At the end of the worst Budget week in decades, two especially grim images remain stuck in my mind. The first is the newspaper charts, courtesy of the indispensable IFS, showing that the public finances will be in a deep hole for the best part of a decade and that we face “two parliaments of pain” before public debt is brought back under control. The politics of the next decade will be defined by very tough choices on spending and taxes.
The other is the tv clips of Britain in the 1970s, the last time an embattled Labour government faced an economic crisis and was forced to put the brakes on government spending. The country’s economic situation is not exactly the same now as it was then and neither are Alistair Darling’s remedies. The ’seventies can be too easily caricatured as one long bad hair day. Yet those grainy images of trade union demonstrations and mounting economic woes are as potent a symbol as any that this country has. The British habit of explaining politics through the use of historical myths and symbols has struck again. The “crisis” frame is set up and the political narrative of a new national decline is set to roll. You’ve had the pleasure, now pay the bills. You’ve had the party, now for the hangover. The morality tale is clear.
Barring a miracle, Labour is on course for a huge defeat at the next general election. Looking at those IFS charts, it looks as if the more valid historical parallel for Britain in the 2010s will be with the early/mid-1990s: a Conservative government presiding over cash-starved schools and health services, along with under-investment in essential infrastructure. I can't see what other conclusion that we can draw from George Osborne’s public statements so far. [click here and here]
Despite the growing expectations that the Conservatives will win the next general election and have to make the tough choices, they still have offered very few specifics about how they would make them. But they are still not being placed under any real pressure. (See this FT article though) Martin Kettle made this point very well in Friday’s Guardian and other commentators are picking up on it too.
The Liberal Democrats have a new opportunity: to make sure that the Tories are placed under as much scrutiny on public spending as Labour. There are some signs that party leaders are playing this version of the traditional Lib Dem tune - “a plague on both your houses”. Writing in Friday’s Independent, Vince Cable had this to say:
“Mr Cameron has had a few hours fun enjoying his party's revenge for the humiliation of Black Wednesday. But he will now have his feet held to the fire for the next year as we compete with him to replace a failed government on economic credibility and hard policy choices. Unless he tells us what the Tories would cut he is no more credible than the government front bench. Labour seem to have given up – so now it's up to the Liberal Democrats to take on the Tories and expose their subterfuge.”
With this opportunity comes a new challenge for the Liberal Democrats. One is obvious: to be more credible and robust than the Conservatives on matters of public spending. As Vince argued:
“The only way forward is to identify, explicitly, areas of government activity which will have to be cut right back.”
He offered several specific suggestions, all which I agree with, and posed some valid questions for future debate. Still, there is a bigger context, a tougher question: how the Liberal Democrats believe that a reformed (that is, decentralised) state should deliver its social policy objectives and principally, a more equal spread of opportunities. The issues involved, which have never been straightforward, will be more difficult in the new age of austerity.
“a national debate about what the state can and cannot afford in the future, not Whitehall salami slicing today. That is the responsible way—the honest way—to reduce spending in the years ahead and avoid painful higher taxes.”
I can't see how anyone can disagree, but then George Osborne also says he wants this sort of discussion. Nick Clegg and the Lib Dems need to say what they will bring to a national debate on the role of the state. Better still, we should lead it, otherwise a big opportunity will be lost.
So, where does Nick want to take the great debate on the role of the state? And will the party follow?