Cut the roots and stunt the growth
11 October 2010
Next week the Government’s spending review will be unveiled to a nervously waiting nation. I am already convinced that 20 October 2010 will be a dark day for the UK.
The reason for my pessimism is that the culture for cutting has already been addressed and adopted by the government. Most centrally funded departments have already accepted that cuts of around 25% are going to be required of them during the course of this government, only health and overseas development avoiding this reduction in revenue. Many councils are already working on their plans to streamline services (more of that later) as the spending review is not anticipated to alleviate the ‘cut by a quarter’ principle.
Firstly I fully accept that there is nothing more pointless or wasteful than spending huge amounts of money servicing debt – and I am aware that estimates for our current repayments are huge, running at millions per day. However there are different ways to reduce the deficit, and the philosophy of ‘cut, cut, cut’, adopted so enthusiastically by the current administration is, I think, short-sighted in the extreme.
On a topic such as this there is a severe danger that every sentence offers a new tangent to go down, but I do of course concur with the notion that the public sector could be made more efficient (including the protected health service) and that the benefits system is too open to abuse. There is a lot of money going out of the system that does not need to and the Government is quite right in prioritising this as an area for immediate attention.
Reducing overall public sector budgets is going to obviously result in people losing their jobs and thus putting more pressure on the benefits system, which although relatively minor in the scheme of overall national debt, supports the view that too many of the UK’s population are a burden (through no fault of their own), rather than a contributor. David Cameron’s conference speech, with his Kitchener-esque ‘Your Country Needs You’ appeal, is only right if there is an option for every individual to contribute. We can all economise, but to contribute we need to be able to work and if the rug is pulled from under the economy then the opportunity will be removed.
In short, I think the Government has the wrong focus. Instead of ‘Cut, Cut, Cut’ it should be ‘Invest, Invest, Invest’. I don’t mean in hospitals or schools or public services. I mean in terms of proper support for science and engineering, creating an environment through universities and the private sector that encourages innovation, establishment and expansion of the whole technology supply chain and equally of the manufacturing sector. Investment in these areas, and this can be as crude as easier access to credit, would start to create wealth, create jobs and provide a proper foundation for recovery.
However, if you cut the roots the flower can’t grow, and growth is what we need.
A further example of the Government’s negative approach came to light this week as suggestions to lift the cap on student fees were mooted. A fairly innocuous sounding plan seeing as all students come out of university with substantial debts already. The figures mentioned would I believe tip the balance against further education. Fees over three years are currently capped at about £10,000. It has been suggested that typical annual fees might rise to £7000 or £10,000 – or perhaps even more for our top universities – thereby loading another £20,000 or so of debt onto a student before they enter the job market. Too many promising young students would be put off by this, and, with top universities demanding top dollar, we are veering towards a return of the class system. Once again I feel that these charges are a false economy. I recently read an interview with Professor Brian Cox who pointed out that these days not all research comes out of universities, but all researchers do. Britain needs to develop its talent if we want the next generation of leading scientists and engineers to emerge. These are the people who will be providing our pension funds in the future!
While I am on the subject I do think there are two sides to this current debate. The first, as I have discussed above, lies in the dubious logic of cutting costs as the right road out of our debt-ridden quagmire. There is also another side to the story that we will all start to become more aware of in the coming years.
The warning signs have come over the past few months as various leading figures, unions or any other self-interested party have started to realise what ‘25%’ really means. Police have warned of a breakdown of law and order. Teachers, students and universities have all had their say on the consequences for their parts of the education system. Health, defence, transport and the rest all warn of the dire consequences of cutting their budgets. The main aim of this is, understandably, to plead for damage limitation in the Spending Review, but the message is genuine that some (maybe all) of our core services and infrastructure are at risk. Such is the conviction of the Government that austerity is the way forward, and the British public seem to be accepting this without question, that by the time we might start to think this has gone too far it may be too late. We may start to lose essential ingredients of British society that have taken generations to build, all because of a ‘cut, cut, cut’ ideology.
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