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November 23, 2010

The smoke and mirrors at Number 10: Richard D. North tries to work out why the coalition government is exaggerating the extent of its cuts

Posted by Richard D. North

Richard D. North asks, why can't the government treat us more like adults? After all this is what they were promising in opposition.

I recently described the Prime Minister and Chancellor as conducting a "very Tory coup". That was when I believed the coalition planned to return the state's share of GDP to well below 40 per cent. Things have moved on, and the plans are a lot less dramatic. But we are just as free to wonder wide-eyed at the governments' footwork.

Lord Young had to resign (19 November 2010) because he spoke the inconvenient truth that the Con-Lib coalition plans to return public spending levels to those we knew in 2007. Then he seemingly mis-spoke himself and said that the "vast majority of people today", especially mortgage-holders, "have never had it so good" because the recession had rather increased their spending-power. The Macmillan echo was a slight exaggeration and compounded his problems.

Poor tactless Lord Young, egregiously suckered along by the Telegraph's Christopher Hope, didn't know or remember that good news is toxic at the moment. As the sage pointed out, the UKs crash dive rhetoric has played well on the markets. He hadn't spotted or didn't care about its political and presentational dimensions.

For some months in the summer it was possible to believe that the coalition intended to cut public spending to levels not seen since the 1960s and 1970s: to, say, 36 per cent of GDP. That was the sort of number which the BBC's Evan Davis inferred when he looked at the plans. That would have been some sort of transformation.

For this exciting view we had what looked like the evidence of remarks by Carl Emmerson of the Institute for Fiscal Studies briefing on the Comprehensive Spending Review (21 October 2010):

The cuts to total public spending over the four years starting next April are, after economy-wide inflation, set to be the deepest since World War II and the cuts to spending on public services will be the deepest since the four years beginning in April 1975 when the then Labour Government was trying to comply with the IMF austerity plan.
Actually, the IFS can be right on this without saying all that much. The point being that almost any cut to spending and services from current levels would have been historic. And that remark would have been true for most of the post-War period. We've lived through long periods of Keith Joseph's "ratchet effect". Spending has never, before now, been made to fall much.

But whilst it was accurate to say the coalition planned "historic" spending cuts, they weren't planning anything very historic in the way of cuts to spending levels.

From the CSR we learned that by 2014, as Lord Young suggested, the government intends to be spending about 41 per cent of GDP, a little above the norm for the 20-year period from the mid-80s. And they intend to spend more on public services than Labour did in 2007.

Lord Young was punished for not spotting that though this is good news for most people (not for proper Tories of course), it doesn't suit the display the government is putting on for its people.

David Cameron and George Osborne seem to have adopted a narrative which, being unpicked a bit, might go like this:

The People are loving our tough-guy act. It thrills their sub-conscious bits. If we make light of the current circumstances or our measures, they won't cling to nurse's hand quite so tightly. We need them to stay in a state of submissive shock which allows us to get away with rather more than would be tolerated by an electorate which was slipping back into laddish mode. Of course, come election time, whenever that is, we will need to be able to say that we are the good ol' bleeding heart, Big State Tory Macmillanites after all, and as keen on spending as the next centrist politician. But you know these narrative arc thingies: the reveal's the thing.

This doesn't mean we will have a wasted government. The coalition may give us sound public finances, a refreshed politics, something like Cabinet government and the beginnings of welfare reform.

It may be that Iain Duncan Smith can rebalance the benefits system. Maybe the GP sector is the right location for gatekeeping the NHS's care and finances. Academies and other schools may blossom and show the way to a more vibrant secondary education system. We are a long way from knowing whether these moves will amount to decentralisation let alone real denationalisation. But they might be useful precursors to something useful. It almost certainly won't be the Big Society, unless that is defined as myriad new welfare firms and pseudo-commercial NGOs and charities.

What's truly remarkable is the degree of Blairite transparent opacity we still have. Those nice young men in Downing Street remain impressive and quite reassuring. I am inclined to trust them as very smart and probably on the side of some free-market angels. But they dare not treat us like adults, and they said they would.

Richard D. North is the author of Mr Cameron's Makeover Politics: Or Why Old Tory Stories Matter to Us All.

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"Blairite transparent opacity"

What a lovely oxymoron!

Posted by: HedgehogFive at November 25, 2010 10:35 PM

RDN your inclination to trust is testament to a generosity of spirit ?

Untainted by your experiences leading to your trust of and admiration for your former employer. Driver for Leonard Cheshire whom you appraised via the rear view mirror. All the while unaware that the great man had failed to insure his vehicles.

The spectacle of a youthful RDN in the Magistrates Court averted (without his knowledge) by a Command decision within Suffolk Constabulary not to prosecute Cheshire.

Trusting RDN driving Leonard Cheshire the well spun personification of "The good of bleeding heart". There's an oxymoron in there somewhere.

Posted by: Richard Card at December 29, 2010 07:30 PM
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