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By Paul Goodman
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Screen shot 2013-03-11 at 11.10.17Liam Fox and George Osborne have been united for years by a mutual love of America, excellent links with the Republicans, and neo-conservative foreign policy instincts – not to mention a shared sense of humour.  After Fox left the Cabinet, word got around that the two were enjoying regular curry suppers together at the Treasury.  None the less, more than misty-eyedness when the Star-Spangled Banner is played – plus a lively interest in political strategy and a shared love of the political game – bound the two together.  Fox will have seen Osborne as part of his route back to office.  And Osborne will have seen Fox as a useful shield against attacks from the right.  I suspect the hand of the Chancellor behind rumours that the former Defence Secretary should become Chief Whip at the next reshuffle but, then again, I have a way of seeing Osborne's tentacles everywhere… 


The Treasury is insisting this morning that it saw Fox's speech beforehand, and that the Chancellor welcomes the pressure for more cuts to offset the calls for more spending, though he disagrees with calls to cut the NHS "on both political and policy grounds".  I may be mistaken, but I think I detect a certain amount of teeth-gritting here.  For while most of Fox's previous interventions have been helpful to the Government – consider his plea against ever-closer union on the eve of Cameron's EU referendum speech, which usefully presaged part of the content of that speech itself – this one is distinctly unhelpful.  An unlikely alliance of Vince Cable and Tory backbenchers are opposed ring-fencing (the Business Secretary was at it again this morning). The target of the National Union of (Conservative) Ministers, rather, is the welfare budget – in which they have the support of Iain Duncan Smith.

Cameron and Osborne will resist the pressure to cut the ring-fencing.  But what most matters to voters, surely, is schools and hospitals themselves.  So I wonder if there is room for a little creative accountancy here.  The Prime Minister himself has already raised the question of where the aid budget begins and the defence one endsSimilar ones arise about pay: should protecting the salaries of teachers or nurses really get the same spending regard as the teaching of phonics or the availability of hip transplants?  At any rate, Fox is thinking not of Cable (with whom he vehemently disagrees about the size of the state and levels of tax) but those backbenchers.  He will be looking not only for support for his ideas – the former Defence Secretary is never short of them – but for backing to get back round the Cabinet table.  It says a lot about the febrile state of the Tory party that he seems to be seeking their help rather than the Chancellor's.

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