A couple of recent quotes from the two most powerful people in the British Government now prove that the austerity project has not been embarked on with the spirit of reluctance that we are encouraged to believe. Indeed, we were right to be afraid when the Conservative whips had to instruct their backbenchers not to cheer ‘too loudly’ when the first cuts were outlined in the 2010 Spending Review. For now we know that, in the hypothetical situation where Cameron is still in office when the budget deficit is eliminated, he would seek to cut taxes rather than restore public services.
The Prime Minister told journalists “I want to give people back some of their hard-earned money and try to reduce their taxes. That is what drives me as a Conservative.” Oh, how this contrasts with his tune in 2007, when the ‘compassionate’ Conservatives sought to match Labour’s spending plans, and 2010 when he assured us that he didn’t want to cut too much. Also, this tax pledge comes shortly after George Osborne informed us that he intends to eliminate the post 2015 deficit with spending cuts alone. And that shows us that austerity is little more than the familiar Tory formula of resizing the state, with the difference that this time the reductions in tax will follow ten years after those in public spending. Unless you’re a top rate Income Tax payer.
The deficit will be eliminated no sooner than 2020, whichever party is elected in 2015. I can predict this with such confidence because it is impossible to close such a vast gap in the public finances as will exist in two years’ time. I don’t know who the electorate will hold responsible for the stubbornly high borrowing levels, but I firmly believe that we have to base our political ideas on the notion that the intellect of the average voter is hugely underestimated. When we on the Left believe otherwise, our retreat into liberal intellectualism leaves us isolated and powerless. That’s why people will not only attribute the Coalition’s economic failure to the premature spending cuts, but they will also reject a party which wants to ignore the devastation of our communities. Yes, the cost of living is high, but that is a thousand times more effectively tackled through subsidy, regulation and investment, not lower tax rates.
When the streets aren’t being cleaned, our ambulance service is overstretched delivering patients to overfull A&E departments, and our low-income workers cannot afford to live in our capital city, few people will see lower Capital Gains Tax rates as a priority. If it were any other way, we’d have little claim to be a civilised society.