Dear Nick Clegg,
Your government has made deficit reduction its number one policy goal. In a major interview with The Observer you say ""Our collective memory of difficult budget decisions all hark back to the harshness of the 1980s. That is our folk memory ... We're going to do this differently. We're not going to do it the way we did in the 80s.". You speak about about making progressive policy choices to ensure fairness, the importance of widespread debate and consultation, and ensuring the government does not "allow a great north/south divide to reappear like in the 1980s" by being very sensitive to the danger of cuts falling heavily on areas most dependent on public spending.
These are all welcome aspirations that all spending and cuts decisions will and should be taken with significant priority given to their distributional consequences. You have set a clear "fairness test" for the public spending and deficit reduction choices made by government, and for public scrutiny of those choices.
I am writing to suggest some important practical steps that the government would need to make to show that this commitment is at the heart of its own decision-making about public spending, and to inform public debate and scrutiny of their fairness impact, around this summer's emergency budget and ahead of the autumn Comprehensive Spending Review.
Firstly, could you please advise on what practical steps you and your colleagues in government are taking, both within individual departments and in the Treasury, to ensure that the distributional impact of different possible policy choices about spending cuts and deficit reduction are a central and mainstream focus of policy analysis and decision-making about public spending?
Secondly, the government would also need to make significant changes to the information which it publishes about public spending to meet the aspiration of a more informed and engaged public debate.
The Treasury Red Book contains information on the distributional impact of taxation changes proposed by government. This facilitates public discussion about who is better and worse off from any particular changes in taxation, which is presented in accessible and digestible form for example in newspaper tables about the distributional impact.
The government does not, however, at present, publish detailed analysis on the distributional impact of public spending: doing this when announcing the results of the spending review will be essential to enable scrutiny of your commitment that cuts will not fall most heavily on those people and areas which are most vulnerable. The government has committed to increased transparency to inform public debate about spending, by publishing individual items of government expenditure, but it has yet to announce any plans to publish greater information about the distributional impact of public spending.
A commitment to publishing the fullest possible information about this should surely follow from your commitment to meeting a fairness test while reducing spending.
Doing this would enable the government to demonstrate how distributional fairness had motivated and guided its own policy choices, and would also facilitate the public debate about fairness which you identify as crucial to seeking a political and social consensus on deficit reduction plans.
I would like to know whether you would support that principle about how to better inform political and public debate about fairness and public spending, and what steps the government proposes to take in this area ahead of the Comprehensive Spending Review this Autumn.
The Fabian Society will ourselves be publishing new research on the distributional impact of public spending this summer, and look forward to engaging further in this important debate about how fairness can be at the heart of decisions about spending and deficit reduction.