The Budget: a cheap excuse for politics

At the time of writing, the details of what the UK Chancellor of the Exchequer, Alistair Darling, will announce in his annual Budget speech today remain uncertain. But amid all the talk of rising prices and taxes, falling growth rates and real incomes, the Budget discussion has already made one fact clear: that Britain has suffered some serious shrinkage in the scale of economic and political debate.

In a thriving democracy, the national budget ought to be at the centre of a heated argument about the direction of society. After all, the state’s ability to raise money through taxation is the precondition for carrying out any of the government’s policies. That is why the question of revenue-raising has been at the heart of many great poltiical struggles in the past.

The English Revolution of the seventeenth century began with opposition to the King’s autocratic money-grabbing, and insistence that no taxes should be levied without the consent of parliament. The American Revolution of the eighteenth century began when colonials objected to the British Crown’s punitive tax policies, under the slogan No Taxation Without Representation.

More recently, the twentieth-century consolidation of parliamentary democracy in the UK came in the struggle over the ‘People’s Budget’ of 1909. When Liberal chancellor David Lloyd George proposed new taxes on the wealthy and the landed classes to pay for a system of social security and pensions, it sparked an historic battle between the elected House of Commons and the hereditary House of Lords. Two General Elections and a constitutional crisis later, the Commons had won and the Parliament Act of 1911 ensured that the Lords could never again veto a finance Bill.

And how do the UK government and opposition parties plan to use that hard-won democracy now? To stage a setpiece bunfight over the minutiae of Budget proposals widely expected to be the least interesting ever – ‘the zzzzz Budget’ as the BBC called it even before Darling stood up to deliver it. The days when the struggle over Budgets and taxes could inspire revolutions and coups are as long gone as the penny insurance stamp.

Nobody expects any great economic policies or breakthroughs to be announced in Budget speeches these days. Indeed, to judge by the leaks there will not be much to do with the wider economy in the Budget at all. Instead attention has focused on the small-minded moral and political measures Darling has planned to punish drinkers, drivers and others whose behaviour does not measure up to the standards that New Labour expects of its subjects – I mean citizens.

The past two decades have been the age of TINA (There Is No Alternative), where all sides accept that the market rules. As a result, the issue of how the economy is run has effectively been removed from the political battlefield, and reduced to a narrow and technical question for accountants and consultants.

First as New Labour chancellor and now as new, New Labour prime minister, Gordon Brown has come to embody the managerial spirit (if that’s the right word) of the age, introducing TINA to his friend Prudence in what must rate as the most unexciting ménage-à-trois in history. After Tony Blair’s first government was elected in 1997, Brown’s first important act as chancellor was to hand over responsibility for financial policy and interest rates to the bean-counters at the Bank of England, thus formalising the de-politicisation of the economy.

Now, speaking through his mouthpiece Darling, Prime Minister Brown apparently plans a solid and dull budget that can emphasise his differences with Conservative leader David Cameron by stressing ‘competence over charisma’. Some might think that banging on about economic competence is a dangerous business for Brown in the wake of the Northern Rock debacle. But what other cards do this prosaic government have to play?

The consensus among pundits seems to be that, with prospects for the economy looking dim, tax revenues falling and government debt rising, Darling and Brown have ‘little room for manoeuvre’ with this Budget. The naïve among us might imagine that times of trouble are precisely when bold action is called for, but that is not the way in our safety-first times.

The underlying reason why the government had little room for manoeuvre with the economy is not, as some radical critics claim, because the process of globalisation has rendered national governments powerless. The state remains a vital prop for the supposedly ‘free’ market, as Northern Rock confirmed. The problem is rather that the state is already so heavily involved in propping up the economy that it has limited scope for doing more, even if the government wanted to. Public sector spending in the UK stands at well over £500 billion, and the state’s share of national economic output is held at around 40 per cent on paper only by the most ‘creative’ of trick accountancy. We are a long way from the 1930s, when a massive and unprecedented injection of state spending galvanised economies out of the Depression from Roosevelt’s America to Hitler’s Germany. Today state spending is already so high that pumping in more brings diminishing returns.

Mix that economic reality with the government’s political cowardice, and we have a recipe for a rigor mortis-inducingly dull Budget. It is telling that the only economic issue to have excited any interest beforehand has been the row over the government’s proposal to impose some sort of modest taxation on ‘non-doms’ – wealthy foreigners who avoid paying UK tax on much of their earnings by registering as non-domiciles. That such a fringe issue should take centre stage, with some observers panicking that the housing and share markets could collapse if the non-doms flee the country while others suggest such a tax is the key to social justice, reflects the impoverished state of economic debate. The focus on the non-doms is also symbolic of the fragile state of a UK finance sector that is dependent on handling ‘non-dom’ capital lent or invested from overseas, and so insecure that it seriously believes the loss of a few rich foreigners could lead to a downturn (see The truth about the ‘credit crunch’, by Phil Mullan).

With any serious debate about the direction of the economy relegated down the agenda, the UK Budget has instead become just another excuse for making political gestures. It is not so much that economics has been superseded by politics – there would be nothing necessarily wrong with that. Rather, it is that discussion of our society’s economic foundations has been personalised and trivialised in line with the rest of political debate today.

So we are left with a Budget that, if one was to judge by the headline predictions, is less about sorting out the public finances than policing personal behaviour. The government now seeks to justify new taxes, less because they will raise cash, than because they will somehow raise moral standards. So we can look forward to fresh taxes on drinking, driving, flying and any other aspect of life that offends the new eco-ethics. Like the Vatican with its new version of the deadly sins, the New Labour government is falling back on the environment as the only source of authority it feels able to draw on today.

If you want a snapshot of the depths to which public debate has sunk, as TINA gets into bed with the petty politics of behaviour, look no further than the contest to win our attention between the Treasury’s crusade against the evil of plastic carrier bags and the Conservatives’ plan to save the nation’s youth through an alcopop tax. Such a cocktail of plastic and sugary political gestures is enough to make anybody want to reach for the bottle or stick their head in a plastic bag.

And where do the rest of us stand in this un-brave new world of cheap gestures, narcoleptic budgets and petty lifestyle-policing? Not as active citizens or political subjects, but as passive consumers, taxpayers, passengers and recyclers, expected to sleepwalk our way through life while the Green and Good in high places are left to get on with, well, not doing very much.

‘No taxation without representation’, the democratic protesters of yesteryear demanded. Today we have plenty of representation in parliament, and no shortage of taxation. But we have little or no real democratic debate between alternative visions of the future direction of our society, economy, or political system. And you can’t put a price on that.

Mick Hume is editor-at-large of spiked.