Many on the left of British politics still talk about “austerity” as something created by the Coalition government and now being carried on by the Tories with their newfound majority. However, I can assure you that austerity is for real; the government has less money to spend than it used to, or rather, we now know that the markets will not support the levels of government borrowing seen prior to the crash of 2008 any longer.
The Tories have a solution to this: you cut things. Lots of people don’t like this solution. Even lots of the people who voted Tory a few weeks back don’t particularly like this solution. But what it has going for it is that it’s a bona fide solution. What’s the Left’s alternative to the Tory plan? Deny that austerity exists in the first place. This is the chief reason why Labour lost the election as badly as they did this year.
What the British public heard over the course of the election campaign was that the Tories were probably going to cut some things from public spending that many amongst them probably would object to; however, Labour seemed to think that 2008 had never happened, or been some sort of corporate driven delusion or conspiracy. So the Tories were the least bad of the two by some ways. If Labour sticks to the same arguments, it will lose again; next time, probably worse.
This does not mean the Left needs to cave in to Tory solutions to the problem – otherwise, what’s the point? It just needs to admit there is a problem in the first place, from which it can then assemble its own arguments. But the second part can only follow if the first is achieved. At present, that feels a long way off.
In essence, the Left needs to figure out how you keep social democracy rolling in an age where governments can borrow less from the markets. Many on the left do have a point when they say a return to Blairism isn’t possible, but they’re just off on the real reason for that: it’s because the type of heavy borrowing to keep taxes low but public expenditure high that Blair championed won’t work again, not now, very possibly not ever. The 2008 crash happened because we were all leveraging against a future that was never going to happen.
This is a big ask, coming up with a way to maintain an active state when less money is going to be available. It will involve demolishing shibboleths, such as allowing some private involvement in health care while protecting the free at the point of care principle (as has happened in Scandinavia already). It will require making tough choices about what the state is and isn’t for. But I’ll tell you this much: if the Left can figure this all out, it will be well worth it. Because if there’s a credible plan to keep the NHS going, how to continue a high level of care for the elderly in an aging population, and a way to not only avoid suffering declining public services but actually watch those service improve, all while keeping taxes relatively low and the public finances in check, the Tories will get blown out of the water a la 1997.
But as I say, this all seems like a pipe dream at the moment. The Left seems unwilling or unable to even take the first step. All of us, whether we consider ourselves on the left or the right of politics, are worse off for this.
Any thoughts about expenditure ring fence policies? I’m thinking of pledges to maintain funding for education or the NHS at the level of year X. Aren’t these conservative policies, just doing the same old thing in the same old way? Are we losing sight of smart innovation in the mud of convention?
As a social liberal at heart, I think the party has to promote new ideas for service delivery.
Nick,
In the way you have phrased the challenge, you have accepted the Right’s permanent assertion that to balance the books we have to cut spending rather than increase taxation. Whilst the UK is sitting on net assets of £9.5 trillion, it can never be argued that we are a poor country or that we are bankrupt. The challenge is how to get that wealth working for the benefit of all rather than just the richest few and, more importantly, how to persuade the electorate to vote for it.
The issue as I see it, is that the Left have never (until I heard Stephen Kinnock espousing it recently) explained that government spending on health, education and infrastructure is actually in the interests of the wealth creators by providing them with a well educated, healthy workforce and an efficient working environment. The rich need to see the higher taxes that they would have to pay as being an investment for them that will deliver greater returns by making their businesses more competitive. Inherent within that though has to be the acceptance by the left that government spending has to be efficient and that will mean taking on vested interests and cutting jobs. The flip side to that though is that there are certain activities which it is more efficient for the state to organise rather than leave to the market (eg roads) or where a natural monopoly exists (eg railways).
Similarly, despite some cack-handed efforts in the last the general election, the Left has never been clear as to what it believes is the role of the market. I believe that the philosophy for any compassionate liberal should be that markets should be free from government intervention except where they cease to operate freely (eg energy in the UK) or where the free operation of a market has undesirable consequences (eg the minimum wage is the appropriate response when there is a oversupply of labour). This would give the Left an easily understood backdrop for why they would do something rather than just issuing policies into a vacuum.
This probably comes across as all quite naive but the lesson I have learned from my children, which the left also need to learn, is to never stop asking “why”.
Nick
You blame 2008 on “leveraging”, which is true. But that was private leveraging, not public leveraging. It had literally nothing to do with public debt, which anyone will admit.
Also borrowing was at historically ordinary levels when the crisis hit.
Secondly, please provide evidence that it is now hard or impossible to borrow from the markets without mentioning Greece, which is on the Euro. Please provide specific UK evidence that this is a problem. If you want to really flummox me, also mention Japan which has debt of over 250 percent of GDP