The IFS have spoken about the budget. As they say:
The government expects public spending in total to be broadly flat in real terms over the four years beyond 2010-11. Making plausible assumptions ... Whitehall spending on public services and administration would need to fall by an average of 3.1 per cent a year over those four years, a cumulative decline of 11.9 per cent or £46bn in real terms by 2014-15. This implies cuts averaging between 5.3 per cent a year and 7.1 per cent in the areas that the government is not planning to ‚Äòprotect’ in 2011-12 and 2012-13
As the Guardian leader notes:
The bad news in the IFS analysis was all about the fiscal tightening to come – and, unfortunately for Mr Osborne, it applies to politicians of all ideological hues. The bald truth is that the political argument over how and when to bring down the debt is largely about shades of grey rather than black and white. All three major parties agree on the need to reduce borrowing: they differ only on the whens and hows – and even then not by much.
And as the Guardian poignantly adds:
Yet, as the IFS suggested, the proposed spending cuts all parties are promising remain unfeasibly large.
"Tougher and deeper" than Margaret Thatcher was Mr Darling's promise last night. The efficiency savings Labour promised this week are wishful thinking – with NHS and schools both likely to plough any savings straight back into services. This is no bad thing, especially for the public using those services, but it does undercut the machismo over cuts.
Or to put it another way, there’s not a hope in hell that these cuts can be delivered.
Martin Wolf at the FT says much the same thing As he notes:
If the crisis has struck at the foundations of Thatcherism, it has struck as hard at those of Blairism.
To put it bluntly – both (and they are only variations on a theme) are discredited. But Wolf goes on to ask:
So what are the narratives that the big political parties now offer?
The shared answer is clear: since you, the voters, do not want to hear the truth, we will not force you to do so.
But that’s not policy – that’s evasion of the issue.
And that summarises the real crisis at the core of the current financial problem. So far no political party has shown it understands it. No one has told the truth that cuts of the scale suggested are completely undeliverable without massive social cost and disruption, from unemployment onwards, and across the whole spectrum of society. Wolf summarises this:
The crisis marks the end of an epoch, economically and politically. The big parties are at a loss over how to respond. But – apart from recognising and reacting to the crisis, which could, under plausible assumptions about future economic growth, require still more radical decisions on the public finances than anybody wants to contemplate – their leaders have to find something more inspiring than an offer of years of austerity and disillusion.
The party that deserves to win must craft a narrative and policy that creates opportunity out of disappointment. Competence is required, as is toughness. But the UK needs more than these qualities. It needs the “vision thing”, as well. I plan to discuss these challenges as this pivotal election draws nearer.
That vision is vital.
And at it’s core is one thing: the prize will go to the party that can offer freedom from fear. Freedom from the fear that children will be trapped in poverty, won’t be properly educated, won’t be able to afford university or to buy a house. Freedom from enslavement by a mortgage that destroys relationships and children’s lives. Freedom from fear of ill health when cuts attack the health service. Freedom from fear of unemployment. Freedom of fear of retirement and poverty in old age. Freedom from fear that there won’t be a country for our children. Freedom from the fear of helplessness in the face of a tiny elite who abuse all as they appropriate others wealth. Freedom from fear of the end of democracy. Freedom from fear of oppression in other words.
That oppression has been caused by finance.
The reform of finance will be at the core of reform to relieve that fear.
And instinctively people won’t accept cuts to appease finance. they know it’s the wrong thing to do – to throw away our real prosperity to pander to Moody’s and S & P.
Which is why it won’t happen.
And which is why there’s an urgent need for the vision to fill the void that's opening in the political debate.