Let’s not be afraid of cuts
Author: Steve Bundred, The Observer |
The British problem, so the aphorism has it, is that we want Swedish levels of public service with US levels of tax. So do the Swedes. That’s why, during a fiscal crisis with many parallels to our own – when the Swedish Social Democratic Party, then in opposition, promised spending cuts to eliminate a huge budget deficit – its electoral support fell five percentage points.
That was in 1994. The Social Democrats had 50% support leading up to the vote. On election day this dropped to 45%, but the party still won a comfortable majority. They then delivered on the promise to cut spending, and public finances were swiftly brought back to balance. It is an instructive tale. But for British politicians it is not the recovery that is important – but voter reaction to the threat of cuts. That is why neither ministers nor opposition frontbenchers will be completely candid in the run-up to an election. With no party sure of even 40% of the electorate, the outcome is too uncertain for politics not to trump transparency.
The rest of us don’t share these concerns. So we can be more honest. First, let’s dismiss the notion that the choice facing voters next year will be between cuts and investment in public services. Both parties know savings are necessary and they may need to be greater than the mooted 10% of current spending levels. So the real choice is of different views about the balance to be struck between tax rises and spending cuts – and where they should fall.