The reigning political cliché of the day is that Britain has to cut its public spending fast – and it should start today. This sentiment is intoned by David Cameron with his best lip-biting impersonation of Diana Spencer, and is parroted by political commentators who wave frightening national debt figures in our faces. There's just one problem – it defies everything we have learned about economics since the 1930s recession was unnecessarily turned into a Great Depression. Oh, and as an ugly little coda, we are already starting to see in subtle ways what "cuts" look like – and who pays the price for them.
The cut-cut-cut chorus appears not to have heard of what John Maynard Keynes called "the paradox of thrift". In a recession, it is rational for you and I to cut back on our spending. You holiday at home, put any spending plans on ice and save what you can. So it seems instinctively right to expect governments to do the same. But Keynes showed that if governments cut back at the same time as its citizens cut back, the recession gets even worse. Nobody is buying anything; demand collapses. More people are laid off, and the state has to spend even more in the end.
The people complaining about growing spending and the growing national debt have missed the point. Indeed, Gordon Brown's failing has been in the opposite direction. His recession-time spending – although far better than Cameron's voodoo economics – isn't nearly big enough: he should be boosting the economy far more, paid for with (yes) temporarily higher debt.
Keynes said a stimulus could be spent on anything. At one point, he mooted burying £5 notes and paying people to dig them up. Governments today have a far more appealing option. We need to spend a fortune to decarbonise our economy anyway, to prevent it irreparably trashing the ecosystem. A green stimulus would save us twice over. But the people demanding cuts are speaking louder than the quiet, rational eco-Keynesians – and they are already having a toxic effect. Brown is embarked on some boosted spending, but is sawing off other areas of state expenditure, claiming real victims. This process is worth looking at closely because it shows how the Government cuts now so glibly demanded almost always fall unequally.
The people who caused this crisis – the bankers at Barclays, say – are partying like it's 1999, splashing around grotesque bonuses with our tax money. Meanwhile, the blameless are seeing the services they depend on snatched away. I live in the poorest part of Britain, the East End of London, in the shadow of the reinvigorated towers of the City of London. I've noticed three examples of shrivelling spending that are already hitting the most vulnerable people here. Help for elderly people to stay in their own homes is being sawed off. Imagine you are assessed as having "basic" or "intermediate" needs: it means you are "unable to carry out several personal care or domestic routines", such as washing yourself throughly, or cooking an egg. Now, in more than 75 per cent of the country, you get no paid visitors or supervision any more. You have to wait until you hurt yourself.
Even then, you will now find only overstretched services with little to offer. Prices for meals on wheels have soared under the recession, so the number of elderly people who can afford this one hot meal a day has haemorrhaged away. Three councils – Northumberland, West Berkshire and Wokingham – have cancelled them altogether, except for those elderly people assessed as having their "life in danger". It means a lot of frightened old people who can barely leave their homes – the generation who saved us all from Nazism – are being left a little more lonely and a little more hungry and a little more abandoned.
Another unnoticed target of cuts is Britain's rape victims. This country has one of the lowest rates of rape conviction in the democratic world: barely 5 per cent of rapists end up behind bars. One of the reasons why we manage to convict even that puny dribble is that we have an excellent network of rape crisis centres, where victims can find a safe place to describe what has happened to them, receive counselling and treatment and gather the courage to approach the police. A friend of mine only managed to take her rapist to court after their careful, caring support. But more than 100 local authority services don't have a rape treatment centre at all, and more than half of the existing centres face the prospect of closure owing to funding shortfalls.
The guillotine also fallen on the programmes to help recent immigrants who desperately want to learn English and integrate into British life. In 1998, the Government introduced free English language classes for refugees and poor immigrants. It was an excellent way to give real meaning to the lectures by politicians telling immigrants to learn our language Or Else. It showed that while we (rightly) expect integration, we will help willing immigrants to get there in a spirit of generosity. A typical class member here in Tower Hamlets is Muni Monir, a young Bangladeshi woman sent here to marry at the age of 18, who was bewildered and largely confined to her house. Then she started coming to these classes, slowly learned English and now makes a real contribution to her community, helping her elderly (white) neighbours and co-organising the residents' association.
But today these lessons are being severely curtailed. At Tower Hamlets College, courses have been slashed by half, a pattern repeated across the country. Many of the people who used to come, from Somalian cleaners to Chinese migrant workers, can't any more because fees have been imposed. As a result, they are more likely to be ripped off for less than the minimum wage, less able to report crime and less able to enrich our society with their thoughts and dreams and labour.
These cuts are happening under the local authority control of all three parties, but they are most severe in Tory areas. There will be many more hard-won public programmes choked off by the stale language of belt-tightening. But even if you believed we should have spending cuts in the middle of a recession, would these groups be the first in your firing line?
We are spending £5bn expanding the M25 motorway, even though mountains of research evidence show carbon-belching traffic simply expands to fill the extra space. We are subsidising the airline industry by £10bn a year, even though it is the single most environmentally destructive way to travel, by far. We are spending £20bn on our own stash of weapons of mass destruction, Trident missiles, even though the renewal makes a mockery of the nuclear non-proliferation treaty we have signed. Wouldn't they be better places for savings – to transfer the money into a green stimulus package that will get us back to work?
It's easy to pose as a political hard man by saying we have to face the music and slash. It's hard to make the counter-intuitive Keynesian case for more spending to get us through, but somebody has to. Our pensioners, rape victims and recent immigrants – and the other vulnerable groups waiting in the firing line – can't afford any more of this callous cost-cutting.Reuse content