"A nation's greatness is measured by how it treats its weakest members".
I seem to be hearing this quote, attributed to Mahatma Ghandi but prefigured by others including Dr Johnson, just about every other week. At a time when the Tories are cutting public spending, however modestly, it is the go-to mantra for those who wish to demonstrate not only the iniquity coming from Central Office but, by implication, their own moral superiority.
Deborah Orr, a columnist I very much admire, provided some background to the idea in the Graun on Saturday when she reminded her readers of how things were under the last Tory administration "Schools were crumbling as they delivered sometimes appallingly poor levels of educational attainment. Hospitals were frighteningly dingy and under-resourced, coping with giant waiting lists and regularly generating horror stories about vulnerable people left on trolleys in corridors for days. All this happened because the state was trying to shuck off its responsibilities and the private sector wasn't taking them on. Conservatives may well condemn Blair and Brown for profligate spending. But what the Tories cannot deny is that when they were last in power, their neoliberal agenda left public services in a dreadful shambles."
It's worth pointing out that, contrary to popular myth, the 1979-97 Tory administrations never cut public spending. Spending rose consistently ahead of inflation (the figure that sticks in the mind is 1.5%, although the health service did even better). But despite this, and despite the overheated prose (crumbling, appallingly, frighteningly, giant, horror, vulnerable - Orr is after all married to Will Self) there's an element of truth in what she says. The problem for Orr and those like her who want more money spent on public services is that we cannot afford it.* Only in 5 out of the last 30-odd years has Britain actually delivered a budget surplus. Most of the time the state's income has been less (at present significantly less) than its expenditure. Funnily enough the last time we lived within our means was in the period at the end of the Major government and the beginning of the first Blair term. We lived within our means after the 1997 election because Labour, terrified of a repeat of the infamous "Labour's tax bombshell" headlines said to have dished John Smith in 1992, pledged to stick to Tory spending plans for its first couple of years in office. After about 2000, with re-election looming, Gordon Brown turned on the spending taps and never looked back.
When I borrow, I'm committing future income to repay interest and capital. That seems legitimate when I'm the person who is going to be making the repayments. But when Governments borrow long term they are committing future citizens to do the paying. What Orr is asking is that my (and her) children should pay in the future to enable us to live better today. This might be fine if the process of borrowing could be extended indefinitely into the future, that's to say if our children could ask their children to make the same sacrifice. But what events have demonstrated so eloquently in the last five years is that this process can't go on forever. The debt markets won't carry on lending ad infinitum. And what can't go on forever must come to an end.
The credit crunch has ensured that we have reached that point. In future our children are not only going to have to live within their means, but they are also going to have to get on top of the stock of debt we incurred to provide the sort of society that Orr and millions of others wanted to see. In the West we have used debt, both public and private, as a sticking plaster to cover up our chronic lack of competitiveness.
So how about this.
"A nation's greatness is measured by whether it is willing to live at the expense of its children".
Discuss.
* Yes, I know we could tax the rich more. And it might raise a bit more money. But a) the rich actually tend to have got rich by working really hard; discouraging them might be counterproductive, b) raising taxes tends to dampen spending and therefore demand, c) there are relatively few rich people compared to the vast numbers of middle earners, d) rich people tend to derive their income from assets that are easy to move around, and e) rich people tend to have accountants who can help them minimise their tax exposure. Denis Healey pledged to tax the rich "until the pips squeaked": it didn't bring in much money and Healey had to go to the IMF instead. Anyone who thinks Britain's fiscal black holes can be filled by taxing the rich is living in dreamland.
