People can buy one-off rides in expensive cars. I’ve never really seen the attraction but the person buying the one ride presumably gets a lot of enjoyment from it. Does someone who drives in an expensive car to work every day feel the same thrill on daily basis? No, because for him or her driving in the nice car is normal. This is, obviously, very obvious. Yet it is worth making the point.
It is a fact of life that we as we become accustomed to improvements in our lives, they feel less like improvements and more like what is normal and expected. Many of us think civilisation is on a relentless path of progress and development – making us all progressively richer and perhaps happier. This actually seems inherent in our psyche – on a personal and national level, we expect constant mild improvement. People see themselves progressing through our careers and gradually accumulating more wealth; and we see house prices rise and technology advancing. However, the credit crunch, recession and deficit has created a rift between the expectation that things can only get better and the reality facing us. As Ed Miliband has said, for the first time in a long time this generation may be the first to be less wealthy than the one before. This idea is taking a long time to take hold because it is something which wasn’t so much inconceivable as not even considered for a long time.
Many disagree over how to stimulate growth and cut public debt. Yet there is little argument about the need to find money to cut the deficit. The United Kingdom (and the West) budget was in deficit throughout most of the New Labour and John Major years. I am receptive to the idea that a stimulus is needed for growth now but this does not mean we will not have to spend less or tax more in the long term to pay off debt. You may think extra money should come from taxing the rich more; taxing everyone more; cutting public spending; or through another way. Whichever you choose, at some point someone somewhere is going to have to pay.
I have heard another analogy relating to this: it is harder to take a bone away from a dog than not to give it to him in the first place. The benefits and expectations of government and life in general that have built up over the years are not going to go away quickly, and the public will be, and already are, angry. Whilst people can see the advantage of lowering the budget deficit, just like they can see the advantage of democracy or freedom, every possible cut or tax raise is opposed vigorously by a certain group. Even if the majority of the population favour it, their tepid support can be outweighed by extremely strong resistance from the minority on the other side.
I’ll give some examples of savings government has tried to make recently, which form a liberal centre-left perspective I find relatively innocuous and harmless, yet have been attacked fiercely.
The first is the child benefit cap for high earners. Let’s split up taxpayers, who pay for the child benefit, into two groups: rich families who are eligible for child benefit; and everyone else. The first group have paid tax just to be given some of it back in child benefit. This is inefficient. As for the second group of taxpayers, it must be questioned why they should give money to wealthy people. Ok, it encourages a high birth rate and is arguably fair as children are expensive. Yet overall, this change doesn’t seem like it should be massively controversial. Yet the proposed change received widespread opposition (admittedly in part due to the illogicality of basing the cap on the income of the highest earner instead of overall family income).
Secondly, cuts to the Border Agency have come under scrutiny. The recent controversy over airport queues dominated the news for several days. These weren’t strictly all about cuts but it was an undercurrent in the debate. Of course it is bad that people had to wait for a long time in queues. Yet if to ensure security and save a bit of money we must all wait a bit longer, so be it. I would have rather high quality schools, hospitals and emergency services than short queues at the border.
In both examples, the attack on the plans by the government to save money was strengthened because of two different factors. The first is that the plans caused middle-class outrage: it is the middle classes who lose out on receiving child benefit and who go on holiday and wait for longer at airports. Of course, this group also has good access to the media and have better means to complain. Secondly, there was no clear partisan divide on the issue. The left could be opportunistic and attack austerity; the right could in the first case show empathy to ‘the hard-working families’ and in the second worry about national security. My worry is that criticism of more damaging cuts, for example to legal aid, is drowned out by the irate well-off annoyed at waiting an extra hour at Heathrow.
You say disagree with me, and think legal aid cuts are right, or that cutting the Border Agency and scrapping child benefit for high earners is wrong, or both. Yet my point is that every government wheeze aimed at cutting the deficit faces strong opposition by a certain group – tax rises on the wealthy by the wealthy, business and libertarians; public sector pay and pension cuts by public sector workers and the left; defence cuts by the military and neocons; and so on. And every scheme will be perfectly good arguments against it, which in their own right may outweigh the advantages. Yet if we want to cut the deficit, we must, and I apologise for the cliché, take difficult decisions.
The way to deal with this is to be more selective in what measures for government savings you fight and what you support. I’m not trying to sound like a neoliberal fiscal hawk; I’m actually on Labour’s side of the economic argument (i.e. I’m not quite sure exactly what I support, but know it’s not the Tories). But as more money is needed by government, both sides of the political spectrum must evaluate the effect of a particular cost-saving change, not just on its own merit, but against other policies.
As a side note, Miliband, Hollande and co. should bear this in mind. As I’ve written before, Miliand should be careful about reading too much into the French election. Matthew Parris recently wrote in the Times that the turkeys will not vote for Christmas – i.e. people will not vote to make their lives harder. If Miliband is honest, he will have to offer the 25th December treatment as well. Not just in France, but across Europe, it may well be anti-incumbency, not anti-austerity, which à la mode.