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Cutting The Deficit is Only Half the Story
By Andy | November 18, 2009
There’s no doubt that morale in the Labour Party is low and clearly it seems to me, is lower the closer you get to Westminster.
A few weeks ago I was at a small seminar in a Westminster Department. Civil Servants were excited; we were to have a pep talk from a Minister. The Minister duly appeared, announced they were standing down at the next election and later — in response to a question — described the government as facing a precipice in May. Even a ‘huge mountain to climb’ would have had some positivity about it. It certainly felt like a case of “so long and thanks for all the fish …”
It’s no surprise then that the government is seeking to use the Queen’s speech to rally the troops as the starting bell for the election race is sounded. Most notable in this speech is the way in which we are using the tactic of embedding our aims in legislation.
I’m not sure about this. It seems to me that one of the reasons behind such a lack of trust in Labour is that, since 1997, we’ve missed so many of the key targets that we have set ourselves. But that aside who can argue about enshrining the battle for equality of the combating of poverty in legislation?
What worries me most is the desire to commit future governments to reduce the deficit through a legislative commitment. Don’t get me wrong the deficit is exceptionally high and will present a problem for any government. The problem is if this is seen as a charter for vicious spending cuts, with each party trying to be seen as more macho than the others.
Huge public spending cuts will effect everyone and not just those who are the most deserving in poverty terms. As Jonathan Freedland has rightly pointed out in the Guardian the Tories want us to work harder for longer in our lives. Do we want to do the same? More locally, in Birmingham, the Tory Lib Dem counci has decided that it cannot afford roses in the park’s flower beds. Their solution? To grass them all over. Yet cuts such as these — and those that are far more important in key services — are not a foregone conclusion.
All of this brings us back to tax. It’s not just an issue of banker’s bonuses, in times like this the more privileged and the higher paid should share a greater share of the burden. Looking at the tax of the top 10% is crucial. And there will be a place for new innovations in tax policy, such as a Toibin tax on financial transactions. It is nice to see the Prime Minister advocating this but will he brave enough to implement this in Britain?
A realistic and progressive view on taxation is also more socially responsible. While we are looking at difficult times we should be considering a High Pay Commission. At the Compass AGM this weekend we discussed local campaigns to get local councils to consider the wages and bonus culture of their major contractors. You can’t justify swinging cuts locally if key out source contractors continue to escalate their executive pay upwards.
I’ve no doubt that the coming years will be hard but while public service budgets will be under pressure there is no doubt that this can be moderated, to some large extent, by government.
The public does not always see things in terms of less tax and less responsibility. This week the Tories have published (almost predictably) a list of the highest council tax-rise councils since 1997. Strangely, their list top ten only includes two Labour councils. One of these is Hackney where the Labour Group and Mayor has had to deal with an extraordinarily bad financial legacy. Not only has Hackney turned around the council but it has stayed resolutely under Labour control. The people of Hackney can recognise the achievement of Labour locally and recognise that the council shares their key core values.
Over the next few weeks an imaginative new centre left project will use new mapping of the economy to show have changes in taxation of the top 10% can allow government to protect public spending and to cut the deficit. Trades Unions, public service providers and community groups will all be interested in this.
So, a commitment to cut the deficit is neither here nor there. If this is accompanied by macho race to see who can cut budgets faster and deeper there will only be one looser — Labour.
Topics: Economics, Westminster Village |
