The Coalition framed their budget with some very misleading rhetoric, and not just about its distributional impact. They have claimed that a partial and political view of our economic circumstances is an overwhelming orthodoxy. They are dressing up age-old Tory superstitions about state debt as an inevitable response to the economic ‘facts’.
But political economy is never a perfect science. Public budgets are about the distribution of the national income, through tax and spending. Any budget is therefore inherently political as well as economic.
You wouldn’t guess this from the Coalition’s rhetoric. Even though the entire concept of an Emergency Budget is a political manoeuvre, they have presented their cuts and tax rises as economically inevitable.
Depoliticising the budget is a smart political move. It’s about claiming the appearance of consensus, and making austerity an inevitable, ‘centrist’ proposition. The fact that two parties are (notionally) involved, in spite of the Liberal Democrats’ substantial abandonment of their pre-election commitments on the economy, aids the impression. It allows the government to argue that ‘there is no alternative’ politically as well as economically.
The notion that a purely managerial politics can ever exist – that these parties are simply ‘working together’ to ‘get things done’ – is a fantasy. But there is a deeper logic to the Coalition’s rhetorical positioning. They are attempting to monopolize political discussion of economic policy at all levels. Tabloid scaremongering about debt and deficits, and repeated condemnation of Labour’s ‘irresponsible’ spending, is being made to sit with the supposed pronouncements of economic ‘fact’.
There is a rhetorical effectiveness to all this. Superstitions about the proper response to economic downturn determine which bits of an extremely mixed, volatile and fallible evidence-base are mobilized in defence of the Coalition’s actions.
Broadly speaking, there are four main superstitions which underpin almost everything we hear from ministers and government MPs:
- Long-term debt is unnatural and wrong for households.
- States should be governed like households
- The UK’s finances are/were ‘out of control’ and a sovereign debt crisis was inevitable under any other government than this one
- In the current economic climate, there is a clear positive correlation between a tight fiscal policy and investor/consumer confidence.
The first three do not stand up to any sustained scrutiny, but need to be confronted more openly if the argument is to be won at the most elemental level.
Only the fourth is supported by even a section of reputable economic opinion, and this too is far more contested then ministers are willing to concede.
It is hard to work out what the Conservatives truly believe about the economy, and the virtual silence of most Liberal Democrats outside the Orange Book inner circle speaks volumes. Conservative opposition to social democracy and the welfare state is, however, a given – or at least since Thatcherism became the Conservatives’ unchallenged creed.
The long-term objective of the Coalition programme is Thatcherite: to reduce the financial burden on those who tend to vote Conservative by substantially reducing the size of the public sector. The likely dividend of a balanced budget will be poorly targeted tax cuts like the rise in personal allowances, not increased spending on redistribution or improved public services.
They see this crisis as an opportunity to ‘remake the state’. Outsourcing, privatizations and redundancies will undermine even further the basic concept of collective provision of public goods, and compound the weakness of the trade union movement. This government will work very hard to ensure that social democracy is the major casualty of a crisis in neo-liberal economics.
This is the only context in which the Conservative claim that the public deficit is ‘the biggest threat to the recovery’ makes any sense.
Gregg McClymont is MP for Cumbernauld, Kilsyth and Kirkintilloch East, first elected in the 2010 General Election.