If anyone’s interested and not watching the footie, I am at 9.15 this evening taking part of what may be an interesting conversation on Radio 3’s ‘Night Waves' about ‘resentment’. I think we will start off talking about the nature of resentment and how it is different from, say, a sense of injustice. The conversation may then turn to today’s budget and ask where in British society we might see resentment emerge as we move into a four year period of higher taxes and service cuts.
Probably the last thing readers want is more budget analysis, but as it is such an important statement and, as I wrote about it yesterday, I thought I might share my top lines.
The budget can be looked at socially, economically and politically.
Socially, it is fair in one sense and unfair in another. Fair in that the tax and benefit pain is reasonably evenly distributed, although even the Treasury’s own figures show the poorest ten percent being the second hardest hit decile overall. Unfair in that some will argue we should give extra protection to the poorest in hard times, and because the public spending cuts to come are almost certain to impact the poorest hardest.
Economically, the whole package rests on the expectation that the private sector will grow steadily and strongly. If this is the case then the Coalition may well be in a position to reduce and even halt planned expenditure cuts in years 3 and 4 of the plan. If the private sector doesn’t grow, then not only might it be that the plan is judged to have been misguided (as Labour is arguing) but the consequences of cuts – especially on overall unemployment – will be much worse than today’s Treasury predictions
Politically, as I said yesterday, I suspect the Coalition will get reasonable support for its boldness for some time, maybe 18 months or so. But by the time we get to autumn/winter 2011 the Government will be badly in need of good news to maintain its cohesion and its support in the country. Of course, a lot depends on how Labour behaves. Its response today was, to my mind, too shrill and short-termist. Most voters do blame Labour for the state of the public finances, and if there isn’t a second economic downturn (most economists don’t think there will be), then Labour will have its dire predictions thrown back in its face.
The final note is that I am non-plussed about how the Coalition is going to reduce education expenditure by 4-5% a year for each of the next four years while at the same time introducing a generous pupil premium and funding an expensive policy of supporting free schools (something which relies in the short term on allowing more surplus capacity in the system). Michael Gove is not stupid and he is a powerful figure in the Coalition. It will be fascinating to find out how he hopes to pull this off.
We shouldn’t underestimate how far our societies have pulled apart. Yet there is hope for renewal, says Anthony Painter. The question is not whether we come together – but how.