Thursday, 21 October 2010

The cuts

A predictable response to yesterday's Spending Review comes from, among many others, TV's Polly Toynbee and TV's Johann Hari. This is not to say that they are wrong, just that we already know what lefties are bound to say about it.

But now comes the not-at-all-left-wing Institute for Fiscal Studies, confirming that the changes announced are essentially regressive, and that the Chancellor was not being completely honest when he said that the broadest shoulders will bear the biggest burden. It is true that the richest 2% are hardest hit in absolute terms, and so I should bloody well think, but poor families are the biggest losers as a proportion of their income.

This is just what one would expect from a normal Tory government, but this is a coalition government in which the Lib Dems (who say they believe in progressive taxation) are supposed to be a moderating influence. That is the only justification for their being there. I think the LDs are going to struggle to retain much credibility for the foreseeable future. Perhaps they will claim that, if they weren't in the government, it would have been even worse.

Of course, few people actually voted for any of this. But we do not live in a democracy. It is the unelected bond markets who decide what actually happens. It seems that, if we do not have these cuts -- if, for instance, we solve the problem by instead imposing a big one-off levy on the very rich (as advocated, entirely fruitlessly I fear, by the Glasgow University Media Group) -- the bond markets will attack the pound and interest rates will shoot up and then we shall all be even further up the creek than we are already. It is all very undemocratic and very unfair.

1 comment:

RJGraham said...

A mutual acquaintance of ours says that the CSR is a price worth paying for the Preferential Voting referendum.

In fact, he says, true Liberal/Liberal Democrats will accept *anything* and *everything* that the Tories can inflict, as PV is more important than anything else.

He even accepts the destruction of the BBC - a price that the LDP will pay for PV.

I say that the Liberals have, by cheer-leading for these evil cuts, guaranteed that the referendum will fail - it will be seen as a referendum on the Liberals, not on the voting system. People are like that.

The referendum will therefore return a "no" and boot the debate into touch for another generation.

My own feeling on this is that, whilst I won't bring myself to vote no, my previous plan to campaign in favour is non-operative. I don't think British democracy is mature enough for voting reform. Certainly not when it turns out we have one notionally left wing party and two very right wing parties.

The LDP appear to be the German FDP in disguise.