Steve Richards: The need for distance from the unions

What always happens in relation to public spending is that, when specific areas are examined, various, unlikely figures, find that they are wary of cuts
Click to follow
The Independent Online

Even though the term "moderniser" is the most fashionable in British politics, the debate about public spending is predictably backward looking. On the one hand the Treasury demands sweeping cuts to be agreed by next month. If ministers respond with even greater speed they are rewarded with a place on the so-called Star Chamber that will agree other spending reductions. Pace and depth of cutting is the overwhelming priority. The implications for policy are secondary. Across Whitehall the rush is on. Find the cuts! There is not much grown-up debate about what the state can or should be doing, which is a shame as some ministers have interesting ideas on the subject. There is no time. Instead machismo wins the day.

George Osborne has decreed that the rush is unavoidable. Already, haste has swept aside principle. In his emergency Budget the Chancellor declared sensibly that he would protect capital spending. Within days Michael Gove announced the scrapping of the schools building programme, a specific example of planned capital spending. Even Tony Blair in his memoir supported the schools building programme, a sign that in his desire to please the Treasury Gove must have leapt well beyond the orthodox right, a area of the political spectrum where the former prime minister has found his comfort zone.

Meanwhile in Manchester, trade union leaders play with aplomb the roles allocated to them by parts of the Coalition. Learning nothing from the 1980s, they plan protests against "the cuts", and threaten strikes, on the assumption that voters will be on their side. For them there is no room for nuance and no considered strategy about how they might find more effective ways to constrain the government and secure the support of public opinion. Instead industrial action is threatened that will damage the lives of the poorest and make the government's task easier. If Bob Crow believes that strikes are popular with the voters he obviously did not spend much time in London last week, when his union brought the Underground system to a standstill. From my experience few of us tortured travellers were condemning the government or the Conservative Mayor of London for the disruption.

In both cases the surface arguments – Cut now! Down with cuts! – obscure important, subterranean debates. What always happens in relation to public spending is that, when specific areas are examined, various unlikely figures find they are wary of cuts. The Mayor of London, Boris Johnson, warns of precipitate cuts and goes out of his way to protect capital spending projects. In doing so he almost becomes a Keynesian. Johnson has told the Treasury that London is the engine that drives the rest of the economy. The engine is dependent on investment in its still creaking infrastructure. The cuts would be counter-productive and damage the driving force that lifts the entire country. No wonder Ed Balls claims him as a supporter.

Yesterday the Defence Select Committee warned against cuts arising from the current Strategic Defence Review. Conservative MPs from the committee rushed on to the airwaves with dire warnings of what might follow. At almost the same time they were putting the case for public spending, the Welfare Secretary, Iain Duncan Smith, was telling another committee of MPs that he did not recognise the figure of £4bn worth of additional cuts that had attracted feverish headlines last week. The source for the figure had been the Chancellor, George Osborne, in a BBC interview. No one quite knows where Osborne got this figure from, and it seems a superficial way of approaching the complex and sensitive area of welfare reform. Duncan Smith is more serious about the subject and knows that some of his proposals, if implemented properly, would cost money in the short term. He put the estimated increase before the last election at around £3bn. He will not get such largesse and must find reductions, but he will do so knowing that this is not the route he initially hoped to navigate. All of them – Boris, IDS and Liam Fox – are discovering the case for public spending.

Two contradictory factors combine to make the current spending review so old-fashioned, although more sweeping and deeper than any that has preceded it. First, David Cameron made a series of spending pledges before the election that he would now almost certainly like to ditch, especially those relating to universal benefits, such as winter fuel payments and free TV licenses. Electoral expediency drove him on. Now an ideological dimension drives the government. Cuts are good. Spending is wasteful.

What a shame there was no space in the minds of impatient ministers to examine more forensically where the last government wasted money and where it was productively spent. There is a strong case for targeting benefits, but the argument has to be won and the practicalities explored. Means-testing can be costly. Sadly, no time is permitted for such exploration. The impatience will prove to be expensive. In each policy area, from Britain's place in the world to the role of local government, debate is replaced by a figure, the level of spending agreed in the next frenetic weeks. For most voters, figures are understandably incomprehensible. The policy arguments about the role of a modern state are drowned out by a rush to wipe out the deficit.

In their counter-intuitive scepticism, Boris Johnson and Tory MPs battling to protect spending are doing more to test the government's will than the trade unions. Others who have also made more of a mark include former Liberal Democrat leader Charles Kennedy, who knows that the rattling of bars from within the Coalition's frail walls demands sensitivity, but it is still a potentially powerful rattle. The party's deputy leader, Simon Hughes, might be another rattler but he opts for unswerving loyalty for now.

The unions could be helping this diverse group to win a political argument in a hung parliament, and across a media that is by no means uniform in its support for the Government's approach. Instead some of them posture with a hint of menace. They are not on especially strong ground. There is waste and over-staffing in the public sector that cannot be defended indiscriminately. There is at least an argument that millionaires should not get child benefit. Yet in Manchester some of them seem more concerned to make sure that the next Labour leader joins them on a march against "cuts".

I have argued more than once in recent weeks that Ed Balls has framed the economic debate most effectively, and not only from his party's point of view. Balls has argued with the confidence of a trained economist that growth is threatened by the government's hunger to wipe out the deficit in a parliament. But even Balls accepts some cuts are required and even without the financial crisis it is highly likely that Labour would have lost the election, perhaps by a wider margin, on the grounds that voters felt some public money was being wasted.

The task of the next Labour leader is to expose the weaknesses of the Coalition's impatience for cuts, in informal alliance with many Lib Dems and Tories, while winning the argument over who has the most credible position. It will not be easy, but is by no means impossible. This means the new leader needs to assert independence from those union leaders in danger of becoming more unpopular than ministers crusading about cuts. I believe that whichever Miliband wins will seek to establish distance. Failure to do so will mean a lost argument to be followed by a lost election.