An audience with the bean-counters
Ask the Chancellors showed that the economy, for so long a flashpoint ideological issue, is now utterly divorced from Politics with a capital P.
On Channel 4 last night, we saw the first of the set-piece televised debates that will take place in the run-up to the UK General Election, expected in May. Channel 4, no doubt smarting from the fact that it didn’t get to hold one of the three party leaders’ debates slotted for the election campaign proper, gave us the poor man’s alternative: an uninterrupted 50 minutes with the men who would manage the economy – and manage was very much the operative word.
My expectations for the televised contest were carefully calibrated to ‘lower-than-low’. Yet despite all the potential for tedium, the chance to listen to three senior politicians appeal for our votes did give this particular discussion more of an edge than the usual TV political fare. But it also revealed just how much the discussion of the economy is now devoid of any wider vision for social change. Instead, we were offered three alternative approaches to tinkering at the edges.
There was no great ideological divide. All three men – the current chancellor of the exchequer, Alistair Darling, his Conservative shadow, George Osborne, and the Liberal Democrats’ economy spokesman, Vince Cable – agreed that the top priority would be to bring down the government debt. It is certainly true that the UK’s fiscal deficit is high and climbing rapidly. Simply servicing that debt will cost more than the UK’s schools budget and there are mutterings from the financial markets that Britain’s credit rate may be cut if there is no positive plan for reducing the deficit. But should the deficit really be the alpha and omega of economic debate?
What about, for instance, unemployment? Unemployment may have peaked, for now, at around 2.5million people, but only because so many people have simply given up on trying to find a job. In the most recent figures, the number of people unemployed fell by 33,000, but the number of people actually in a job fell even further, by 54,000. People have become students, gone travelling or simply stopped looking for work, which means they are no longer officially registered as unemployed. Many other people are putting up with lower wages, shorter hours or even part-time work rather than signing on, indicating a much wider spread of economic hardship than the bare unemployment figures suggest. Yet apart from one question about youth unemployment last night, the issue was barely mentioned.
Instead, the most significant clash was over the timing and targeting of public-sector spending cuts. Alistair Darling declared that cuts should wait until the economy was in a better state – or until 2011 at least – to avoid plunging the UK back into recession. George Osborne thought the cuts should start immediately, without being terribly specific about where they should be made. Vince Cable also thought they should begin now, and gave a list of projects – like renewing the Trident nuclear missile system and introducing national identity cards – that should be cut immediately. Yet none of them even offered a plan that would mean that, within the life of the next parliament, government spending would be no more than government tax income. Even in the narrow terms of the debate on offer, all three parties appear to be guaranteeing failure.
What was also clear was that the two major parties, Labour and the Conservatives, were tying themselves in knots trying to find cute pledges to appeal for our votes. For example, in his Budget speech earlier this month, Darling declared that he had identified billions of pounds of potential savings that would not affect ‘frontline’ services. Osborne described these savings at the time as a ‘fantasy’. Yet yesterday, Osborne was spending the proceeds of these savings to reverse a planned increase in National Insurance contributions – an illogical move if cutting the deficit really was the number one priority. On the other hand, if Darling could save money without hurting services, why not start to do this immediately?
There was also the electoral gamesmanship of ‘ringfencing’. The Tories would not make cuts in the National Health Service (NHS). Labour would ringfence spending on the NHS, schools and the police. Cable, making a perfectly sensible point (he never gets beyond sensible to ‘inspiring’ or ‘visionary’), pointed out that by guaranteeing spending in certain areas, the net result is even bigger cuts in other places. The NHS makes up a substantial part of government spending, so even quite small cuts there would make much more of an impact than larger cuts in, for example, defence or universities. But the two big parties have clearly decided that the electoral advantage of protecting the NHS far outweighs the importance of a balanced set of priorities for the economy.
If there was little fundamental disagreement on the priorities for government, there was practically a love-in on the need to reform public-sector pensions. Even where there appeared to be some differences, the roles were peculiarly skewed, with Osborne declaring that his National Insurance announcement meant protecting the many at the expense of the wealthy few (apparently channelling the spirit of Denis Healey circa 1974) while Cable’s party has been the one talking about ‘savage’ cuts in public spending.
With all this apparent enthusiasm for public-spending cuts, it was only towards the end of the debate that Darling alluded to the importance of economic growth. If the country generally is wealthier, then fewer people draw benefits and more people pay taxes. The lower-than-expected unemployment figures, for example, meant that the UK will borrow £11billion less this year than previously expected. Then all three debaters made bland promises about promoting growth and ‘making things’, weaning the UK off its dependence on the financial services industry. Yet there was little in their respective programmes that would suggest they really do have a vision for changing the economy.
In fact, the event horizon for economic debate seems to be about six weeks. Never mind how Britain might look next year or, better still, in a decade’s time – what matters for the wannabe administrators of Britain’s economy is getting through the selection process, the General Election, in six weeks’ time. So when Osborne offers changes to National Insurance rates, it doesn’t represent a principled rebalancing of spending between state and individual, but a small bribe to that particular section of society that the Tories need to win over. It’s this blinkered outlook, where the future is another country, that got the British economy into a mess in the first place.
The recession and the election have combined to provide a golden opportunity to assess where the British economy is going, the scale of the challenges we now face, and how we can all become better-off in the future. But this chance is being squandered in a tedious discussion about tax rates and spending cuts. Such a narrow debate is the logical outcome of a process that started with Margaret Thatcher’s assertion that ‘there is no alternative’, a view reinforced by Gordon Brown’s first act as chancellor of the exchequer, to hand over control of interest rates to an ‘independent’ Bank of England. From the first moment that New Labour entered the corridors of power, it effectively admitted that the economy – the single most important issue facing any government – would no longer be a political issue. When the government abdicates responsibility in this manner, all that is left is to discuss who can be trusted to do the admin.
And that is the discussion we saw on Channel 4 last night – no long-term vision, no real politics, no ideology, just an office-style meeting on administrative matters, which just happened to have an audience of 1.6million people. If all that the big parties can offer us is different methods of bean-counting, the General Election of 2010 is likely to be marked by a desperately disappointing and tedious campaign. The debate about the economy needs to be re-politicised, and moved from the bean-counters’ department back into the public realm.
Rob Lyons is deputy editor of spiked.
Previously on spiked
Rob Lyons attacked Alistair Darling’s decision to bash the bankers at the 2009 Labour Party conference. He also revealed the truth about the unemployment stats. Rob Killick attacked the spurious battle of the economists. Mick Hume warned that the no/low-growth economy might become the New Normal. Sean Collins criticised the new-found faith in John Maynard Keynes. Daniel Ben-Ami argued that blaming bankers glosses over long-term economic decline. Or read more at spiked issue Economy.