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Yesterday I suggested that the big problem with politics is neither MPs’ expenses nor the conventions of the constitution (although I am a reformer), but the content and tone of the conversation between the people and their representatives. There is something febrile and disconcerting about the state of public opinion. A few days ago I described an arc of indignation starting with Ross and Brand travelling through Fred Goodwin and Sharon Shoesmith and landing now on MPs. Daniel Finkelstein is, as always, very sharp on this today.        

In this atmosphere what chance is there for enlightening debate about the challenges facing our country and the world? In yesterday’s FT, Gideon Rachman made a powerful point: countries facing severe economic downturn and fiscal crises have to make hard choices. This happened in Latin America around the turn of the century and it is already happening in some Eastern European countries; for example, Estonia has cut public sector pay by 10% while Hungary has raised the retirement age and cut pensions by 8%.

It may be because the people of these countries had a strong memory of harsher times that they were willing to accept tough measures as the price for getting back on track. Can we imagine such resigned fortitude emerging from our own indignant, intolerant and self pitying public discourse? 

The big danger here is that by putting off hard decisions today we will make the pain tomorrow longer and deeper, and that our economic and financial problems might then turn into a social and democratic crisis. Our apparent inability to have a grown up discussion (a politics of citizens not clients) also reduces the possibility of creative thinking.

In a fascinating talk here this morning- jointly hosted by Policy Network and the RSA 2020 Public Services Trust - the Director of the Dutch Scientific Council for Government Policy, Professor Anton Hemerijck, laid out the core arguments of his forthcoming book on the welfare state in Europe after the financial crisis.  Among a wealth of data and analysis, I was particularly taken by his five dimensions of welfare state recalibration. These are:

• Functional: what should the welfare state do? For example in the UK we have reduced entitlements for HE students but increased them for under fives

• Normative: what are the duties and values underpinning the welfare state? For example, in the last two decades across Europe, there has been a growing emphasis on responsibility, with a shift from supporting people out of work to seeking to get them back to work

• Distributive: who gets what? For example, there has been a general shift in thinking from redistribution being primarily about class to focussing on distribution across the life cycle 

• Institutional: how is the welfare state organised? David Cameron (in contrast to Margaret Thatcher) presumably thinks retrenchment will be done better if more responsibility is decentralised

• Referential: who do we compare ourselves with? Over the years there have been various fashions in economic and social policy; enthusiasms for Japan, Germany, the US and Scandinavia have come and gone (it is a rule of comparative policy that just when the world’s experts agree that a country has the perfect system that system promptly starts to collapse). But which national model will be seen as the best for coping with recession and retrenchment?

This is a rich agenda for debate. Call me out of touch but I can’t help thinking it may be just a little more important for us than whether ministers should get tax relief for accountancy services.


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