Watching David Cameron’s keynote conference speech over the weekend, I was struck by the language he used about the deficit. “I wish there was another way” he says of his budget cuts. “I wish there was an easier way. But I tell you: there is no other responsible way.” It’s similar to what chancellor George Osborne said about his “unavoidable budget” .
There’s nothing unusual about attempting to justify a political agenda by claiming it’s the only possibility. Margaret Thatcher made “there is no alternative” famous. Communism always claimed the worker’s revolution was inevitable. The truth is, ‘there is no alternative’ is almost never true. Or as Andrew Simms puts it: “In politics, when somebody tells you that ‘there is no alternative’, it usually means that they are just desperate to stop anybody else noticing that there are several.”
So in the interests of truth in our politics, let’s let’s remind ourselves of some of them.
- First of all, cutting the deficit is not the only way to economic recovery. The US has prioritised stimulus spending in the short term, dealing with the deficit on a longer time frame. That’s the same option Labour was aiming for, and how we’ve generally dealt with recessions in the past century. So for a start, the deficit reduction approach isn’t the only way.
- If we play along and say that the deficit has to come down, there are still options. You can close a spending gap either by reducing spending or by raising income. The coalition favours the former, and the chancellor is expected to announce spending cuts totalling £83 billion in his upcoming budget. If you were to raise income instead you could pursue the taxes we haven’t received yet. The World Bank estimates that the UK loses around £73 billion a year to tax evasion.
- If we closed to tax loopholes and reclaimed that tax, we’d only have another £10 billion to find, which we could do with useful new taxes on aviation or on empty properties. Some formulations of a Robin Hood Tax on banking activity could deliver as much as £20 billion, a quarter of the deficit at a stroke.
- Even if we decide that cutting government services is the right thing to do, there are multiple ways to do that, and some of the choices are rather odd. Jobs have already gone at HM Revenue and Customs for example, the people who are supposed to be stopping the loss of that aforementioned £73 billion. Many of the despised quangos will cost the government more money to close down than they cost to run, and deliver savings recommendations tens of times higher than their budgets. In my area, youth services that are proven to cut crime are losing their funding, which surely shuffles the expense onto policing?
- Then there’s still the glaringly pointless defense mechanism we just committed ourselves to, with Cameron announcing that “we will renew our nuclear deterrent based on the Trident missile system”. The Campaign for Nuclear Disarmament estimates the cost of renewing Trident to be around £70 billion over the course of its lifetime.
Given these various choices, why are we so aggressively pursuing the line of budget cuts? Is it because we’re trying to preserve the country’s credit rating? Is is, as the new economics foundation have suggested, because another round of banking bailouts is on its way and need to create some slack in the system? Or perhaps we just have a coalition that believes in small government and has been gifted a perfect opportunity to cut it down to size. I don’t know. What I do know is that whatever the politicians say and whatever the media repeat, there is always an alternative.