The tone surrounding the public spending debate has shifted up, or rather down, a few gears as ministers move from general direction to specific changes.
Though there remains a honeymoon feel to a lot of the coverage of the coalition, the dominant developing theme of the political narrative is the cuts now expected, and coming closer, with October 20 the date when spending decisions for this Parliament will be announced.
Any public spending round has an element of ritual to it, with spending departments seeking to defend their budgets (money means power) and specific programmes, and the Treasury (control means power) making some very tough demands, and forcing colleagues to face very tough decisions.
But this time the Treasury knife-wielding is being done with a relish that appears to have moved beyond the ritual of negotiation to a macho posturing that risks getting out of control.
This is being led by George Osborne who, even more than David Cameron, is ideologically driven by the idea that the State is more bad than good and the private sector more good than bad.
A line in today’s FT story (Whitehall winces as Osborne calls time) reveals the scale of what is being envisaged, with a few illustrative examples of the kind of thing under threat … ‘The Royal Air Force’s next generation of fast jets, the legal aid budget, skills training, the arts, prisons and business support are among the areas expected to take the biggest hit, along with more than 100,000 public sector jobs.’
What none of the calculations seem to take into account is that additional unemployment leads to an extra burden on the state, in terms of benefits paid, taxes not paid, and spending not made.
It is all a bit weird, and made possible by the recent success the Tories have had in painting the last decade of investment as a failure when in truth the improvements to schools, hospitals and other public services have come as a result of it.
Doubtless if you look hard enough, you can find waste in any budget. But the cuts now being demanded by Osborne, and even the negotiated position he will settle on, go way beyond what the challenge of the deficit requires, and have entered a return to Thatcherism, with Osbornic knobs on. The motto appears to be … All cuts good, all spending bad, consequences not to be considered.
But the consequences will be felt by every single one of us, and sooner than we might think.
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“Doubtless if you look hard enough, you can find waste in any budget”; herein lies a real problem – within almost all public spending programmes I have encountered, there is a massive amount of ‘fat’ and inefficiency. The game should be about driving out the inefficiency, innovating, delivering services differently for less. But given the public sector’s general inability – indeed, unwillingness – to be lean and efficient, I’m afraid we can’t go on like this.
What I found most worrying this week were the couple of interviews I managed to catch with the boss of the OECD. He was spouting the very philosophy and exact jargon constantly employed by Osborne and his Merrie men. He’s until now, in ordinary circles, an unknown. Since the discreditation of the OBR, the OECD seems to be being wheeled out to further frighten and panic the horses!
I worry at the seeming indecent haste of all of these Bills and their implementation. The public are having to take in so many ideas without being given a chance to debate or even just discuss them. We were told we would be consulted. Well, no-one’s asked me…. unless you count silly ‘public consultation’ websites where the only value seems to be the sheer entertainment of reading whacky ideas!
Excellent analysis, Alastair. My one reservation is ‘Thatcherism’. Thatcherism destroyed communities wholescale by attacking traditional industries with heavily unionised workforces but left large parts of the country relatively unscathed. The Tory cuts (I refuse to call it a coalition anymore, it is a Tory Government with uber-Tory policies) will hit the whole country and it will hit everyone with the pure intention of rolling back the state. This isnt Thatcherism, not even Thatcherism with Osbornic knobs on. It is beyond Thatcherism and to some extent comparisons with Thatcherism may be misleading. It is a dogmatic and reckless attack on the State as a ‘bad thing’ and has much to do with Bush-style Republicanism as anything. Calling it Thatcherism rallies people to the left of centre but doesnt necessarily bother other people, particularly those too young to remember the early 80s; but parallels with GWB, well that may well have greater resonance for many. Maybe it is too early for a new term to emerge, but emerge it surely will.
The cuts are now moving from theory to practice. The popularity of the Con-Lib government, and that of George Osborne particularly, will vanish soon.
The coalition has been overoptimistic about the economy and private sector.
Gordon Brown was right when he said that spending is investment. Here in Scandinavia we understand this well.
In Finland we think that our good competitiveness is not a cause but a consequence. A consequence of our welfare state! It is not that because we have money, we spend it on education, health and public services. It is the other way round.
Our welfare state is based on strong Scandinavian values shared by both the public and politicians.
We have a high-quality education system and able workers. We do not actually love our taxes, but we are willing to pay them because we know where the money goes.
We will preserve our model despite of the financial crisis because its foundation is strong set of values. Our centre-right government recently decided not to cut a single euro from public spending this year despite of debt and deficit. Instead, the government decided to support growth and social cohesion.
In Britain people seem to be reluctant to pay higher taxes. But you cannot have Scandinavian style services on American taxes!
British public should understand that money spent on education, health and public services is not money wasted. This investment is the basis for future growth and success.
Ps. I think that Gordon Brown made a deliberate decision during the general election campaign not to start talking about the causes of recession. In my opinion this was a mistake as Labour had little to be ashamed of. I also guess that Mr Brown was too modest a man to boast about Labour´s achievements. But as Mel Brooks has said, if you got it flaunt it! So the whole narrative during the election was wrong and allowed David Cameron to blame everything on Labour and win.
I totally agree with Ollie. If I can illustrate it with a personal example I would appreciate it. I’ve had a wonderful chance to tutor 1-1 in the school I work in, under the scheme established by the last government. It’s been a joy. For one girl it has totally changed her. We have moved to a diagnosis of a previously unnoticed condition. Her literacy skills are improving, but most of all her confidence has rocketed. Her educational aspirations are, quite simply, transformed. Is that cost of tuition an indulgent overspend? No, because the chance that girl has of success in all areas of life is transformed. Hopefully she will be able to contribute socially and finnacially to the nation so much more than just the initial cost of that tuition. And I’m sure there are many pupils who have benefited from this scheme in the same way.
Another factor in terms of public services is the effect that the withdrawel of good will is about to have. Many of my colleagues run after school clubs, plant school gardens, look after school chickens (eugh), produce school plays, provide extra tuition for free and do god knows so much more than people would believe. And that enrichment comes because of the happy(ish!) workforce. Improved pay, better buildings, more planning/assessment time makes us much more willing to give much more of our own selves. Thus again we see the benefit of “investment” as opposed to “spending”. The marriage between the Labour Government and teachers was always tetchy, but there was a mutual appreciation of shared goals and a desire to attain them.
The loss of that goodwill is very very close. My younger colleagues who can’t remember teaching under the Tories,(sadly I can), who have always had PPA time, always taught in splendid new classromms with their interactive wideboards and who were saying to me this spring “the Tories can’t be that bad…I just think it’s time for a change” are getting edgy. And that’s a story we will hear across the schools, police forces and NHS before long.
The Tories are wrong. People don’t become altruistic on demand. It happens when their own needs are met and they are free of the grind of day to day survival. Only then are they free in inovate and create in the best and most passionate ways possible for those who they want to help.
I welcome Olli’s comments and feel the whole public v private debate could be notched up by making comparisons with other countries, particularly those in Scandinavia. In the UK we remain incredibly insular when it comes to Europe, and too easily seduced by the US lower tax model. Really hope the Labour leadership contenders will be more outward looking and show that there is a different approach and that tax need not be a dirty word. Very difficult when most of the media is so hostile, but not impossible.
In fact there couldn’t be a better time to argue for a more socialist approach in Britain. Thanks to the revelations and publication of Mandelson’s memoirs, rightly or wrongly, the ethos of New Labour has been dealt a deadly blow. We shouldn’t let this completely overshadow the many achievements, but it really is time to move on. The world has changed and values need to change. Meanwhile,as Osborne’s cuts start to bite, there may be growing scepticism about the benefits of private alternatives to the state.
Olli, I do think Labour should aggressively defend its record on public spending, but also own up to its role in the deficit and why the UK has been so badly affected by the world recession. The truth is that under Blair and Brown we were far too easy on the banks and their deregulation, far too relaxed about personal debt and far too concerned to keep everyone caught up in the property boom. A cynic might think that Prudence had been jilted for electoral reasons.
And all these cuts, with the Lib-dems looking on applauding. How can any progressive Lib-dem, sit on that side of the house, and believe they are doing the right thing? It is the polar opposite to what they were saying at the general election, and makes them look like a bunch of cowards.
If they want to hold on to their seats at the next election, then they would be better served standing up for what they believe in, and stop listening to their tory leader, Nick Clegg. Clegg is practiced at lying through his teeth, and has admitted in private he believes in the cuts. Vince Cable has no credibility left in politics either, as he rolls over and offers a paw every time Osbourne walks in the room.
The problem is the Labour party know they can’t sit and say “we told you so”, as there is nothing more off-putting than a smart arse. So they have to argue for their programme of investment, and illustrate where and why that spending is necessary. They have to be more robust than any opposition in history, becuase the tail is wagging the dog at the moment. We are lumbered with an unholy alliance in power, pushing us into a death spiral, with a programme of cuts without a mandate. The majority did not vote for these cuts; they voted for smaller cuts, and not in front-line services, once the economic recovery was established. They have lied to the public, and should call another election, as soon as Labour elect a new leader, which is looking increasingly like Ed Balls.
Or if they’re so fond of referendums, why not ask the public if they want cuts or investment? But they wouldn’t dare.
I don’t really agree with Jacqui about Labour and the deficit. The total deficit 148bn is about 2/3 due to the cost of the credit crisis, bailling out the banks and supporting the economy when the tax receipts dried up.
To blame the light regulation is letting the banks off the hook really….bit like saying it is the police’s fault if someone kills a child in a car crash while using a mobile phone as we know its not a rigorously inforced law ie light touch enforcement.
The responsibility lies with those bankers who ran and traded in reckless markets. The bankers responsible have all got away with it and left us the world in effect to pick up the tab for their bad night at the casino. So like the example above they have had a slap in the wrist a few points on the licence and a token fine while the chaos is left behind with ruined lives and people, innocent people, effected.
For me the problem labour failed to address was working class male unemployment. It seems to me that Labour and Conservatives have written them off. I fear they will come to regret this in the future…..idol young men never find constructive things to do with their time.
Problem is, the Tories don’t use any public services, so they view them as wasteful, even our schools and hospitals. Very scary times!