Forest of Dean & Wye Valley

The Gathering Storm

In Editorial on October 21, 2010 at 2:17 pm

A lot can happen in a couple of months – particularly when we have a new Government that wants to give the appearance of hitting the ground running. This makes it difficult, in a bi-monthly publication like the Clarion to keep up to date with developments.

In particular it’s difficult for us to comment specifically on where the Tory/Lib Dem axe will fall, or on the impact it will undoubtedly have on public services, and on those who rely on them.

As this issue is being prepared, Government Departments are busy calculating where, and indeed how, they can cut back on their budgets. The specifics will only be known later in October when the Chancellor presents his budget review.

Already, the Trades Union Congress has warned that the scale of the proposed cuts will hit the poorest in society ten times harder than the rich (indeed, those in the richest top ten per cent of our society won’t even notice). Health, social and education services that the bulk of us rely on are set to be slashed. According to TUC general secretary, Brendan Barber, “it’s a real threat to social cohesion. Public services are a part of the glue that holds society together… When you start weakening the seams you threaten the fabric of society.”

The TUC report was carefully researched and costed – based on the broad brush stroke figures available at the time. If they are as drastic as Chancellor George Osborne suggests then indeed we are in for a rough time. He has claimed that they are “necessary”, and denies that there’s anything ideological about them. As far as the Clarion’s concerned, his protestations need to be taken with a very large pinch of salt. It’s fair to say that there are many in the Tory Party who will be only too delighted to see savage cuts in the public sector. After all, according to their ideology, it’s the social services that drain the economy, create a strata in our society of “scroungers” and act as a brake on self-reliance and wealth creation.

At present, the Government still seems to be enjoying a honeymoon period (if opinion polls are anything to go by). It would appear to be maintaining a higher level of public support than we would expect, considering the impact that its cuts – and, indeed, its welfare reforms – are likely to have on all of us. But with the storm clouds gathering, this may not last.

Meanwhile, the various players in this unfolding drama have been meeting for their respective autumn conferences. Delegates to the TUC, meeting in September, were concerned to develop a strategy to build a broad coalition to fight the cuts when they materialise. On the other hand,  the Labour Party was mainly busy with the necessary task of electing a new leader – one who should, as leader of the opposition, be the focal point for the Parliamentary fight against Conservative cuts and Government policies to re-shape the public sector (plans to privatise the NHS and sell off the Post Office, for example). As for the Tories, they had a lot of back-slapping to do – whilst trying to project a general air of “purpose”.

An opposition to the cuts is gradually coalescing. Interest groups, individuals, trade unions are all beginning to make their views known. How effective they will be we’ll soon find out. In the meantime, let’s prepare for the storm.

Endpiece: An obsession with public debt

Why is the new Tory Chancellor of the Exchequer, George Osborne, so obsessed with the fear of public debt?

At the Tory conference he declared that cuts in public spending had to be both fast and deep, to avoid a decade of debt.

Private debt is a different matter. Too many people during the heady years of consumer spending got themselves so heavily into debt that they had no means to pay back what they owed. However, when it comes to a government we are effectively talking about “deferred payment”.

Ironically, George Osborne made his declaration just after it was announced that Germany had finally paid of debts imposed on it after the First World War. True, there were exceptional circumstances. For example, Hitler had his own way with debts. He unilaterally cancelled them.

But Britain emerged from the Second World War up to its ears in debt. It took decades to pay off all that we owed (mainly to the USA). But that didn’t prevent the 1945 Labour Government from building the basis of the welfare state. The National Health Service, universal secondary education and the largest programme of council house building that we’ve known came from that Government. Even then there were those in the Tory ranks who declared that we “couldn’t afford it”. The Beveridge plan and the welfare state would have to be put on hold. But Attlee’s Government saw the building of a new Britain as a priority. And it was the efforts made then that laid the ground for the prosperity most of us enjoyed in the 1950s and 1960s.

There must be few countries today that aren’t in debt to some extent. But different countries have different ways of dealing with it. Few of them have taken the road followed by George Osborne. Most have attempted at least to protect the social fabric of their societies.

There’s more to the notion of debt than the simplistic sums of Chancellor Osborne. Despite the ravages wrought by the bankers, we are not in the position of, say, Greece or Iceland. But for the ideologs in the Tory Party, cutting public spending by up to 40 per cent is a convenient way of cutting the public sector down to the size they want it to be – even if they are wielding a blunt instrument.

To return to the analogy of private debt, a family buying a house on a twenty year mortgage shouldn’t expect to be impoverished as a result. But if they’re expected to pay it all off within five years, that’s a different matter.

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