Tuesday, September 29, 2009

The people against the powerful

In his book 'the Unfinished Revolution', Phillip Gould wrote about how he felt sick listening to people in his focus groups talk about how they would be happy to pay more tax to improve public services. It was an early example of how New Labour wasn't always prepared to pay close attention to what was popular or what 'Middle England' was saying, if it contradicted their view of where the 'centre ground of British politics' was. Here's three more examples of the political centre and elite pundits holding unpopular views:

1. The 'mansion tax' was an example of the politics of envy and appallingly badly thought through and presented. Nonetheless, 69% of people support it, 24% oppose it.

2. Peter Mandelson is being hailed by activists on all sides of the political spectrum and pundits as the most effective senior Labour figure. Yet an opinion poll found that if he were leader, Labour would do worse than under the leadership of Harriet Harman, Ed Balls, Jack Straw, Alan Johnson or either of the Miliband brothers. The Labour Party may have learned to love Peter Mandelson (certainly I've warmed to him a lot) but he's not a vote winner.

3. The Royal Society of Arts and IPSOS-Mori found that 50% of people do not believe there is a need to cut spending on public services in order to pay off the national debt, and that only a quarter of people - 24% - believing that public spending cuts are necessary.

Commenting on the last point, the chief executive of the RSA, said that, "This is not a good starting point for politicians of any party to win approval for being either realistic or bold. The fiscal challenge is...a challenge of political leadership." and the chief executive of IPSOS-Mori commented, "The public are still in denial about the size of spending cuts now needed. The challenge will be to deliver them without the sort of shocks and disruption that saw Mrs Thatcher as unpopular as Gordon Brown two years after taking office."

Note how this works. The assumption is that the public must be in denial if they don't understand that they need to pay more for worse services, and that the job of politicians is to be 'realistic' and 'bold' in persuading people to go along with cuts without shocks and disruption. Peter Mandelson is thought to be good at this, so gets much praise from insiders, while policies which more than two-thirds support get described as political suicide.

Here's an alternative idea. Maybe people aren't 'in denial', and they are right that they shouldn't have to pay more and get less because a few rich people screwed up. And maybe the real challenge of political leadership is in resisting the groupthink of the wealthy political elite, and instead working out how to minimise any cuts and listen to the people, not the powerful.


At 1:29 pm , Blogger Rob said...

The assumption is that the public must be in denial if they don't understand that they need to pay more for worse services, and that the job of politicians is to be 'realistic' and 'bold' in persuading people to go along with cuts without shocks and disruption.

The key point is that we've only been getting the spending levels we have for the last decade by 1) borrowing (lots of) money, 2) off-balance-sheet accounting practices and 3) a growing economy, with the financial sector being a large chunk of that growth. One could argue that we've under-paid for what we've been getting for the last decade - unsurprisingly, Labour has tried to deliver big spending increases without wanting to raise the taxes to pay for it.

Someone's going to have to start paying more. The popularity of the 'mansion tax' suggests that the public mood is in favour of the rich paying more. Fairness already dictates that the poorest should pay less than they do already, so it seems logical to shift taxes on to the wealthy.

In any organisation that is experiencing guaranteed budget increases year-on-year, money is going to be wasted. I don't mean that the paperclip budget will get out of hand, I mean that whole projects will go ahead that should never have been considered (the well-worn example of ID cards is symbolic here). We have to revise decisions made when we thought that the world was going to pan out differently to how it actually has. Of course some spending will have to be cut, because it just doesn't make sense to spend the money on those things now. At the very least, we're going to need the money to pay the increased costs of benefits as unemployment rises, and other associated costs.

This doesn't have to mean delivering worse services. Unless the public services are managed catastrophically badly, they should be able to find a way of trimming costs without damaging service delivery. I'm afraid that the answer to the problem is incredibly dull: tax the rich a bit more (while trying to maintain a broad enough tax base for economic efficiency), cut the projects that end up looking a bit mad now that the financial situation has changed and work on directing the resources of the state to where they are most needed. The deficit may continue to rise for a while, but that's normal in a recession. If we want to reduce it, we can do so when the economy can tolerate it. It's not rocket science, is it?

At 9:17 pm , Blogger Quietzapple said...

WW2 fought successfully on loans finally repaid while Gordon Brown was Chancellor and a WW2 0.5% bank rate . . . .

Like Sam Brittan pointed out it makes still more sense to borrow to keep people in useful work that to kill one another.

Should the multi-millionaires who work for the billionaires who own the Tory party tell us to tighten our belts while they eye flat rate tax policies & etc they should fear for their safety imho.


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