The present British government, a coalition between Conservatives and Liberal Democrats and dominated by the former, is arguably the most ideologically driven in living memory. Nowhere is this more obvious than in its economic policy.
The Chancellor, George Osborne, is in the process of shrinking the state to pre-1948 levels, that is, before the rise of what became the United Kingdom’s welfare state. “Welfare spending can’t be excluded from the difficult decisions,” the chancellor told a hearing of the Treasury select committee focusing on the recently-delivered autumn statement.
It would seem that the chancellor’s policy is one of more poverty, worse public services, further privatisation and protection for the wealthy.
In his autumn statement on the British economy, Osborne took every opportunity to laud the government’s view that austerity was working: welfare spending was decreasing, there were more jobs in the private sector and record numbers in employment. So too, opinion polls were suggesting that the British public is even more convinced of the need to balance the government books.
Each of the foregoing items is open to debate and what was not emphasised, of course, was the reality that spending cuts are far from over – they will likely continue well into the next parliament.
Whitehall departments will be further squeezed so that by 2018-19 the government will be smaller than at any time since at least 1948. Spending on day-to-day government items, investment in infrastructure and debt interest will all be reduced. The real earnings of many British workers will take up to a decade to make up for lost ground; the public sector will be hugely reduced.
The bulk of vast reductions in the budget deficit will occur through cuts in spending rather than increases in taxation.
Larry Elliot of The Guardian, recently wrote, “But the shrinking of the state is also a political choice”. In his autumn statement, George Osborne “announced fresh cuts in government departmental spending and a cap on all welfare payments other than pensions and jobseekers’ benefits”, and “the autumn statement includes plenty of giveaways – on fuel duties, marriage allowances and school meals – that will have to be funded out of smaller Whitehall budgets.”
Osborne says that he wants “a government that lives within its means in a country that pays its way in the world”. His way of ensuring that the books balance “involves pouring money into property speculation rather than productive investment, and by locking the UK into a low-productivity, low-investment, low-wage economy in which poverty rises and public services deteriorate”. 1948 does not seem so far away after all.
George Osborne, and many of his governmental colleagues, likes to draw the distinction between “scroungers” and “hard-working families”. He is seemingly oblivious to the fact that many of these oft-mentioned hard-working families “rely on welfare – in the form of in-work benefits – to top up their poverty wages”. It is clear from opinion polls that British voters are unhappy about falling living standards – perhaps the same people who agree, rather bewilderingly, with the government’s austerity policies.
The outcome of the next election in 2015 may depend on the British public making the connection between government policies and the state of their finances. Time will tell.
In a message to mark the Roman Catholic church’s day of peace, Pope Francis has called for countries to shrink the gap between rich and poor, some of whom he said were getting only “crumbs” (from the rich man’s table?). The pope said that huge salaries and bonuses were symptoms of an economy based on greed and inequality.
He focused on the financial and economic crises gripping many of today’s nations, as well as the quest for satisfaction, happiness and security in excessive salaries and immoderate consumption, all of which he believes is “out of place and out of proportion to the principles of a sound economy”. He feels that there is a timely need to rethink “models of economic development and changes in lifestyles”.
The pope’s message was impressively entitled “Fraternity, the Foundation and Pathway to Peace”. As well as offering an opinion on economics, the message also attacked injustice, human trafficking, organised crime and the weapons’ trade as obstacles to peace.
All very true, but is it not also true that, historically, the Roman Catholic church has been involved, directly or otherwise, with some of the very things he now attacks. Is it now a case of critique, remorse and apology?
To his credit, however, Pope Francis has urged his own church to be more fair and frugal – and less pompous! This may be a start, but…time will tell.