Monday 19 January 2015

UK election 3: Tories' six key themes.

Last week David Cameron set out the six key themes on which the Tories will fight the general election .  They are:
  1. Tackling the deficit.
  2. Creating jobs.
  3. Lowering taxes.
  4. Improving education.
  5. Tackling the housing shortage. 
  6. Helping the retired.
Perhaps it is a bit unfair to comment on these priorities before they publicly flesh out the policies they are going to follow. Nevertheless here are a few comments in anticipation.

The deficit: is not a priority.  This is not only my view but was expressed on the Radio 4 "Today" programme last week by a leading economist  (I didn't catch his name but he was not one of the "usual suspects.")  His view was that cutting the public deficit was not particularly urgent, and that a time when interest rates are at an historic low is not a bad time to be owing money.

The Tories will cut the deficit by further reducing public expenditure and abjuring tax increases.  This will reduce state expenditure to the proportion that existed in the 1930s.  This is not the same as reducing state expenditure back  to the level of the 1930s, as a left-wing shorthand  likes to claim: it will be 30% or so of a much larger national income.  But the responsibilities of the sate have increased since the 1930s.  We have a National Health Service with a plethora of wonder treatments which didn't exist in the 1930s, but  some of them are expensive.  And we have a far bigger proportion of  people, including  me, living to a ripe old age, which means not only more expenditure on health care but  but also on pensions.  And we now have universal secondary education, higher education provision for half the population rather than the five per cent back then, and lots more. So we need a bigger proportion of the national income to pay for these welcome advances.

 The really urgent problem is, of course, the balance of (external) payments, because that is money owed to other economics, not largely money circulating within our own.  But the balance of payments, which dominated economic discussion in the 50s and 60s, and helped to defeat the Wilson government, now hardly gets a mention

Creating jobs: the jobs created so far have very largely been the wrong sort of jobs: part-time, zero hour contracts, unwelcome self-employment - and in the wrong places (London and the South East rather than the rest of the country).*  Tory policies have not yet succeeded in achieving the promised "rebalancing" of the economy, away from dodgy London based finance to skilled, well-paid work in the rest of the rest of the UK.

Lowering taxes:  agreed, lower taxes are part of the Keynesian formula for stimulating economic recovery.  The most sensible tax to lower would be VAT as that is the one which would give most stimulus to demand (as Alastair Darling's cut to 15% in 2008 indeed did).  Tax cuts to the richest will have least effect, and there's not much evidence that such cuts stimulate entrepreneurial innovation.

Improving education:  although the present structure of our education system is profoundly wrong, practitioners are desperate for a rest from disruptive re-organisations.  Therefore the best thing to do is leave education  alone for at least five years, and give the practitioners the chance to make the flawed system work as best they can.  More academies, so called "free" schools, faith schools, schools for profit, league tables, centralisation  and other items in the Tory lexicon will continue to do more harm than good.  The one change that would do good rather than further harm is to abolish OFSTED, compensating its ex-staff with guaranteed posts in their nearest inner-city comprehensive

Tackling the housing shortage:this will not be achieved by allowing private builders to build posh houses wherever they wish.  I can't see the Tories offering the practical solution of allowing local authorities to borrow in order to finance the building of mixed housing with a large proportion of affordable homes, as far as possible on brownfield sites.

Helping the retired: a higher state pension, an end to the bedroom tax and better care facilities for those of us who need them would be welcome.  I'd be happy to help finance these by giving  the winter fuel alliance and free TV licence only to those not on the list of income tax payers,  but I suspect these perks will be retained in order  to buy our votes.

A good election campaign would see constructive discussion on measures to deal with these areas.  Instead so far all we've had is a cry of "chicken" from Labour because  the Tory list doesn't include the NHS or Europe.

PS  added 21/01/14

To the "wrong sort of jobs" list should be added the 1.2 million agency workers"  Their "ghost" conditions, without any guaranteed hours, income, holiday entitlement or security to be expected from employment in a developed county are described in an article by Aditya Chakrabortty in yesterday's Guardian.  In the same issue an article by Polly Toymbee discusses the proposal to privatise the staff at the National Gallery and the consequent likely deterioration in the service provided and the conditions of those who provide it.

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