Wednesday, 3 December 2014

Don't believe a word of it - cuts are cuts

Jobs, that is what it comes down to, and wages, and taxes. The reason for the coalition, the coming together of the Liberal Democrats and the Tories was to clear the deficit — so they said. They are failing, and failing miserably. Why? The answer was always there.  The best way to clear the deficit is to get people working for decent wages. The reason the deficit is not shifting is not because of profligate government spending. It is because of falling revenue. The premise that simply cutting spending will cut the deficit is what it is — simple.

Now you could go on cutting and cutting spending in the hope that the deficit will turn around. But the more you cut the more likely it is that you impact on revenue. Surely that is the lesson to be learned. But it isn't a new lesson. It is what several economist warned four years ago.

The problem with cuts is that it  begs the question of what to cut and that produces conflict about political priorities. The Tories will say they couldn't cut enough because the Liberal Democrats wouldn't let them. The Liberal Democrats will say look the Tories would have cut more savagely — 'we have held them back'.  Neither really gives an answer.

Another erroneous assumption runs on the lines that there is 'inefficiency' and we can cut without cutting front line services. I have no doubt there is inefficiency or 'red tape'. "Let's cut the red tape! they declare. It is a common theme and most people who hear it approve. Well, of course they do. Nobody likes red tape. So what then is the problem. The problem is 'red tape' doesn't come in a box labelled 'red tape'. So cutting it is difficult without also affecting the 'front line'. And this leads me to the next problem - the 'front line'. It is a politically expedient term and also has some erroneous assumptions.

The worst of these assumptions is that 'front line' can somehow be separated from the 'back room'. But it can't. 'Front line' staff often complain of excessive 'form filling' or 'paper work'. "if only they can get on with their jobs!' Again it is to simplistic an assumption.

Imagine the police operating without 'paperwork'. Would any prosecution succeed? I doubt it. Unfortunately paperwork is necessary. It is just as necessary in clinical services. Imaging being treated without your doctor having access to any of your notes.

No, the problem with 'paperwork' is that much of it is necessary. Of course a lot of it is not, but deciding what is and what is not is difficult. Furthermore it doesn't come in a box labeled 'necessary paperwork'.

This is why I am always sceptical of politicians who sell cuts on the grounds of 'efficiency' or 'cutting red tape' - not because I don't want 'efficiency' or to cut 'red tape'. It is that they don't really know what they are talking about when they use those terms and neither do I. I can of course come up with examples but, and it is a big but, all these examples don't fit together into a clear comprehensive policy that will achieve very much in relation to the deficit.

The government said that they would protect the NHS. But the NHS has had £20 billion of cuts. The government says these are 'efficiency savings'. But we see the result of these so-called 'efficiency' cuts - a health system which the BMA has warned several times is on the precipice.

There is no quick or easy fix to the deficit. It needs an economic strategy beyond the bounds of electoral timetables. Now the Chancellor is pushing spending because of the election, not because it is the right thing to do for the economy. We are in political and not economic decision making.

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