The Institute for Fiscal Studies have concluded that the coalition’s first budget is regressive. That my party voted for it is sad. But I still haven’t heard of a viable progressive alternative, and still think that the Lib Dems made the situation better than it would otherwise have been.
It’s not surprising that a budget cutting government services hits hardest those who use those services most. The NHS’s budget is protected, so the next biggest spending government department is the Department of Work and Pensions. Cuts there mean fewer benefits, and the poorest suffering most.
These are Conservative measures, and ones which under normal circumstances I wouldn’t support. But of course we did support them, and whilst it makes me sad there are reasons why which I think are valid and which need considering.
The Conservatives took more votes and seats at the election than anyone else. This annoyed me because I’d worked hard for the Lib Dems to win. But we didn’t. We’d said throughout that, if a coalition was required, we’d look to form one with the party with most support. I guess I’m more left-leaning than not, so it was a shame that it had to be the Tories. It would also have been a shame though if it had have been Labour, since I disagreed with many of their policies then, and do now.
So we did form a coalition with the Tories. I was upset to be in league with people whose philosophy, especially at a grass roots level, I really don’t like. But that’s what was needed. The alternatives were an unworkable centre-left coalition which would have meant a broken promise and wouldn’t have stacked up in terms of numbers, or a minority Tory government unable to govern at a time when that really wasn’t a wise move.
The budget itself was, of course, massively Tory. Lib Dems are one sixth of the coalition, and probably have about one sixth of the policies in the budget. These include a rise in corporation tax and in the income tax threshold, both of which help the poorest. Of course, the two parties always did have things in common too. We have also enthusiastically supported some common policies like reforms to banking, for example.
There was lots in the budget that wasn’t Lib Dem. The bulk of it, in fact. Our own budget would’ve been massively different, but we aren’t the only governing party. The Tories have the huge majority of government votes because they won the election. This wasn’t a Lib Dem / Tory budget of two equal parties, as Labour will try to claim. It was, as the electorate determined, a Tory budget tempered a little by the Lib Dems.
We had to vote for it because we are in this coalition. It’s how coalitions work. Lots of Lib Dems are, I’m sure, privately upset about it. Lots of Tories are too, because they didn’t want to put Corporation Tax up or put the income tax threshold up. But what are the alternatives?
Labour are, of course, making the most of the regressiveness. I would if I were them. But their argument must rest on a viable alternative, and so far they haven’t provided one. Yes, it’s a shame that the budget is regressive, but where is the progressive alternative they say they have which will also deal with the debt and deficit? At election time, hey too promised bigger-than-Thatcher cuts. Would they have been progressive? Don’t think that they automatically would have been. I don’t see how.
Perhaps they’d have taxed the rich more, or cut different things in different ways. We don’t know, because they haven’t said. What we do know is that the Conservatives got more votes and seats than them, and so have a bigger mandate to govern on their own terms.
Let’s remember that in thirteen years under Labour, good years when cuts weren’t on the cards, the gap between rich and poor got bigger, and social mobility reduced. That looks like thirteen regressive years to me, compounded by things like doubling the income tax rate for the lowest earners as Gordon Brown did.
This is a difficult time. A sad time. I don’t like seeing those with the least getting even less, whilst those at the top don’t pay their share. It’s why I’m not a Conservative. But solutions are far more difficult than pointing out problems (as I am finding very clearly having moved from supporting the opposition to supporting the government) especially when the solutions are mainly from a party you don’t like.
It’s disappointing that the government have rejected the IFS’s conclusion. This conclusion wasn’t clear before, but I think it is now.
A better tactic, in my view, would be to honestly say that these are the measures which the government believe will work in the long term, relieving the whole country of a debt and deficit which will leave everyone more free to prosper in the future. That, to me, has the potential to be truly progressive.
By rejecting these findings the government looks churlish, plays into the hands of Labour, and by not yet coming out with any sort of differentiating line between the two governing parties, the Lib Dems in the government once more seem to be worryingly keen on standing by it.