Leading article: The burden must be distributed fairly

Share
Related Topics

George Osborne cannot be accused of dithering over what he sees as the great, glaring ill of the British economy, the alarming structural deficit. In deference to the sensibilities of his party's Liberal Democrat allies he might have opted for a slower, more drawn-out, approach. Instead, he seems bent on inflicting maximum pain at once. It is a huge gamble and he cannot pretend to be unaware of the risk. A chorus of Keynesian voices, extending well beyond the ranks of the Labour Party seemingly to include the US President, Barack Obama, looks on the pursuit of austerity with suspicion, fearing it will choke off a weak recovery and bring with it a return to recession; the infamous "double-dip" recession of which we have heard so much.

There are precedents for such a dark scenario, not just from the 1930s. Tory austerity policies in the early 1980s sent unemployment rates soaring, placed strains on society from which Britain has never entirely recovered, and made Margaret Thatcher so unpopular that she would surely have lost the next election had not a dramatic victory in the Falklands War miraculously restored her fortunes.

Against those possibilities, Mr Osborne calculates that a now-or-never moment to cut has appeared and that the public is psychologically prepared to swallow unpleasant medicine today that it might not be ready to take tomorrow. The Chancellor may be correct in his estimation of the popular mood. But he should not confuse stoicism with masochism, for the country will only take the unpleasant medicine he is offering if it is convinced there is no alternative.

One danger, therefore, is that the public loses its nerve. Another is that the Liberal Democrats back away. So far, the Tories' greatest political success has been the relative ease with which they have brought their coalition partners along with them. Chancellor Angela Merkel, managing her own, far more fractious, centre-right coalition in Germany, would have every reason to be jealous.

But Nick Clegg's team will only stay onside if cuts are seen to fall on one and all, not just the poor. This is where Mr Osborne's percentages could cause him political trouble, because he has made it clear that he wants 80 per cent of savings to come from cuts in public spending and only 20 per cent from tax rises. This stands to hit the poor the hardest. Moreover, it appears that the tax that is to be put up is VAT, not income tax, which again, is bad news for the poor.

To sweeten the pill for Mr Clegg, Mr Osborne has said he will honour one of the Liberal Democrats' key demands, which is to lift low-wage earners out of income tax altogether. Funding this will obviously cost more money, and it isn't yet clear where the cash will be found. The Chancellor might feel tempted, therefore, to quietly forget about that pledge. He would be most unwise to do so, precisely because it is one of the Government's few fiscal promises that seems designed to help the less well-off. If the Chancellor wants to bring the whole country along with him in his drive to reduce the deficit as rapidly as possible, he should make this one of several changes that cushion the lowest-paid from the worst effects of the coming turbulence.

People are, on balance, probably ready to undergo sacrifices in order to rectify the gross imbalance in our finances. By and large they accept the logic that if drastic action is not taken, Britain's creditworthiness will be threatened while in the long term future generations will be saddled with monstrous levels of debt. At the same time, they want to see the burden shared. If rebalancing Britain's books entails a return to the kind of savage social divisions this country experienced in the 1980s, many will conclude, quite rightly, that this is a price not worth paying.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

C# Algo-Developer (BDD/TDD, ASP.NET, JavaScript, RX)

£45000 - £69999 per annum + Benefits + Bonus: Harrington Starr: C# Algo-Develo...

Senior Data Scientist (Data Mining, Apache Mahout, Python,R,AI)

£60000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Data Sc...

Data Scientist (SQL,Data mining, data modelling, PHD, AI)

£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

Java Developer - 1 year contract

£350 - £400 Per Day: Clearwater People Solutions Ltd: Our client based in Cent...

Day In a Page

Read Next
 

The power of anonymity lies in the freedom it grants

Boyd Tonkin
Rebel fighters walk in front of damaged buildings in Karam al-Jabal neighbourhood of Aleppo on August 26, 2014.  

The Isis threat must be confronted with clarity and determination

Ed Miliband
Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone