To be sure, failing to mention the deficit at all in the published draft would have attracted the opprobrium of the Tories and their allies in the media – however, he was going to get that whatever he said. But the extent to which the Tories’ obsession with reducing the deficit (or rather, talking about reducing the deficit) has become accepted political wisdom highlights the extent to which the main “opposition” party accepts the basic premise. Where in politics today – in London or in Cardiff – are the voices challenging the great Tory deficit myth?
The Tory mantra is an easy one for people to understand, as Gareth Hughes pointed out earlier today. The parallel with household accounts may be both misleading and completely inappropriate, but it’s one that people can easily grasp. But, as the Tories’ unfunded proposal for £7bn of tax cuts amply demonstrates, they know full well that reducing the deficit is not as all-important as they’ve claimed. As Gareth says again, this has just been a cover for an ideologically motivated drive to reduce the size of the state. Sadly, the other parties and the media have largely swallowed it, to the extent that, like poor Ed, they feel obliged to parrot the Tory message, and even promise to continue the austerity programme.
How big a deficit can we actually run? I really don’t know – but here’s the thing: neither does anyone else. Nobody knows how big the deficit can get before the gamblers and speculators – the people really driving policy on this question – decide that it’s time to start betting against the government. And curiously enough, given that most of them are natural and instinctive Tories (to say nothing about being the beneficiaries of tax cuts for the higher paid), a Tory government can get away with running a higher deficit than a Labour government before they start claiming to have run out of
ooffle dust confidence.
It’s really magic stuff, this ‘confidence’; although it would be a more accurate description if it were to be followed by the word ‘trick’. The supply of it is basically unlimited but its use is controlled by a fairly small number of people who can say they have it one day and that it’s gone the next; but they can get it back again if only the government does what they say.
‘Deficit reduction’ as the main plank of policy owes more to ideology than to economics. The fact that all the parties seem to have signed up to it underlines the lack of ideological differences between them. Why do we let them get away with it?