An ‘age of austerity’ is the cliché to which journalists have taken recourse in the aftermath of Wednesday’s budget. The Guardian’s Martin Kettle reminds readers that it will almost certainly be Conservatives who must steward the economy through the difficult years from 2010 (many of Alistair Darling’s proposals are to be implemented during the next parliament). Nick Robinson describes the forthcoming difficulties in similar terms and doggedly presses the Chancellor to admit that, evasive language not withstanding, he will be cutting public expenditure.
Darling’s prognosis of an economy overburdened with debt has scarcely surprised the vast majority of observers. And many commentators believe that the government is being much too optimistic in its appraisal of Britain’s ability to cope with mounting indebtedness whilst also embarking upon a financial recovery. If the IMF comprises a substantial impartial authority on national economies (and the Prime Minister has given every indication that he believes it does) then the Chancellor should explain why its projections for growth are substantially below those which his budget has forecast.
That the debate around the economy is increasingly constrained within coordinates which the Conservative party favours, benefits David Cameron and his team. He and George Osborne have been talking about restricting public spending and addressing the budget deficit for many months. Indeed care has been taken not to rule out raising taxes, despite the aversion of many within the party to rises of any description.
Despite predictable derision from the right wing press, it is appropriate that Conservatives should not choose to fight the 50p tax band with particular vehemence. Although doubt has been cast upon its efficacy, and although ideally the extra burden would not be necessary, prioritising the reversal of further National Insurance hikes for modest to middle income households will strike a much more resonant note with the public. In addition it is the right thing to do. High earners, in the bracket for which the new rate will be relevant, can afford to pay more. Progressive taxation is entirely defensible by conservative principles (if not by the tenets of fundamentalist free market liberalism). The Conservatives have done well to sidestep the most obvious of traps.
The challenge for an incoming government will not be to immediately reverse tax rises which have been instigated. It will be to maintain frontline services, whilst delivering promised efficiencies and hacking back layers of bureaucracy which have been allowed to grow unchecked under the Labour government. Although more drastic measures might ultimately be required, with Quangoes, unelected regional assemblies and various commissioners for this, that and the other, there are enough obvious targets to be trimmed back for a new chancellor to be kept busy with that work for the first year of his tenure (at least).