Will the Tories come clean on public sector cuts?

March 3, 2010


Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. –

In the movie “The Untouchables”, the cop played by Sean Connery brushes aside his sidekick’s assertion that he really does want to nail Al Capone with the response: “Yes, but what are you prepared to do?”

We should respond in the same way to the Shadow Chancellor’s public commitment to preserving Britain’s AAA status.

As I have argued before, it is not simply that these promises lack credibility unless they are accompanied by something far more specific than we have had so far from the Tories, it is also a matter of preserving the health of our ailing democracy.

All the indications are that the electorate are more alienated from our politics than ever before in modern times, not just because of the MPs’ expenses scandal, but also because of the near-suppression of debate on a number of hot-button issues: immigration, the war in Afghanistan, EU membership among others.

Now it seems the Conservative front bench agrees with the government that the question of where to cut public sector spending is another subject to be added to the banned list, at least till after the election.

Going into an election asking for carte blanche to deal with the fiscal crisis (“trust us – we’re Tories!”) betrays a patronising attitude to voters and a cavalier attitude to the foundations of democracy.

Even if we give the Tories the benefit of the (very justifiable) doubt and accept that they can be relied on to restore fiscal balance, the electorate still should be given the opportunity to pass judgement on how a Conservative government would get us from here to there – after all, that is the hard part.

Nobody questions the desirability of keeping AAA status, but it is plainly going to be impossible to manage the trick without upsetting some of the country’s most powerful interest groups.

To some extent, government over the next few years is going to be a matter of choosing between fight and flight, deciding which battles are worth fighting and which are best avoided. At some point, for example, there will have to be a major confrontation with the public sector unions.

We should not expect to be told in advance how the Conservatives propose to face down that challenge if they win the election, but the chances of winning that particular battle will be substantially enhanced if they tell us now on where they will make their stand.

Will they end the injustice of overgenerous public sector pensions? What will they do about public sector pay levels, which have risen relative to the private sector recently? Most important of all, will they be content simply to stop public sector payrolls rising or do they plan (as they surely must) to cut them back, and if so, in which departments?

If they go into the election without any clear indication of where they propose to cut (and indeed of which taxes, if any, they plan to raise), they may increase their chance of winning the election, though this looks less likely day by day.

But if they do win, their unwillingness to show their hand in the election campaign means they will have to face the post-election battles with no unambiguous mandate for specific austerity measures, leaving them wide open to the cry “you’ve got a right to cut his job, not my job”.

No wonder Labour is catching up in the polls, as the electorate become ever more convinced that Cameron and Osborne are simply lightweights running away from the heavyweights who are already limbering up to take on the next government.

If any readers are wondering why the charge of cowardice is directed at the Conservatives alone, the reason is simply that it is unrealistic to expect anything better in the way of transparency from the current administration.

This much was made crystal-clear to anyone who shared the painful experience of hearing Evan Davies on BBC Radio 4 yesterday morning trying in vain to extract an answer from a government minister to the question: how great a cut in their budgets for next year should local authorities expect?

By the end of the excruciating interview, listeners were none the wiser about local government finances, though they probably had a better understanding of why interrogators sometimes resort to torture.

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