Wednesday, 1 July 2009

Cuts, the CSR and future tax rises

The battleground for the next election looks as though it will be cuts. Labour want to send the same message that they did so successfully in 2001 and 2005; that the Tories will cut public services (on this occasion, by 10%). This time, however, the Tories have a strong counter-argument - that, due to the economic crisis, cuts are needed. Even Labour's own figures seem to point towards this.

Currently the Government is making it very hard to see where we stand. They are not going to hold a Comprehensive Spending Review (CSR), which is due this year, and which will cover the Government's spending plans up to 2013. Their stated reasons for not doing one - that times are too uncertain to hold one - is farcical; any scheme that tries to set out plans for the future has to face uncertainties.

Labour are trying to force the Tories' hands; they want the Conservatives to detail their public spending plans, and then Labour will criticise those and come up with their own, less draconian ones. Yet that is not the way it should work; Labour is in Government, and they have access to much more data than the Tories, and they should be coming up with the plans.

The Government should govern, and the opposition should criticise, amend or support any proposed legislation. What we are getting is a stupid waiting game; the Tories waiting for Labour to release figures; and Labour, who are in much more of a position to release figures, are waiting for the Tories.

This will simply not do, and the ball is firmly in the Government's court.

The worst thing is that Brown is trying to define the Government in relation to what he says the Tories will do, not what Labour wants the Government to be doing. This is exceptionally important and is a sign that the Government has few genuine ideas. Just listen to Prime Minister's Questions: The only questions that Brown answers are the planted ones from Labour MPs. To everything else (and indeed some of the questions from his own party) he goes on a rant about what he says the Tories would be doing.

This is not good enough. He should worry less about what he thinks the Tories will do, and more on what his Government would do. Yet, as seen in the recent U-turns (and the part U-turn on ID cards this week), his Government appear to have very few policies.

It is still possible for Labour to win (if they do, I sincerely hope that it is not under Brown's leadership). If so, they will be faced with a choice: cuts to services, or tax increases. And I reckon Labour's post-election message will be as follows:
"We're cutting some areas (defence, transport, etc), but we will continue to grow core services such as education and health. Therefore we will put up taxes to pay for this growth and to help deal with the debt burden. There are too many inequalities in the country, and we will sort that out. The have's have to help the have-not's."
The next election may well be a choice between cuts to services and an increased tax burden. Yet there is no way that either side can say the latter of these, as increasing taxes is seen as being an election-losing issue. One of the policies that I used to agree with the Liberal Democrats on (with caveats) - the 1p income tax rise - has now been abandoned. It was a policy that, if they had firm spending constraints in place for the extra income, put clear blue water between them and the other two parties. Yet Nick Clegg abandoned it, right before the recession when that money might most have been needed.

Times are tough, yet the Government is not giving us the lead that we need. That lead is the truth on their own policies.

No comments: