The Conservative manifesto has effectively abandoned the aim of closing the deficit. The earliest date when a balanced budget is now anticipated is 2025. For all practical purposes that means never: setting economic goals for the parliament after next is meaningless.
Three issues are worth noting. The first is how temporary political influence is, even without a change in ruking party. George Osborne's budget obsession departed with him for all practical purposes.
The second is how fickle the electorate is. David Cameron won in 2015 with his 'long term economic plan'. It died in 2016 and has been buried in 2017. And the electorate are not punishing the Tories for that.
Third, the question has to be asked as to what this plan was really all about. Was it really about the deeply undesirable goal of a balanced budget that strips money and growth out of the economy whilst leaving it economically unstable and subject to excessive private debt? Or was it simply about shrinking the state?
I always suspected that this so called 'plan' and the supposedly necessary austerity that went with it was really all about slashing the size of government and nothing at all about any supposed need to balance the books, which anyone who had ever been anywhere near the Treasury knew to be wholly irrelevant.
But if this is the case, let's be clear that the gloves are now off. May can no longer claim an over-arching economic necessity to justify cuts to services. Any such cut is now by choice.
She says in the manifesto that she 'abhors social division, injustice, unfairness and inequality' and that she sees 'rigid dogma and ideology not just as needless but dangerous'. They are the criteria for assessing what she does then. And she 's going to have a tough time justifying much of what she will propose on that basis.
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Austerity was really a new year gym membership.
Convinced we had to do it, signed up, hardly ever actually went there. But would always say it was the right thing to do if asked, without really thinking it through. Even though we never looked to see if going (or not going) actually changed anything.
Indeed, I always thought that balancing the budget was a smokescreen for shrinking the state. I’m sure we’ll get a lot of the “Private Sector Good/Public Sector Bad” mantra.
No dogma now…..
So what are the criteria by which we should assess May’s Tories? You suggest we use her four parameters: social division, injustice, unfairness, and inequality. The ONS publishes annual figures for inequality in the form of the GINI coefficient; but that only covers income inequality, not wealth inequality. Furthermore, there are no standard metrics for social division, injustice, or unfairness (that I know of).
Awkwardly, the latest ONS report on income inequality (published January 2017) states: “There has been a gradual decline in income inequality in the last 10 years”.
Link: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2016
Do some research on the flaws in Gini I suggest
So if not GINI, which metric do you suggest we should use to assess the next government’s performance?
Start with the Palma index
Use qualitative as well as quantitative measures
https://www.equalitytrust.org.uk/how-economic-inequality-defined
Thanks
Per the ONS, the Palma ratio today is lower than when the Con/Dem coalition took power in 2010. I suggest this isn’t a good metric to choose when vying for political advantage.
Evidence: page 8 here:
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/nowcastinghouseholdincomeintheuk/2015to2016/pdf
Food bank use is a better metric, and it has expanded enormously since 2010. But in the last couple of years, food bank growth has levelled off. I doubt we’ll see further growth under a future Tory government.
Qualitative measures are all well and good, but as accountants and/or economists, we do prefer specific, measurable targets.
But should we?
You are so right to question the reliance purely on the quantitative.
While we would all like to believe that we are rational, sensible, logical beings, the evidence is there all around us that perception plays a fundamental part in our decision-making and thought processes.
The qualitative measures are vital to balance and illuminate the quantitative ones. We have all seen how people accept what they want to believe which is why it is vital to combine the ‘art’ with the science in framing the argument.
As stated elsewhere – at this stage of the game it doen’t really matter what she says. There are more than enough economically illiterate voters to give her a significant majority, aided of course by FPTP. Nobody should be surprised that the Tories want to shrink the state. It’s a corner-stone of their ideology that has been widely and publicly articulated at least since 1945. All you have to do is join up the dots – but that seems to be a task too far for all too many voters. I feel a Godwin’s Law moment coming on …. Hitler did tell the world what he wanted to do in 1925 – long before he was ‘elected’. Then when he actually did it – shock, horror!
There are some very serious problems out there which will emerge in the next few years. The election is essentially a gamble to retain/gain power until 2022 when it could be a different world. It is not winners and losers. It is which loser we want to minimise what we have to suffer.
I agree 100% but who will hold May to account? As you say, they have failed on all measure so far but there is no hue and cry from any quarter. Not the main stream media it seems when they could embarrass them on the political slots on TV. Blogs such as these are very enlightening but to be honest I doubt that they influence many people to change their minds.
‘She says in the manifesto that she ‘abhors social division, injustice, unfairness and inequality’ and that she sees ‘rigid dogma and ideology not just as needless but dangerous’.
I don’t think she is talking about her concerns for Britain here.
She is talking about the worries she has for her own party!!
She will be judged on how well she keeps the party together.
That is all she cares about. Believe you me.
Re ‘Dementia’ tax- a conservative think tank, the bow group, says it will be the biggest stealth tax in history.
https://www.commonspace.scot/articles/11011/tories-rattled-over-backlash-dementia-tax-cash-grab-elderly
The irony is that some of the backlash came from Labour supporters, who wanted an opportunity to frighten OAPs to vote Labour. Misinformation about what was being proposed must put “dementia tax” towards the top of the “fake news” league table.
Unfortunately the ludicrous story of government finances being like a household, and we must not overspend will, I fear, linger for a very very long time.