After reading the details of George Osbourne’s Comprehensive Spending Review and watching highlights of his performance in the Commons, I started to feel the hand of TINA on my shoulder. We haven’t seen TINA around for a while. She was good friends with Mrs Thatcher in the 1980s and was referred to in many of the former prime minister’s speeches. Fast forward to 2010 and I find myself very worried that TINA is being used to justify punitive cuts. According to George Osborne, There Is No Alternative. We must support the coalition’s economic policies, or we will end up like Greece. Or even worse, Manchester United.
It all sounds very sensible, prima facie. The nation has a debt of around £150bn. Therefore, we should spend less and try and eliminate the deficit. The major flaw in this is the rate at which deficit reduction is planned. The key question is whether you can justify taking a sledgehammer to public services in order to reduce the amount of interest that the nation pays on its debt. While MORI polls have shown that the public broadly agree with the thinking behind Coalition’s deficit reduction plan, it will be interesting to see how such views hold up once families up and down the land begin to the feel the pain. Mrs Thatcher was fond of framing her economic policies as ‘kitchen-table economics’ and Osborne is largely doing the same. But can you think of a financially-troubled family who would turn to their kids and say ‘no packed lunch for you today, we’ve got to pay off the mortgage. If you get hungry, just drink some water and remember that we’re all in this together’.
There can be no doubt that Conservative policy is driven by dogma. The Tories get to indulge their ideological fantasies while apparently taking the moral high ground. Labour must exploit the Tories’ lack of a growth strategy. Osborne is betting everything on leaving the Bank of England and the free-market to take care of growth while he focuses on deficit reduction.
The spending review gave us all plenty to worry about. We must not be conned into accepting that eliminating the structural deficit in five years in necessary. Osborne is taking a huge economic gamble with our public services and the welfare state, two central pillars of our society.
It is certainly going to hurt. But it might not work.
