Public spending cuts: the left emerges victorious in the first round of the battle
Back when cuts mania was all the rage during the conference season of 2009, only the TUC, others on the left and serious commentators like Martin Wolf argued that cuts came with major economic consequences. The TUC argued particularly strongly that to start measures to address the deficit when the economy was still fragile threatened a double dip recession. These views were of course rejected by the small state right in the form of the Institute of Directors, the Taxpayers Alliance and the Conservative Party itself.
Now it seems a new consensus has emerged in line with the view that cutting while the economy is weak is a recipe for disaster. All three main parties now agree on this since the Conservatives announced over the weekend they would not take any significant deficit measures until 2011.
The big fight now is to convince the parties that after 2011 the sensible approach is to address the deficit through economic growth and innovative taxation policies rather than by destroying the quality of public services and chucking thousands of public servants on to the dole. This will again be rejected as insufficiently tough etc. etc. but the same was said back in September 2009.
We can make a good start by pointing to the current cuts in Higher Education. This is a disaster for the long-term future of the UK economy which will have to rely heavily on the strength of its knowledge led sectors to compete in the global marketplace. We are playing off short-term fiscal policy against long-term economic policy – a massive error which will do nothing to benefit the public finances, let alone the economy, in coming years and decades.