Events | 2010.06.14
A tough new era can't start by dodging tough questions | Martin Kettle
As long as all parties fail to speak frankly about the economic crisis, few long-term, balanced solutions will be found
Call it the Myners strike. Labour\'s former city minister Paul Myners, who is an ex-chairman of the Guardian group, was widely praised on the right this week for an arresting admission in the Lords . There was nothing progressive, said Myners, about a government – like his own – which consistently spent more than it raised in taxes and which thus dumped liabilities on future generations. Absolutely right, agreed David Cameron at prime minister\'s questions , adding that it was a pity Myners hadn\'t said the same thing when he had a chance to do something about it.
But it wasn\'t just Myners on the left who had been selective in his truth-telling about Britain\'s fiscal predicament. It was also those on the right. Read on in what Myners said and you find plenty of equally frank talk about the economy that offers no easy debating points to the right. On the contrary. Instead, you find Myners issuing a bleak warning about UK growth and thus of the capacity of renewed economic activity to help to pay down the deficit. "Where are the sources of growth in the economy over the next 12 months?" he asked. No minister rose to answer.
With few sources of growth, large cuts in public spending, and a widely predicted downturn in consumer expenditure, the imminent danger for the economy is of a sharp rise in unemployment just at a time when a cost-cutting government can ill afford it. Right on cue, the Chartered Institute of Personnel and Development warned yesterday of 750,000 lost public sector jobs over the next five years and of an unemployment level of close to 3 million for most of the current parliament. We may indeed be all in this together – but as always, some are in it much more than others.
Be honest with the public, pleads the Adam Smith Institute\'s Eamonn Butler in his recently published 10 proposals to beat the deficit. Who could disagree? But cutting the deficit hurts – and so, it seems, does talking truthfully about cuts. All three main parties dissembled about these subjects throughout the general election. Cuts and taxes? Not in front of the voters. The informal conspiracy of silence suited everyone. Over the years, Gordon Brown\'s paranoia reduced Labour\'s capacity to debate economic choices to something close to the Chinese Communist party\'s capacity to debate political freedom. But the Tory party was as bad in its own way. The fear of frightening the voters this spring meant that the right\'s existential debate about public spending in the era of mounting sovereign debt crisis was never properly resolved before 6 May.
That failure now stalks the coalition government\'s progress towards the all-defining political events of the coming year – June\'s emergency budget and the autumn spending review. Are we all in this together, doing our best to preserve our way of life through a difficult time? Or is the age of austerity desirable in itself, an opportunity to shake the state off the backs of individuals, enterprises and communities? Sometimes ministers swing one way. Sometimes the other. The coalition, like the parties that form it, gives out mixed signals.
Mixed signals might in fact be quite smart – or at any rate manageable – if they represented a shared recognition that these are complex matters and that no course is without its price. On his best days, Cameron succeeds in conveying the choices more in sorrow than in anger. So, for the moment, does David Willetts when confronting the financial dilemmas facing universities. Increasingly, however, the coalition seems to be succumbing to the temptation to present the fiscal-tightening as inherently virtuous, framing austerity as a redemptive liberal act even while the shadow of recent Tory history ensures it appears to others as merely Thatcherite.
As ever, the left\'s besetting weakness is a reluctance to talk truthfully about the case for cuts and where they ought best – or least worst – to fall in order to bring the deficit under control. This is a strategic inability as well as a tactical reluctance. As Myners illustrates, Labour lacks an intellectually coherent framework for identifying bad or unnecessary spending. It may still be early days in the leadership contest but the general silence among the candidates on such matters is a hostage to fortune.
Where is the Labour debate about whether universal benefits to the over-60s can be justified in an era in which the retirement age is set to rise to 66 and above? Where is the debate about means-tested co-payment in health and higher education? Where, most sensitive of all, is the debate about personal taxation levels? A reasoned case for budgetary caution and a balanced approach to fiscal tightening ought to be at the heart of Labour\'s current pitch. Alistair Darling continues to make it quietly but it does not resonate.
Yet the right has a besetting weakness of its own, and it is every bit as inhibiting. The Conservatives still remain caught between the twin legacies of Ted Heath\'s liberal statism and Margaret Thatcher\'s possessive individualism – both of them formed by the 1930s. Several of the Tory contests for select committee chairs this week symbolically reflect that continuing argument. So does the emblematic battle for George Osborne\'s ear over capital gains tax.
It is worth remembering that the proportion of public spending to GDP was higher in the first five years of Thatcher\'s premiership than under Brown – every era is too easily caricatured in some way – but even so there is no mistaking that the battle over Osborne\'s budget has deep Tory roots. Logically, as Butler and the free-market right say, there is no reason why any budget should be ringfenced; to keep the largest item on the public books, the health service, off limits does perverse damage to all the lesser departmental budgets. But Butler is an ideological health privatiser and Cameron is a leader who fears that there is no quicker way for the Tories to lose power than to be on the wrong side of the NHS argument.
Overshadowing all this are the overarching political constraints of the times. In a society that is more wealthy than ever, the majority reluctance to pay higher personal taxes for high-quality, universal public services is not just a passing frustration but, for the foreseeable future, a continuing political reality – and not just in Britain, as events in Germany and the Netherlands are showing.
Friend and foe will present the Osborne budget as the start of a new tough era. The truth is that it will provide few long-term balanced solutions to any of the big strategic questions that no political tradition in Britain seems capable of confronting with candour.
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