In the US there has been a fuzzy sense of admiration for the new British Conservative-Liberal coalition government, but over here the sweet liberal-scented haze has now parted and we are Camer-on. The Prime Minister and his finance spokesman George Osborne this week showed the first flick of their knife, marking out the areas they intend to cut much more deeply into over the next five years. Who have they decided can afford to take the pain first? Not rich people like them: they will continue to enjoy big state subsidies to build up their savings and maintain their estates. No. Step forward instead the unemployed, poor kids who are falling behind in their reading, children in care, the elderly, the disabled, and any feeble little steps we were making towards building a low-carbon economy.
Very few people in Britain would say our first move during a recession should be to shut down programmes that get the growing number of young people with no qualifications or training into their first job. Yet that is what the Conservatives have done. I've seen in my own part of east London how the Future Jobs scheme takes demotivated and lost kids and gets them into paid, on-the-job training for six months. It was too small, for sure - but now the programme has been abolished altogether, along with the £1,000 subsidy for employers who take on anyone who has been on benefits for more than six months. The Tories say they are not making cuts to "the front line" - but don't the long-term unemployed, stuck on £60 a week, live on the front line of British life?
The next set of cuts is well disguised. When you hear that the Communities Department has taken a 27 per cent cut, it sounds anodyne: what is it anyway? It's the money that goes to local authorities to pay for home help for the elderly and disabled, for monitoring children at risk, and children in care. Osborne has said he doesn't want councils to make up the difference by increasing council tax. So, very soon, there will be a big increase in the number of confused old people left unwashed and untended, and abused kids we never find in time.
Many of these cuts will end up costing us money in the long term. Over the past few years, children - mainly in poor areas - who have not been able to learn to read have been given special one-on-one tuition to get them up to a decent standard, rather than tumbling through their school years getting more confused and angry. Literate people are far less likely to commit crime and much more likely to pay taxes later in life. Cameron just closed the programme. The same child who loses her reading tutor now also won't get a small Child Trust Fund of £2,000 when she turns 18 - thanks to a Chancellor of the Exchequer who lives on an £4.2m trust fund of his own.
David Cameron's claims to care about global warming also just drowned. The subsidy to build wind turbines, the encouragement to buy electric cars - all gone. His massive cuts in the transport budget will make the trains and buses worse, pushing more people into their cars. They have even cut our low spending on flood defences - a bad idea on a stormy island as we go into a century where sea levels will rise.
Of course, the Cameroons say they have no choice but to do all this, because we are "bust". There is currently a £178bn-a-year gap between what the Government takes in, and what it spends. But there are two crucial questions here: when the Government should close this gap, and how it should close it.
It seems logical to pay off a debt as soon as possible. That's what you and I, as individuals, should do. But everything we have learnt about economics since the 1930s shows that behaviour that is rational for an individual will be disastrous for a government during a recession. At a time like this, consumers naturally spend less, causing demand to fall. This causes the economy to get worse still. This spiral can only be broken by the government borrowing and spending money to get the economy moving again. The reason why our Great Crash hasn't been followed by a Great Depression is because governments have done just that.
Now Cameron wants to stop the stimulus. That's what Franklin Roosevelt did in 1937 - and it triggered a collapse, requiring far more state spending in the end. FDR cursed his mistake. The economists who were most prescient about the dangers of the 1990s, including Nobel Laureates Professor Joseph Stiglitz and Professor Paul Krugman, say there is little risk of Britain going the way of Greece, since our national assets are vastly more valuable, but there is a big risk of a double-dip recession being Os-born from these policies.
Better a deficit than a depression. Better to pay interest tomorrow than the dole to millions more today. And when the time for closing the gap does come, there is a much better way to do it - by closing the income gap. The first people to pay should be those who can afford it: the wealthy. For example, the 1,000 richest people in Britain have added £77bn to their wealth in the past year alone. Can't they afford to make sacrifices a little more easily than a 17-year-old on the dole?
It looked at first like the Liberal Democrats had managed to inject a serious piece of progress into the Tory programme by insisting on an increase in Capital Gains Tax back to 40 per cent. This would hurt only wealthy people with shares and second homes. But there are signs that Osborne is now backing off from this pledge after a rebellion from the Tory backbenches, who - hilariously - say it hits "the middle class". The median income in Britain is £23k a year: how many of them own second homes? This policy is a key test of whether the Lib Dems really can tame the Tory right.
One obvious next step would be to restore the top rate of income tax to the level it was for the first decade of that notorious red, Margaret Thatcher: 60 per cent. The right says people will leave in droves and the Exchequer will end up with less. But they said that when the last government increased the top rate to 50 per cent - and it turned out that the number of rich people leaving actually fell by 7 per cent.
There are many other creative ways to raise extra funds. In California, they are about to hold a referendum on legalising and taxing cannabis - a move that would bring in $1.4bn in revenue, and save over $20bn in pointless police prosecutions and imprisonments. Governor Arnold Schwarzenegger is a fan: will former cannabis smokers Cameron and Clegg do the same?
And cuts? The entire bill for the current wave could have been covered simply by ending the war in Afghanistan, which more than 60 per cent of British people say is "unwinnable". Over the long term, we will have to pare back more of our massive military spending, which more often simply stirs hatred against us than it does any good.
And there is a smorgasboard of subsidies for the super-rich waiting to be dismantled. To pluck one random example - why do we give the Duke of Westminster, who is worth £5bn, an estimated £326,000 a year to "maintain" his land?
But Cameron has not chosen any of this. He has chosen instead to start his slashing early, and to target it the weakest and the greenest. Prime Minister, the 1980s are calling - and they want their dogma back.
Johann Hari is a writer for the Independent. To read more of his articles, click here or here.
You can follow Johann at www.twitter.com/johannhari101
Follow Johann Hari on Twitter: www.twitter.com/johannhari101
It doesn't surprise me much when it happens in the UK. After all, the UK has been eating its poor, or trying to, for centuries; Wat Tyler and the Peasant's Revolt come to mind.
But it's becoming entrenched here in the US, aided by the corporate control of what has become a single party: the Corporate Party. I'd say that in both nations, people need to take to the streets. The rich sometimes need a reminder that we do, in fact, share the same countr(ies).
Here in California the so-called governator wants to do away with welfare completely. California, with about the same population as Canada but with a higher GDP, can't eve afford to offer its' citizens the basic needs of life because it refuses to tax the people who have the money.
This level of right-wing cynicism is beyond a joke now.
We reveal the guilty men living fat on the back of MPs' expenses....
http://nbyslog.blogspot.com/2010/05/new-shock-as-telegraph-reporters.html
Whenever the Tories come to power, the first thing that you get is a massive rise in unemployment, this time will be no different. And the danger with the current policies is that you will get deflation on a massive scale. End to the recovery, back to the recession. Short and not very sweet.
Labour comes to power 1974, IMF called in 1976
Labour comes to power 1997, country bankrupt 2010.
You can make trend data mean anything you like. Why not just accept you lost, and move on?
At the same time it is legitimate comment to point out that unemployment always rises (and did not fall below the level they inherited in 1979 until 1994 - despite numerous attempts to rig the statistics) when the Tories win.
And there are plenty of economists who will agree about the point on deflation and the return to recession, including an instance quoted on here the other day.
Make the royal family give up most of their money to fix everything that needs fixing in the United Kingdom. I can't identify anything that the Windsors - one of the wealthiest families on earth - have done that merits any praise. By giving up just a little of their spoils, they could probably endow every British citizen and organization for years to come.
Or would Elizabeth call the UK population a bunch of welfare queens if she had to do that?
David Laws and James Lundie.....
http://nbyslog.blogspot.com/2010/05/developing-story-who-shopped-david-laws.html
All the cuts you mentioned may effect the services you mention, but it is purely conjecture (whereas you make it sound like fact). The previous government hired to many people in taxpayer funded jobs, and taxpayer funded NGOs squandering to much money.
You list all the things that the £6 billion in cuts 'COULD' hit, and make it sound disastrous. You suggest to borrow more money. Well how about this, if the previous Labour government had not borrowed so much we would not have had to pay between £24 billion to £36 billion a year in interest every year, for the last 13 years. That money has vanished, gone, paid for nothing, done nothing, just wasted interest payments. Imagine what that money could have done for the economy £24 billion to spend on services instead of the £6 billion cuts you think are so bad.
So vent you ire at the people who maxed out our credit card, then left the red letters unopened as we struggle to pay of the minimum payments for no benefit.
In an earlier comment, you were correctly and passionately advocating for the voters to think strategically so that a coalition government could be contrived. Well, this it what it looks like. It is painful to be sure, but you would I hope concede that it is better than a majority Conservative government. Be happy it is not worse.
So my question is this: many knew that the incoming government was inheriting - as one British commentator put it, a poisoned chalice.
So what will the rank and file Liberal Democrats (most importantly their voters) do? The party leadership has it nice, they are in government for the first time in generations.
But what happens with the next election: will all those voters simply defect to Labour as the only center-left alternative?
Because all these decisions, though they may be Tory made, will be stuck to the banner of the LibDems as well: they ARE, after all, a member of the governing coalition.
So what do their VOTERS get out of it? Are they seeing this as a betrayal of LibDem principles? Will they defect to Labour?
And if the Tories go too far, how long will this coalition last?
It still is possible to find them, but increasingly rare.
"So what will the rank and file Liberal Democrats (voters) do?" and "So what do their VOTERS get out of it? Are they seeing this as a betrayal of LibDem principles? Will they defect to Labour?"
I think that most voters display a depressingly predictable form of brand loyalty to a party, and during the next general election will return to the fold.
Lastly you asked ...
"And if the Tories go too far, how long will this coalition last?”
Britain does not have a great deal of experience with coalition governments. And most observers incorrectly assume that the coalition government is a weak structure. Consequently they falsely assert that it is only a matter of time before this marriage of convinience will fail. Coalition governments can display a surprising amount of resiliency. Often lasting for a few years. Based on the experience of other countries who are ruled by a Parliamentary system I would wager that this coalition government will not fail any time soon. I would expect it to last for a few years. It will topple when the parties involved see more by embarking on an election campaign than they do by remaining members of the government. Having just gone through an election I would think that the electorate would resent being ask to pay for/and participate in another election so soon.
Start promoting effecient markets, entrpreneurs, pro growth polices, and the UK's problems as well as the USA's and the globe will disappear.
But, then again, it's all about social Darwinism with them.
http://riverdaughter.files.wordpress.com/2009/05/trickle-down-economics.jpg
Any economic system where one group reaps the benefit and another group incurs the cost is not sustainable in the long run.
And you can apply that same principle to BP Oil vs. the Louisiana fishing and tourism industries.
Or the middle class spending tens of thousands of dollars to educate themselves for low-paying jobs.
What they probably will do is slowly underfund it, and thus worsen quality of care.