Osborne risks battling the backbenchers

“Don’t underestimate our determination to win this argument.” That was the vow George Osborne made to the Festival of Business in Manchester earlier in September. You may be wondering which argument the Chancellor is focusing his steely determination on. Is it his old foe, the budget deficit? Is he intent on standing up and tackling, head on, the growing economic crisis in Europe? Or could it be that most serious of problems, regulating the building of houses in the countryside?

Hang on, you might be thinking – that seems nowhere near as serious. But it is indeed the government’s new planning reforms that Osborne has firmly fixed his gaze on. The reforms, which have been deeply unpopular with environmentalists, are aimed at allowing property developers to build new homes on previously reserved areas of green belt countryside.

Many countryside groups have come out against the proposals, arguing that it will threaten the existence of increasingly sparse green space. Campaigners were given a boost when many national newspapers carried stories suggesting that there were potentially thousands of sites to build homes on across the UK without the need to dig up the countryside.

Provoking the ire of pressure groups is one thing, but growing opposition from within Conservative ranks is perhaps a bigger headache for the Chancellor. Zac Goldsmith, a prominent backbench MP and former environmental activist, bought this opposition to the fore by asking the Prime Minister a series of tough questions on the proposals in the House of Commons.

There is hope for Goldsmith, with the coalition government having backed down on related arguments before. A proposed sell-off of numerous English forests was halted following similar protests from campaigners; on health, the oft-debated NHS reforms underwent major changes as a direct result of opposition from Liberal Democrat MPs. As such, it would hardly be surprising to see the government back down here too. So why is Osborne so determined to win this argument in particular?

Inevitably, there is an ideological explanation. The Conservatives are all about deregulation and a healthy dose of it would be seen as a fillip to the party faithful having spent much of their first year in office applying several layers of red tape to the financial services sector. In addition, the reforms could provide a much-needed boost to the construction industry. The sector has struggled badly since the recession and making it easier for firms to build new houses could aid a resurgence.

The question, then, is how far the government are prepared to go over what seems to be a relatively minor issue. Would the government really seek a fight with its own backbenchers for the sake of ideology, or for a dubious shot in the arm for the construction industry? Perhaps not. But it is interesting that Osborne has chosen this moment to tackle members of his own party. There are a number of controversial pieces of legislation in the offing which could be problematic for the government, and sparking a rebellious mood amongst Conservative MPs would make life even more difficult for Cameron and Co.

The day after his speech, Mr Osborne was in Poland, trying to find a way forward for the European banking system. Discussions have ranged from further bailouts of Europe’s most indebted economies, to the massive and controversial step of the UK issuing some of its debt as a new, Europe-wide ‘Eurobond’.

Any attempt by Osborne to become more heavily involved in a deepening Eurozone crisis will most likely be met with fervent opposition from the numerous Eurosceptics on the Tory backbenches. The strength of their voices could cause the government further problems – particularly if their complaints turn into votes against government legislation. Taking a strong stance on planning reform would, therefore, make it clear to any potential rebels that the government aren’t going to take opposition to their plans lightly.

A crackdown on backbenchers would represent a change in tone from a government that has had to go out of its way to appease MPs from not one, but two parties. But it is uncertain whether this more muscular approach will prove to be effective. Tory MPs know that a significant rebellion could spell serious trouble for a government with such a small parliamentary majority.

But for many Conservatives, this is an opportunity to exert some authority over a coalition which they believe is being too heavily influenced by their Liberal Democrat partners. As Chancellor, George Osborne holds a lot of power, and starting a fight over countryside planning – the most unlikely of battle grounds – might just scare potential rebels into retreat.