Is the UK elite too soft to cut public spending?

8 09 2009

AP3JW14CAIC0UF9CAP1ZS3HCA08CDRACA06ZKDNCAO1S3HRCA2QEX80CAH39K4JCASTQ9QWCA6W1DG3CAT17RVCCA3R31ZVCAYORE6JCAP4TZJJCATQOWU7CADGR38OCA9AFAVJCA2EEGUBCAV998NYCAM0TUPO‘There is no one in the civil service with real hands on experience of fiscal hard times. They know they have to learn very fast.’

This comment from an academic who has been teaching civil servants about the UK’s economic past sums up some of the problems facing the UK political elite in dealing with its current economic black hole. In fact the civil servants who administer the state on a day to day basis are lacking in many of the qualities which enabled the UK to survive and prosper in the past, not just the experience of dealing with recession. One symptom of this has been the increasingly porous character of state institutions with leaks and whistle blowing becoming more and more prevalent.

More importantly, over recent years as expressed through the policies of New Labour, the state has become used to dealing with market research led, short term policies rather than longer term strategic ones. This is all fine when the issues concerned are trivial domestic political issues, such as drinking in the streets. The problem is that when a serious and profound problem does arise, the ability to respond effectively does not exist.

Now that such a deep problem, the recession, has appeared the state is confronted with an enormous problem with which it is ill equpped to deal. The price of bailing out the UK financial sector has been to create an enormous budget deficit. There are two main ways that this could be managed. One would be to mobilise the resources of  the state into stimulating new productive investment in order to grow the economy as fast as possible. But growth has become a dirty word in the UK unless caveated by the need for ‘green ‘ growth.  The UK economy, along with most of the developed economies, needs fundamental restructuring. New growth can only come out of the destruction of the old and out-dated. The kind of dynamic political leadership needed to push through such a programme simply does not exist.

The second way of managing the debt is more short term, and therefore more attractive to the UK elite, and that is to cut public spending in an effort to balance the books. Even this approach makes politicians of both main parties feel extremely uncomfortable. Both parties are casting around for the language in which to disguise the cuts both are planning to make.

As Frank Furedi has argued in relation to the Lockerbie affair, the UK elite has become so incoherent that it has become incapable of managing even the day to day affairs of government effectively. The UK elite has become soft and ineffective at its heart. One expression of this has been the fact that despite the huge amounts of money put into education and health over the past ten years these public services are still hugely inefficient and unsatisfactory.

The good news for public sector workers from all this is that no government, Labour or Tory, is likely to have the strength to push through the kind of public spending cuts which many now fear are necessary. There have only ever been two prior occasions when public spending has been substantially reduced, after the massive increases caused by World War 1 and World War 11. It is quite possible that only external pressure, from the IMF for example, would make this happen today. The bad news is that the inability of our political elite to do this shows it is equally incapable of taking the tough decisions needed to keep the UK on a growth curve in the longer term.