Sunday, 20 September 2009

Any cuts to public services must be made on grounds of principle alone.

At long last the cat is out of the bag, in his speech to the TUC conference on Tuesday Gordon Brown finally used the ‘C’ word, he said that if re-elected a Labour government would: ‘Cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets.’

All well and good, but the real issue is the size of the cuts that would have to be made by any government after the next election, treasury documents leaked to the press this week suggest a cut of 9.3% over the four years from 2010. The only alternative to this, as suggested by the Institute for Fiscal Studies this week is a huge hike in taxes at the very moment when the economy is starting to take its first faltering steps towards recovery.

An IFS source told the BBC this week that the recession and the banking crisis could put ‘the tightest squeeze on spending on public services since the UK was negotiating its spending plans with the International Monetary Fund in the 1970’s.’

Predictably the Conservatives sought to make political capital out of the government’s embarrassment with shadow chancellor George Osborne saying that Gordon Brown had ‘misled’ parliament over spending cuts and David Cameron accusing him of being the prime mover in a long term ‘cover up’ of the extent by which the public purse strings will have to be tightened.

The Liberal Democrats, in the shape of their economic affairs guru Vince Cable, took a more high minded line criticizing the Tories for trying to make ‘a big political issue’ out of spending cuts that, he said, most people had known were imminent for months.

As sunny Jim Callaghan put it back in the seventies ‘the party’s over’, now we have to face the mess it created in the cold light of a hung over morning and it is not a pretty sight.

Over their twelve years in office Labour have splashed the cash in relation to public services often with the very best of intentions, but little idea of how to bring about the much needed reform of the public sector, matters weren’t helped, of course, by their inability to negotiate with the unions representing public sector workers.

Now the battered and bewildered government led by Gordon Brown must spend its last few months in office contemplating a question that will define political life in the UK for the next decade, what is to be cut and why?

It is, to say the very least, something of a curve ball thrown at a political class that long ago abandoned tricky subjects such as defining what it means to belong to the left or the right for media friendly sound bytes and a cosy seat on the fence.

The method favoured by Mrs Thatcher in the eighties of standing back and letting the markets fix the problem, or not fix it if that suited their mood has been proved a failure. Whole cities have been turned into little more than reservations for the disengaged with a disastrous knock on effect in terms of health problems and spiralling welfare costs, social problems that have become engrained over a generation will take the same length of time to cure and cost billions.

Cuts are an inevitable part of reducing a budget deficit that has been allowed, again for the very best intentioned reasons, to reach levels never before seen in peacetime by a government that is fast running out of time and energy. Whoever wins that next election must make them though from a standpoint of first having decided what services it wishes to preserve and how much pain we will all have to endure in order for it to do so.

Soaring levels of debt, deep social problems and a growing suspicion on the part of the electorate that the political class simply isn’t up to the job of governing the country are returning Britain to the status of the ‘sick man of Europe’ it held in the seventies. The cure will be painful in the extreme, but to work in must take the form of laser surgery not the brutal and often counterproductive butchery practiced by an eighteenth century barber surgeon who knows how to cut well enough, but must rely on trial, and often fatal, error in order to work out where to do so.

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