schedule. It had really only been sustained by Mr Duncan Smith’s political capital. Now that is gone, surely the project will collapse? That will be a victory for the Treasury, but it will leave a hole in the heart of government policy. What will the government do next?

But there is a bigger issue for the government than even that. In my last post I pointed about how hard it will be for the government to force through further cuts in public spending, leaving the government’s financial plans dependent on a sudden, and unlikely, spurt of old-fashioned productivity (as opposed to the new-fangled sort that will leave tax revenues untouched). The government has a small majority. It needs political will, discipline and cohesion to push its fiscal plans through without breaking promises on tax. Mr Duncan Smith had shown that solidarity until now. The Conservatives will have to find a way to rebuild it after the referendum, probably under a new leader. That is now more difficult than ever.

Who might that new leader be. Mr Osborne looks to divisive. The London Mayor Boris Johnson probably lacks support within the parliamentary party, and has a credibility problem. He’ll lead the polls under the going gets serious. I would not rule out that dark horse: Theresa May.

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