We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Most underwhelming election promise

Assiduous readers will have noted from my (sparse, of late) posts that I do not agree with some other Samizdatistas about UK elections. I do not think political disaster will save us or that small government might arise from the wreck of huge government. Mine is a mitigation strategy.

Just as we have to eat, even when the choices are unappetising, we have no choice but to be governed. Therefore I vote, and am active within the existing political system, in order to to try get the least worst result I can.

Sometimes the least worst is not very good. Politicans in a democracy have an amazing ability to back themselves into impossible corners, even when they don’t have to.

The Conservative party’s promises to “protect” the budgets for the National Health Service and overseas aid may be mad as government, but they do have an electoral logic. They are explicable as strategic decisions to change the image of the party, and appear to have worked as such. Overseas aid is largely symbolic, peanuts compared with the welfare bills. (And few will really care if that promise ends up broken.) Whereas keeping up spending plans on a bloated NHS which absorbs approaching a fifth of the budget and a tenth of the nation’s wealth, supports huge lobby groups and unions, and has been force-fed taxpayers’ money like a Strasbourg goose by the incumbent regime, is a serious commitment it will be hard to row back from. Still, maybe they had to do this to themselves, as the price of power: middle Britain worships the NHS; it is more important than IHS, more established than the Church of England. The Tories were not trusted to keep that faith, and had as a result no more chance of governing than a secular party in Iran. Now they are accepted as orthodox.

But why would you make a promise no-one expects, but that similarly constrains your scope for radical action? No party has promised not to raise VAT rates, despite pressure. No party has directly promised not to make cuts to state wagerolls. And Cameron did just promise a pay cut in the public sector. Sounds good? Oh dear, no. He did so in a way that disastrously locks him in and creates a political bar to the cuts that are really needed.

A 5% cut in ministerial pay, and freezing it for the life of a parliament, is easy populism. “Slashing” the BBC calls it. However, in practice it is trivial; and, much worse, it puts a ceiling on what can be done to tackle the deficit. Ireland has already cut all public sector salaries—by an average of 13.5%. Had he said ministers will be paid a third less, and hinted at serious cuts in other public sector salaries over £60,000 (representing impossible wealth to most voters), then he could have been populist with room for manoeuvre. But now Cameron will be very hard put to do as much as freeze the wage bills of the bureaucracy. Even though ministers are arguably underpaid, getting much less in real terms than their Victorian forebears, it will be impossible now to cut the salary of any signficant public sector interest group by more than 5%. Protecting the NHS forces greater cuts from every other department just to stand still.

A promise to cut just made cutting nearly impossible. That is a terrible mistake.

17 comments to Most underwhelming election promise

  • John Galt

    I disagree – It is plain on the face of it that ‘Call Me’ Dave will have to make terrible cuts without a parliamentary majority of any significance.

    This is why the idea of having an independent audit of the government books and all that lovely debt that Gordon has been hiding (PFI, etc.).

    Provided this audit was done the day he gains power (regardless of whether he is a minority or small majority government) and all economic plans are frozen pending the completion of that audit – with an upper limit of say 60 days, then he could draw a line under the disasterous 13-years of Labour misrule and also provide a reason for the resulting cuts in public spending.

    The only questions remaining are:
    1. Who could be trusted to carry out said audit.
    2. What would be the impact on UK Credit Rating.

    The most obvious answer would be the IMF, but that would perhaps be a little close to the knuckle for the Tories after their continuous jears of Denis Healey having to call in the IMF back in 1978. They wouldn’t want that charge brought against them.

    George Osbourne has favoured the Office of Budget Responsibility approach (or whatever the UK name for it would be), but that would be too open to interference from both politicians and civil servants alike.

    Possibly the only real alternative is for the IMF to set the terms of the audit or oversee it, with one or more of the big-four audit companies actually doing the legwork. This would need to be co-ordinated by a major non-partisan figure like Gershon or similar.

    On the second point, when the audit is published, there would be a consequential impact on the markets and probably our AAA credit rating would be reduced by some factor, however this is like a bankrupt producing his statement of account – the only way to be truly debt free at sometime in the future is to admit what the actual liabilities are.

    There is no doubt that strong medicine is needed to rid the UK of the overwealming burden of this debt. It will take difficult decisions and unpopular measures, but the size of the problem makes them necessary.

    Perhaps after the audit, there could be a referendum where the plain choices are put before the electorate. The audit would be published and decisions would have to be made.

    For example:
    =========
    A. Vote for across the board spending cuts of 25%.
    B. Vote for across the board spending cuts of 30% with the NHS being protected.
    C. Vote for across the board spending cuts of 20% with the NHS being protected, but also a 3% increase in VAT.
    D. Vote for across the board spending cuts of 10% with the NHS being protected, but also a 3% increase in VAT and also a 4% increase in the basic rates of tax.

    It would be appropriate for these to be conducted by proportional representation, with the options being weighted according to the choice of votes cast.

    This would mean that the voters themselves would have to choose the mechanism by which the debt would be paid off. Unlike the current election there would be no way to avoid chosing the hard measures that are required.

    To sweeten the pill, the Tories might agree to collaborate on the wording or options on the referendum, but essentially it would be straight-forward.

    It might take many years, but eventually the UK would have balanced its books by renegotiating the terms of contract for civil servants and their pensions, PFI deals and other debt. I am certain that a smaller government would be the result.

  • It just reasserts my contention that ‘Dave’ is not just doing what he must to gain power, he really is one of the enemy.

    He did so in a way that disastrously locks him in and creates a political bar to the cuts that are really needed.

    And perhaps that is exactly what he intended.

    Option A: He does not want to cut anything really, at least not in any significant way… he is a patronage political just like all the rest and so does not want to circumscribe his ability to assign loyal minions some snout room at the trough… and now if pressed by genuine conservatives in the future, he has a way to resist pressure to cut in ways that might actually make a difference.

    Or then there is option B: he is just thick as pig shit and does not grasp the implications of what he says.

    And there is always the possibility that there are large element of both A and B at work here.

    I will take quite a lot of convincing that he is in any way less disastrous than the other two bozos in baleful net effects… plus he comes with the major added long term toxic effect of having made the Tory party a classical liberal free zone for years to come.

    Well at least my “Three Cheers for Sovereign Default” scenario is starting to look more plausible by the day :-D

  • guy herbert

    John Galt,

    … Dave will have to make terrible cuts…

    You mean small obvious ones? Trimming would be terrible. Big cuts and fast are what are needed, preferably the biggest in indirect ways so that the most awkward targets won’t know what’s hit them, until it has – and then keep hitting them. State and public sector pensions and nominal local government would have to be the main target if one were serious.

    We’ve learnt that much about what is possible from Blair’s carrying out a continuous revolutionary assault on the constitution, private life and civil society, all the while his dimmer detractors were sniping at him for his notional conservatism, saying moronic things like: “Tony Blair PM is an anagram of I’m Tory Plan B”.

  • Alice

    From the linked article, Lil’ Dave speaks: “In terms of the car I have at the moment, the car itself is not funded by the Government, it was bought by the Conservative Party.”

    His office later confirmed that Mr Cameron’s chauffeur is provided by the Government Car and Despatch Agency and that a portion of the running costs comes from the taxpayer subsidy for opposition parties.

    That reminded me of the famous statement by Bill Clinton — I did not have sex with that woman, Miss Lewinsky. Kinda sorta true, in a deeply misleading way.

    What to do when the least unacceptable choice is, well, unacceptable? Spoil your ballot! In a place which is as deeply gerrymandered as the UK, what’s the difference?

  • Guy,
    Your stategy is mitigating getting buggered by sugestting the buggeree takes a few deep breaths and tries to relax.

    It won’t work and remember They can no longer afford the vaseline.

  • Sam Duncan

    Nick, you’re absolutely right, but suggesting that we not be buggered at all is a futile excercise five days before an election in which all the parties with a realistic chance of power support continued, vigorous, buggery.

    Ceasing the buggery is a long term objective which I fully support, but over the next few years we are going to be buggered; there’s no option. So asking what the least painful method might be seems perfectly sensible to me.

  • PersonFromPorlock

    This is asked in a spirit of perfect ignorance, but if your politicians are (like ours) mainly concerned with self-preservation in the short term and opt for no audit, or a silly audit, could the Queen independently arrange for a serious one to be done by auditors selected by and reporting to her? It is, technically at least, her government.

  • That reminded me of the famous statement by Bill Clinton — I did not have sex with that woman, Miss Lewinsky. Kinda sorta true, in a deeply misleading way.

    Alice, I’ll promise that if elected, I will never have sex with that woman, Miss Lewinsky.

    I’ll also promise that I’ll never send a dirty text message to Tiger Woods.

  • tranio

    Canada has an Auditor general who reports to parliament not to the party in power.

  • Things would be more rational if people who work for the state are excluded from the referendum, for they are not turkeys and would be daft to vote for Christmas.

  • Sam,
    Normally I’d agree but we live in interesting times. Look at Greece. All any of them are doing at best is proposing a “modest rise in defence spending for the FY 1939-40″. The point is not so much that some of us relish the coming doom of the way things are but that some of us see this as inevitable.

  • mongoose

    Then again, it might just be a stalking horse. “We’ll reduce MPs by 5%.” He takes office and finds the car crash. One month later, he says “It’s all much worse than we had been allowed to see. The country is bust. We must set an example. I told you last month that MPs were going to have their salaries reduced by 5%. Well, now I am going to reduce them by 25%.” He might be cleverer than he looks.

  • Sunfish

    Canada has an Auditor general who reports to parliament not to the party in power.

    In a non-constitutional parliamentary government (or one in which the parliament can ignore anything other than itself), is there a difference?

  • Nuke Gray

    You know, a Coalition government might be the way forward, because the Tories could cut spending on a massive scale, and blame it on the Libdems! If they can share the blame, they might put up with the budget-cutting pain.
    does anyone know what policies the Libdems actually stand for? Papers here in Oz just suggest that Clegg is trying to keep his options open, and not deciding who to support- so he is keeping policies fluid (waffling).

  • Robert

    Cameron can always say things are even worse than we thought, so ministerial salaries will be cut by 30%, or more. Promising major cuts to politicians’ pay now would spook the public sector, but delivering a bigger cut than he promised will be popular, and undercut the protests.

    The other consideration, unfortunately, is what he can get his MPs to vote for. Getting them to cut their own salary by 30% will be difficult, though throwing open the books to reveal the dire state of the nation’s finances will help. The same reasoning applies to cutting the number of MPs – 10% means they can all convince themselves they’ll still have a seat afterwards, 30% wouldn’t.

  • Paul Marks

    Good post Guy.

    A “mitigation strategy” made sense in (say) the 1950′s (in both Britain and the United States and….) when, although very unlibertarian, the situation was at least sustainable.

    However, now the situation is “unsustainable” (to use Barack Obama’s favourate word – a word he uses whenever he is about to make a bad situation worse by shoving into effect even more statism), Britain (like so many other nations) is going bankrupt and radical action is needed.

    And YES by his own words and documents Mr Cameron has “boxed himself in” preventing him taking the action needed even if he wins the election.

    “But David Cameron is a liar Paul – what he says and writes before the election does not matter, he will take very different action after the election”.

    Sorry by the universe is not structured that way. By chance or design (depending on one’s theological opinions) it is easy to use the methods of evil to do evil (for example to lie saying one is going to cut government spending – and then vastly increase government spending after winning an election), but very hard indeed to use the methods of evil to do good.

    Saying one will “increase NHS spending” and then cutting NHS spending after the election is rather difficult – the universe is not structued (again by design or chance) that is favourable to this.

    I repeat it is easy to increase the size of the state under the cover of lies and deceit – but very difficult indeed to reduce the size of government by these methods.

    One can only really reduce the role of the state in society, by facing the beast openly and honestly – by seeking a mandate (even from people who work for the state – and some of them WILL vote even for their own sacking, if you make the case honestly) to do the hard things that need to be done, as (for example) Harris did in Ontario – years ago.

    But attacking from the front – the way of openess and honesty is not the way of Cameron. A kind person would say that this is because he does not understand the nature and scale of the problem.

    By the way on Ireland:

    The good of the last budget (the first budget to really hit government spending – the other budgets were mainly about raising taxes) is being partly undermined by yet another bailout of Anglo Irish bank.

    Or as an “economist” (i.e. a member of a university economics department – not quite the same thing to some of us) said on RTE (Irish government radio) the last time I listened.

    “Anglo Irish bank is like a black hole – that is why we must give it more money”.

    I see – so that is the way one defeates a black hole, one tosses more money at them and they go away. I must remember this strategy if a black hole ever threatens planet Earth.

    This is what people forget when (as in 2008) they demand “we must bailout the banks” once you start doing this (bailouts), you keep getting demands to do MORE AND MORE of it.

    What Anglo Irish (and some other banks to) need is not yet “more money” – it is the bankruptcy court.

  • “Just as we have to eat, even when the choices are unappetising, we have no choice but to be governed.”

    {derisive snort}

    Speak for yourself, fool.