Cuddly Cuts?
‘These are not just cuts, these are delicate, compassionate Coalition cuts…”
So might run the Central Office of Information campaign following Nick Clegg’s announcement of “sensitive” cuts. Or at least it might, only the COI budget is one of the first in the firing line…
Nick Clegg’s general point is that although spending reductions are essential, he doesn’t want them to be done in the same way as in the 1980s, which in the “folk memory” of the north of England in particular, were particularly “brutal”.
A good ambition, but is the narrative wise?
The main problem is that there is no nice way to lose your job.
The government can create better support structures for retraining, can incentivise moving people to where the jobs are, and can ease transition in other ways. A lot of this already exists. It doesn’t though make losing your job a pleasant experience.
It also doesn’t sit well with the Coalition’s other major welfare focus, workfare, that although ‘progressive’, a ‘centre-left’ innovation, and tied to the Clinton administration, is still a very big stick, not a carrot or candyfloss.
Rather than focusing on compassion alone then, Nick might be better off talking about his ambition to get everyone affected back into work as soon as possible, and how the coalition intends to improve the chances of that happening. That’s what matters when you have job insecurity not hearts and flowers.
The other big credibility issue in the ‘sensitivity’ narrative is where cuts are most likely to take place. It is evidentially the case that the most bloated public sector institutions, and welfare abuses such as using disability benefit to mask unemployment, are in the areas where Clegg wishes to be most sensitive.
Does regional sensitivity then mean the more balanced south must face the music first, or pay most of the bills? Neither is likely to go down well with most of the people who have elected this coalition.
Other aspects of the brutalism narrative of the 1980s should not return. We are unlikely to see the Police face down members of BA cabin crew. The concentration of failing nationalised industry in small towns that made the impact of some 1980s closures more devastating is less likely to happen with the closure of targeted Council services.
But Nick would do well to remember that in no small part the shock of the 80s was due to the decades of political dishonesty that preceded it… ‘cradle to grave welfare’… ‘the state will provide’… ‘jobs for life’… ‘homes for heroes’… and so on… that put necessary changes in the most difficult context possible.
Nick will need to walk a very careful tightrope to avoid perpetuating a similar mistake. Policy needs to ensure more private sector growth, a smaller better focused state, and pathway between the two for those impacted by transition.
Promoting the pathway is surely the right kind of compassion to consider, not tea and sympathy without any sense there is something fundamentally wrong with vast swaithes of the country having no better career opporunities than working for the Job Centre.
June 6th, 2010 at 4:47 pm
Politically that is Clegg’s gambit, however this is pussy footing around. When will the political classes get that socialism, state spending, high budget deficits and feather bedded welfare just leads to more unemployment, less wealth and has led us to this precise predicament we have now.
I am sorry but if we want full employment and high GDP growth the less EU and state interference the better.
To be brutal I was shocked that Labour in the constituency of Leytonstone and Wanstead in east London hardly had a dent in its majority and UNITE’s John Cryer got elected. A mixture of the client state (e.g. Whipps Cross Hospital), ethnic minorities and council house chavs came out in force to give socialism its full endorsement. I must of spoken to 500 people at least during the campaign, so I hope I am talking with some authority.
They say in Hartlepool Gary Glitter standing on a paedophile manifesto would get elected in a Labour stronghold like that. There are constituencies in the north and inner cities, have not and will not ever vote in a Lib Dem or Tory MP. Quite frankly if the bulk of the cuts, economically justified, fall in these geographical areas, thats too damn bad. We, (Lib-Con coalition) will never their vote.
June 6th, 2010 at 4:54 pm
There is a prejudice against the “bloated” public sector expressed in this article that overlooks the fact that the primary cause of the national debt getting out of control is the irresponsibility of the private sector banks which had to be bailed out thanks to the British taxpayer at huge expense.
It is bad enough that public sector employees will lose their jobs because of other people’s mistakes, but there is an obvious concern that it is people on low incomes who benefit most from public services who will be hardest hit.
There is a vague notion that jobs in the future will come from the private sector but it is not clear what part of the private sector is suddenly going to become the motor of growth from now on. The growth we experienced prior to 2008 was in reality a bubble in the financial sector. That cannot be allowed to happen again (although it might of course), because we have seen what happens when the bubble bursts.
We cannot expect significant growth from manufacturing because we cannot compete with China/India. And as for our own natural resources, we have already reached peak oil in the North Sea.
So I do not see a return to business as usual. We are still a rich country of course, and what would be useful would be to consider how we organise society with the riches we already have. John Stuart Mill thought this way, see http://www.panarchy.org/mill/stationary.1848.html
If on the other hand you believe that economic growth can happily take place in perpetuity, then you will naturally dismiss all this. It is looks as though with this coalition government you will have your chance to show us whether your theories work.
I must say though that a policy of workfare at a time of high unemployment looks ridiculous, and doesn’t in itself create any jobs. Why on earth would any employer want to recruit someone who has been unemployed for a long time and been forced to do training courses that probably they did not want to do, or didn’t do well in? Why would they do that? And if the state withdraws benefits from that person, what are they supposed to do then? Starve to death, or resort to shoplifting?
June 6th, 2010 at 5:52 pm
@Geoffrey
I think you will find that the American Democrats are the ones to blame for the banking crisis, going back to 1977.
What happened was the investment banks issued Credit Default Swaps (CDS)(derivatives) to underwrite the Democrat state sanctioned lending to blue collar workers in unstable employment. The purpose of a CDS is an insurance policy, should it become bad or doubtful. It was a domino effect of: 1. Socialist legislation. 2. Reckless lending to people who could not pay the loans back. 3. The bad debts were then underwritten by CDS’. 4. Domino effect as each party could not fulfill their obligations. One could not even rob Peter to pay Paul. Alas George Bush was not allowed to fix the situation.
State interference again, has had appalling consequences.
“In 1977, Democrat President Jimmy Carter passed the Community Reinvestment Act (CRA). This act forced banks to “provide credit, including home ownership opportunities to under-served populations”.
In 1993, Democrat Bill Clinton asked his Treasury Secretary to come up with reforms to increase the expand the CRA.
In 1997, Democrat Bill Clinton increased the market share of these CRA loans from almost zero to almost 15%. Fannie’s and Freddie’s combined portfolios went from about $200 billion to over $1 trillion during Clinton’s term in office – a five fold increase.
In 2005, Bush attempted to reform Fannie Mae and Freddie Mac (GSEs) but he was rejected along party lines despite warnings by Federal Reserve Chairman Alan Greenspan.”
http://look2thewest.wordpress.com/2008/09/25/democrats-1-trillion-mistake/
June 7th, 2010 at 12:54 am
It’s hard to imagine good prospects for many places distant to London. In the last ten years, London and the South created 772k private sector jobs – while the Midlands and North created only 75k. The two areas have similar populations – and yet private sector firms choose the South 9 times out of 10, despite all the Labour’s regen money, and despite the higher cost of land etc. Not all of the jobs are finance.
Even if the cuts are not geographically specific (eg even if we leave RDAs etc with unchanged funding) public sector cuts are going to hit the non-SE hard. It is hard to see workfare working in areas in which the private sector has been shedding jobs for years, and in which the public sector is not hiring. Stoke alone lost 20,900 private sector jobs over the last ten years, 1 in 6 of its private sector workforce. Furthermore, Stoke’s private sector firms are not doing well – productivity growth of 1.3%, a quarter of the average for England. How can Stoke compete with somewhere like Chatham? Chatham is better located, and its workers are paid only £14 a week more. As a result, it is gaining private sector jobs, and its productivity growth is almost 3x as high. Unless the difference in wages is much bigger, it is likely that firms will continue to prefer Chatham to Stoke, and thus that Chatham will continue to do relatively well and Stoke will continue to struggle.
All of these figures are taken from the Centre for Cities publication, Private sector cities, by Webber and Swinney, launched today, and which I recommend highly.
June 7th, 2010 at 1:37 pm
One easy topic to save money is “saving the planet”.
Postpone this lofty goal for a few years until we can afford it. With a bit of luck it will be just another forgotten craze by then – like platform shoes and hoola-hoops.