The party that cuts off its nose to spite its face.
It always happens. Just when you think a point of no return has been reached, something comes along and proves there are always new depths to be plumbed. Yes, politics really has just got even stupider.
Why it surprises each time is a mystery considering the way politics has been conducted over the past 5 years. As Paul Krugman in the Graun today set out, the entire defining media discourse of the last parliament has been based on assumptions that don't stand up to scrutiny. Yes, the deficit does have to be reduced, but the time to do so is the boom, not when the recovery has barely started. Britain has never been in a position even remotely like Greece's, nor is it any danger of being so when we control our own currency.
By the same measure, the Tories' entire pitch to the country is built on a lie. They claim to have rescued the country from Labour's Great Recession, and yet as yesterday's GDP figures made clear, the recovery, such as it is, has been built mainly on continued consumer spending rather than the rebalancing away from financial services originally promised. Despite record low interest rates the economy has not bounced back in the way it has from past recessions, suggesting this time might be different. This could be partially down to said austerity, or it could be what has been called secular stagnation, where the economic growth we were previously accustomed to becomes all but impossible due to various factors including a decline in the working age population and technological advances no longer leading to improvements in productivity.
Either way, to be proposing now is the time for "colossal" cuts as the Tories are, especially when growth is threatening to come in lower than forecast is at best daft and at worst positively dangerous. Up until today most economists and commentators had concluded they didn't, couldn't really mean what they say. It's to keep the hardliners onside. It's to be negotiated away come the talks on forming a new coalition. Osborne relented once he realised austerity was having the precise opposite effect to the one he claimed it would. It would be impossible to make the "savings" they're proposing without putting up taxes.
Only, such is the apparent Tory desperation at how their message doesn't seem to be getting through, now the promise not to put up VAT, income tax or national insurance will be enshrined in law if they win the election. This is so completely deranged it takes a while to sink in. We've previously had Osborne trying to "trap" Labour by legislating to cap benefit increases for those of working age to 1%, and they've since put in law the very outline of their spending plans. This though is something else: quite apart from how it seems to be the Tories admitting there's so little confidence in their ridiculous sums they need to make it illegal to not follow their pledge to get people to believe them, it leaves Osborne with next to no room for manoeuvre in the event of another crisis and closes the door totally on much in the way of alternatives to the mooted cuts.
Laws can of course be repealed, but that wastes time that might be of the essence in a genuine emergency. As a gimmick, which is exactly what it is, it's a self-defeating one. The obvious assumption is it would be something else negotiated away in coalition talks, which again raises the question of why you would make such a promise only then to drop it at the first opportunity, exactly the sort of move that invites cynicism. Are the Tories that panicked by how the polls still aren't shifting, with the most likely outcome remaining a minority Labour government into thinking something, anything that convinces a few more people of their sincerity is worth it, regardless of the all the downsides of such a bill?
Apparently so. Why though do such a thing when it finally looks as if the Tories' bluff on their proposed £12bn in welfare cuts is being called? The IFS, as exasperated at the main parties' lack of candour in their manifesto as it ever gets, outlined to get anywhere near that figure (PDF) at the same time as protecting pensioner benefits would mean the absorption of child benefit into universal credit, which would save £5bn, while requiring housing benefit recipients to pay at least 10% of their rents could save a further £2.5bn, still leaving a £2.5bn shortfall. Labour, in what has been a pitifully underreported press conference this morning, overshadowed somewhat admittedly by Miliband's soiree with Fey Guevara, put out their own take on where the axe would fall, deciding cutting tax credits was just as likely, saving £3.4bn along with the aforementioned child benefit cuts. Tonight Danny Alexander in an apparent valedictory move ahead of the likely loss of his seat to the SNP has given the Graun Iain Duncan Smith's "Welfare Reform Quad Summer Reading Pack" from 2012, when the coalition was arguing over whether to carry on with Plan A. Again this focuses on child benefit, with IDS having suggested limiting it to two children, removing the higher rate for the first child, removing it altogether from 16-19-year-olds, and finally means testing it, which all told would save £8bn.
The IFS was far from complimentary about Labour's own failure to outline cuts that would save money as opposed to the equivalent of pennies in government spending terms, but then Labour's plans are such that as the IFS has said, they've left themselves enough room for manoeuvre as to barely cut spending at all if they so choose. The Tories have now had 2 years to come up with something resembling an outline of where they would make their savings, only to respond every time they should be trusted to do so based on their record. Their record, as we've seen, has been to sell the country the biggest of lies. That they've gotten away with it, while an indictment of Labour and a servile media, only makes it all the more remarkable they've now been reduced to one of the most idiotic and cutting off their nose to spite their faces gestures in recent memory. It will be nothing compared to the effect on the country if we end up with a Conservative majority that governs as it says, mind.
Why it surprises each time is a mystery considering the way politics has been conducted over the past 5 years. As Paul Krugman in the Graun today set out, the entire defining media discourse of the last parliament has been based on assumptions that don't stand up to scrutiny. Yes, the deficit does have to be reduced, but the time to do so is the boom, not when the recovery has barely started. Britain has never been in a position even remotely like Greece's, nor is it any danger of being so when we control our own currency.
By the same measure, the Tories' entire pitch to the country is built on a lie. They claim to have rescued the country from Labour's Great Recession, and yet as yesterday's GDP figures made clear, the recovery, such as it is, has been built mainly on continued consumer spending rather than the rebalancing away from financial services originally promised. Despite record low interest rates the economy has not bounced back in the way it has from past recessions, suggesting this time might be different. This could be partially down to said austerity, or it could be what has been called secular stagnation, where the economic growth we were previously accustomed to becomes all but impossible due to various factors including a decline in the working age population and technological advances no longer leading to improvements in productivity.
Either way, to be proposing now is the time for "colossal" cuts as the Tories are, especially when growth is threatening to come in lower than forecast is at best daft and at worst positively dangerous. Up until today most economists and commentators had concluded they didn't, couldn't really mean what they say. It's to keep the hardliners onside. It's to be negotiated away come the talks on forming a new coalition. Osborne relented once he realised austerity was having the precise opposite effect to the one he claimed it would. It would be impossible to make the "savings" they're proposing without putting up taxes.
Only, such is the apparent Tory desperation at how their message doesn't seem to be getting through, now the promise not to put up VAT, income tax or national insurance will be enshrined in law if they win the election. This is so completely deranged it takes a while to sink in. We've previously had Osborne trying to "trap" Labour by legislating to cap benefit increases for those of working age to 1%, and they've since put in law the very outline of their spending plans. This though is something else: quite apart from how it seems to be the Tories admitting there's so little confidence in their ridiculous sums they need to make it illegal to not follow their pledge to get people to believe them, it leaves Osborne with next to no room for manoeuvre in the event of another crisis and closes the door totally on much in the way of alternatives to the mooted cuts.
Laws can of course be repealed, but that wastes time that might be of the essence in a genuine emergency. As a gimmick, which is exactly what it is, it's a self-defeating one. The obvious assumption is it would be something else negotiated away in coalition talks, which again raises the question of why you would make such a promise only then to drop it at the first opportunity, exactly the sort of move that invites cynicism. Are the Tories that panicked by how the polls still aren't shifting, with the most likely outcome remaining a minority Labour government into thinking something, anything that convinces a few more people of their sincerity is worth it, regardless of the all the downsides of such a bill?
Apparently so. Why though do such a thing when it finally looks as if the Tories' bluff on their proposed £12bn in welfare cuts is being called? The IFS, as exasperated at the main parties' lack of candour in their manifesto as it ever gets, outlined to get anywhere near that figure (PDF) at the same time as protecting pensioner benefits would mean the absorption of child benefit into universal credit, which would save £5bn, while requiring housing benefit recipients to pay at least 10% of their rents could save a further £2.5bn, still leaving a £2.5bn shortfall. Labour, in what has been a pitifully underreported press conference this morning, overshadowed somewhat admittedly by Miliband's soiree with Fey Guevara, put out their own take on where the axe would fall, deciding cutting tax credits was just as likely, saving £3.4bn along with the aforementioned child benefit cuts. Tonight Danny Alexander in an apparent valedictory move ahead of the likely loss of his seat to the SNP has given the Graun Iain Duncan Smith's "Welfare Reform Quad Summer Reading Pack" from 2012, when the coalition was arguing over whether to carry on with Plan A. Again this focuses on child benefit, with IDS having suggested limiting it to two children, removing the higher rate for the first child, removing it altogether from 16-19-year-olds, and finally means testing it, which all told would save £8bn.
The IFS was far from complimentary about Labour's own failure to outline cuts that would save money as opposed to the equivalent of pennies in government spending terms, but then Labour's plans are such that as the IFS has said, they've left themselves enough room for manoeuvre as to barely cut spending at all if they so choose. The Tories have now had 2 years to come up with something resembling an outline of where they would make their savings, only to respond every time they should be trusted to do so based on their record. Their record, as we've seen, has been to sell the country the biggest of lies. That they've gotten away with it, while an indictment of Labour and a servile media, only makes it all the more remarkable they've now been reduced to one of the most idiotic and cutting off their nose to spite their faces gestures in recent memory. It will be nothing compared to the effect on the country if we end up with a Conservative majority that governs as it says, mind.
Labels: Conservative-Liberal Democrat coalition, David Cameron, economics, Ed Miliband, election 2015, Labour, politics, Tories
| Permalink
Post a Comment