The aspect of the latest forecasts from the OBR which have received the most attention has been the probable reduction in the number of public sector jobs which will be lost. That’s natural, of course – it’s the most immediate impact seen by large numbers of people.
It wasn’t the only important aspect though. The OBR also suggested that the Chancellor would have up to £6 billion available for tax cuts before the next election in 2015.
That goes to the heart of one of my concerns about the Coalition’s fiscal policy. They have claimed from the outset that the cuts are about deficit reduction and are absolutely essential for that purpose. I have feared that cutting the public sector was driven, at least in part, on ideological grounds in order to be able at some point to reduce taxes for the more well-off and shift the balance from collective provision to individual provision. The OBR report provides a degree of confirmation of that fear.
There is, of course, nothing wrong with arguing for more individualism and less collectivism, although I’d take the opposite view. But hiding that aim behind an entirely economic argument, and cutting more deeply and quickly than the economics requires in pursuit of an ideological objective, is not being entirely honest.
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4 comments:
John
Surely we in Wales need all the employment opportunities that are available irrespective of which sector that supplies them
It is the quality, quantity and security of employment which is critical
We need to create an environment that creates clear water between employment income and the benefits system for to be sure the one product of for example the minimum wage has been to place large numbers of people in to a wage/benefit
sub culture.
To simply shift tax burden away from the better off can only pass that burden onto the worst off or is the real agenda of the Condems to return us to Victorian times
The idea that the cunning plan is to build up a nest egg to hand out in the six months preceeding a General election is of course pure political genius however there is no such thing as a free meal so are we in Wales as usual to take the pains so that England gains
"we in Wales as usual to take the pains so that England gains"
I reject such an oversimplistic formulation. Certainly there are some who win and some who lose from the approach being adopted, and certainly the ones who lose are paying for the gains of the winners. It's also true that Wales as a whole will lose. What isn't true, though, is that 'England' gains - there are areas of England which will lose as well; it only looks like a gain for 'England' if you forget any regional differences.
The most well-off happen (for all sorts of reasons) to live largely in the south-eastern corner, and a policy which enriches them further will disbenefit everyone else. We need to get away from the idea that 'England' is doing Wales down, and understand that the problem is that the UK has a hopelessly imbalanced economy in regional terms. The solution is to take matters into our own hands, but I think we need a more confident and positive approach to that, rather than just blaming 'England'.
John
Totally agree with the regional argument but if we see this through surely the poorest regions will still continue to be the poorest only even poorer
I am sure that there are sustantial disparities within regions in Wales even within our towns as there always have been. the key is for us to find a better way of dealing with it
One major long term problem arises from the terminolgy used and its interpretation
Employment is the opposite of unemployment and by definition retired people are unemployed
I am willing to bet that here in Wales the skills knowledge of the unemployed and the retired combined far exceed that of the employed. We simply are not harnessing our human resources in the wonderfull country of Wales
"if we see this through surely the poorest regions will still continue to be the poorest only even poorer "
Of course, I agree. I'm just wary about turning that into a 'Wales v England' comparison; the NE of England, for instance, will also suffer.
"I am sure that there are sustantial disparities within regions in Wales"
There are indeed. Welsh Government policy in practice (as opposed to the theory) has effectively carried on with the policy of the Welsh Office previously in encouraging growth in and around the SE of Wales. In some ways, it's the UK policy writ small. And as long as you only measure GVA for the whole, it works as an economic policy - high growth in one area improves the total growth for the whole.
But what we actually need is to share the wealth and economic activity around, otherwise we merely replicate the existing inequality on a smaller scale. I'd like to think that the ERP will help achieve that objective, but it's too early to be certain at this stage.
"I am willing to bet that here in Wales the skills knowledge of the unemployed and the retired combined far exceed that of the employed."
I suspect that you're right. The question is - how do we harness our collective abilities for the collective good of all? And that brings me back to one of my recurrent themes - competition and self-interest are not, in my view, the best way to do so.
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