The Coalition Government’s so-called Autumn Statement (since when was December in Autumn, I wonder?) was, according to Danny Alexander, the last big financial statement before next year’s election. So it seemed appropriate to try and offer some theological reflection on it, as it sets out the stall of both parties (to some extent) in the run-up to what is sure to be an election resulting in a hung Parliament.
There should have been plenty of material to work with. Big infrastructure projects were announced, so we could reflect on stewardship and investment. This included transport infrastructure, so I could have commented on aspects of locality, mobility and identity in relation to a mobile world. (In fact, it is still the case that more than 50% of the population die in the same local authority district that they are born. Mobility is the ‘privilege’ of the minority.) George Osborne tried to steal the wind from Labour on the ‘Mansion tax’ by reorganising the way stamp duty is calculated—and its recalculation is no bad thing in itself. This could have led to reflections on the importance of housing, and of the disaster of commodifying it. The question of non-means-tested benefits has been raised by the opposition; do the wealthy retired really need the winter fuel allowance in order to heat their swimming pools? And it might have been timely again to raise the question of a ‘free to recipient at point of delivery‘ question about the NHS again.
But all of these issues were overshadowed by the one massive issue which is hardly beginning to be discussed by politicians: we still have not made the major, structural adjustment that we need to to live within our means. When I say it was not discussed by politicians, perhaps it was, a little, but only when pushed by those reporting in the excellent coverage by the BBC (the news, Newsnight, and discussions on Radio 4’s Any Questions were my evidence).
Evan Davies’ introduction to the issue on Thursday’s Newsnight was wonderfully lyrical whilst still being informative and penetrating—I think he has already justified his appointment as a worthy successor to Jeremy Paxman. In his budget statement, George Osbourne singularly avoided mentioning the central failure of his period in office: that the annual deficit in Government spending will not be met by next year, as promised. This is despite the use of this goal as a justification for spending cuts which trucked no compromise. In fact (someone commented to me—is it true?) this Government has not only failed to stop borrowing, it has borrowed more than all previous Governments put together, so that the national debt (the accumulation of successive annual borrowing) has now passed £1.4 trillion. I am not sure we have grasped the significance of this. Davis put it starkly:
You have to go back to Great Depression of the 1930s to find a crisis comparable with the one we are in. This is a once in a lifetime event. We have, as yet, failed to fundamentally reset our expectations of what can earn and how we can earn it.
As many commentators point out, this is in part due to the strange nature of the ‘recovery’. The economy appears to be growing, and yet wages are not increasing (even though employment is) so tax revenues have not increased as expected. Wages have stayed still or fallen every year since 2007. And how far back do you have to go to find the last time this happened? Just look back 140 years to 1874.
Part of the history of this is the banking crisis and the global economic slowdown which, if not the direct cause of the problems we have, were certainly the things which brought the problem to the surface. Again, as Davis pointed out quite clearly:
It’s not really Mr Osborne’s fault that we haven’t got out of the hole yet, just as it wasn’t Mr Brown’s fault that we fell into it in the first place.
If only politicians on both sides were as candid. And herein lies problem number 1—the lack of honesty about what has happened, even the lack of admission of the facts of the situation. Nick Robinson ended his report on the Thursday evening news with the challenging conclusion:
It’s not the budget deficit we should be worrying about, but the candour deficit.
In our tribal political system, no-one is yet really facing up to the truth; both sides are still trying to score points from the other. One bizarre consequence of this is the pickle Ed Balls, Shadow Chancellor, has got himself in. John Hymphrys nicely skewered him on Radio 4’s Today on Friday morning:
So what you are saying is, we are now in the place we would have been if Labour has been voted in? You are criticising Mr Osborne for his investment decisions, and you are committing yourself to make future cuts in Government spending?
It’s an odd day when Labour criticise the Conservatives for adopting their policies, then commit in turn to adopting Conservative policies for themselves!
This leads to the second major problem we are faced with. According to the politically-neutral Institute of Fiscal Studies, in order to eliminate the annual deficit—that is, to stop increasing the level of borrowing—by 2020 (which both sides have committed to), the country faces ‘gruesome’ levels of cuts for the foreseeable future. This would mean reducing non-protected departments’ budget by 30%, 40% or even 50%—which includes transport, defence, and policing as part of the Home Office. Without any proper consultation, this would have to mean a fundamental change in the role of Government in our nation. You cannot simply cut in half what is spent in an area without radically altering what you are trying to achieve. All this is at a time of continued and growing inequality between the the richest and the rest. It is remarkable that, whilst wages have not increased in seven years, the super-rich have continued to get richer.
All of this is predicated on no increases in tax rates; this is the Conservatives mantra, and Labour still feels it has to match this out of political expedience in the post-New Labour era. After all, how can you increase taxes when pay is not increasing, and won’t that just choke off economic growth anyway?
If austerity is too severe, and tax increases won’t work, is there another way forward? It is not insignificant that references are being made back to the Depression. The countries that pulled out of that most effectively were those which invested, usually in national infrastructure projects. The legacy of these are still being felt today; the Hoover Dam in the US was one product of this, and the Sydney Harbour Bridge is another. Britain is generally reckoned to have poor infrastructure which badly needs investment; this is the time to address it. This would require a basic change in outlook. It would signal the end of the Thatcherite experiment, where growth is fuelled by consumer spending based on increasing credit, and would instead look to economic growth based on strategic investment.
It is important to note that these issues—honesty of reporting, recognition of the real issues, inequality, debt, the role of Government, and investment—are not party-political issues, not least because they do not divide on party lines. Added to that, each has a moral, and therefore a theological, dimension.
In Old Testament, the role of the king, the ‘secular’ power, was to reflect the priorities of God—in particular to protect the widow and the orphan and to see justice done—and to be accountable to the people in doing so. Very often, this accountability functioned through the voice of the prophets, who by-passed the structures of power in order to proclaim reality and God’s perspective on it. Christians and the Christian churches need to continue this prophetic tradition. We need to see the real impact that real decisions are having on real people—and to be speaking God’s perspective on it.
Additional note: There is an excellent interview with George Osborne by Nick Robinson just added to the BBC site. Robinson summaries an important part of the interchange:
The chancellor claims he is being straight with voters over spending cuts but he is reluctant to spell out the consequences of returning to levels of spending as a share of national income not seen for 80 years.
I asked him about the scale of job losses – estimated by the Office for Budget Responsibility to be one million on top of the 500,000 already cut.
The number would depend, he told me, “on the decisions we are prepared to take on pay”.
The key moment, in relation to the question of candour, comes here:
Q: “You say that people should be straight with the public – are you going to be straight? Let’s test it? Do you agree with OBR that there could be 1 million jobs in public sector lost, or at least hundreds of thousands?
A: “Jobs have already had to go. Can reduce number needed to go if we take difficult decisions on public sector pay. Not always popular but have protected employment.”
Q: “Half million gone already, right to say at least as many again will go?
A: “Depends on decision prepared to take on pay. If we go on taking realistic decisions on public sector pay, then can afford to have people in sufficient numbers in the public sector doing jobs we ask of them. And this is against backdrop of growing economy where hundreds of thousands of jobs created in the private sector and where up to a million more created.”
Q: “You say be realistic – you’re talking about real pay cuts for every public sector worker for at least another four years.
A: “This country has to live within its means. Have to have a government we can afford..”
Q: “I’m asking you to spell out what that means for ordinary people, it means real pay cuts for four years.”
I think this will be a key issue in next year’s election.
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