Are the Tories that Dangerous?

Getting the Tories out is the main goal of many on the left for Thursday’s election.

My gut agrees, but in the final weekend before the election, I realised that I wanted a more logical conclusion on this. I’ve included below various interesting sources that I found and would recommend. I considered the following questions.

1. Is austerity built on shaky foundations?

These two articles (from cross bench peer Robert Skidelsky in the New Statesman and economist Paul Krugman in the Guardian) go into detail on why austerity and deficit reduction weren't the only options for the Coalition. I am relatively sympathetic to the view that austerity was a popular approach in 2010 and economists seem better at analysis of the past than the future, but less sympathetic to the level this foundation was and continues to be relied upon by the Tories.

2. Can austerity support strong economic growth?

This seems to a major theme from the Tories. The idea that they were forced into austerity, but they’ve still supported relatively strong economic growth. I’m not convinced that this is the full story especially with the coincidence that the higher growth started when further cuts were significantly reduced and instead pushed forward to the next parliament.

The following is a quote from Robert Skidelsky’s article referenced above.

“Growth’s failure to materialise dished the Chancellor’s five-year timetable for cutting borrowing. With government revenues failing to recover, Osborne quietly slowed down the speed of his cuts, eventually declaring that a further £35bn of consolidation would be needed in the next parliament. The Bank of England injected a further £175bn into the economy between October 2011 and July 2012. In 2012, the government started subsidising bank lending for mortgages through its “Help to Buy” scheme. The shaky recovery that the easing of austerity brought about in 2013 made possible the Chancellor’s rhetorical masterstroke: we are growing faster than any country in Europe. This shows austerity works!”

3. Was austerity applied fairly or responsibly?

“Freedom, fairness and responsibility” were the first three words after the title page in the Coalition’s 2010 manifesto. The forward includes: “Difficult decisions will have to be taken in the months and years ahead, but we will ensure that fairness is at the heart of those decisions so that all those most in need are protected”.

I thought I could get to grips with this question by reading end-of-term reviews of the incumbents, but these were more difficult to find than I expected. But here are some great sources that I found:

A.     In January, the Centre for Analysis of Social Exclusion (CASE) at LSE published a series of reports and video presentations on the Coalition's Social Policy Record (here’s the main summary).

I've only had a chance to experience a small portion of this, but from what I've seen, it's fascinating and wonderfully in-depth (unlike so much of the news). 

This also helped me to understand the framework that the Coalition set up for deficit reduction. They chose to focus on cutting spending rather than increasing taxation (77% vs 23%) and actually decreased taxes by dropping the top tax rate of 50% and raising the non-taxable personal allowance from £6,475 to £10,000. They protected pensions, the NHS and education from cuts (although also didn’t increase their budgets as many think was necessary), so the axe fell very hard on what was left.

I'd love to pass on more highlights from it, but I’ll stick to only one graph from the summary document, which shows why I don’t believe the cuts have been applied fairly or responsibly.

Figure 2 The combined impact of direct tax and cash transfers was mostly regressive, moving incomes from poorer household to those that were better off.

Source: De Agostini, et al (2014)/EUROMOD. Figures show percentage change in household disposable income by income group due to policy changes, compared with May 2010 system uprated by CPI.

Other recommended resources are the following:

B.     The Institute for Fiscal Studies (IFS). I appreciated both that their research was so focussed and their willingness to point out plans from any party that they thought didn't make sense.

C.     Two more in-depth articles from the Guardian (Slick and slapdash, U-turning and dogmatic - the legacy of the coalition and Cameron's five-year legacy: has he finished what Thatcher started? , which arguably have a certain bias but I appreciated for the level of detail.

D.     An article from the Spectator, which comes to similar conclusions (although from a different angle) to the Guardian articles.

4. The Tories will keep some promises, but which ones?

This is a bit unfair as it likely applies to all politicians, but the Coalition's record on its main goals seems pretty poor.

These are the goals from the Coalition's 2010 manifesto, as highlighted in the CASE summary  report mentioned above. 

The incoming Government declared that its most urgent task was to tackle the country’s debts. Fail

But it also insisted that fairness would lie at the heart of its decisions “so that those most in need are most protected”. The better-off would be expected to: “pay more than the poorest, not just in terms of cash, but as a proportion of income as well”. Fail

Beyond deficit reduction, the Coalition set a further goal of improving social mobility and creating a society where “…everyone, regardless of background, has the chance to rise as high as their talents and ambition allow them”. Fail

Reforms to ‘welfare’, taxation and education were promised, with devolution of decision-making powers from central to local government and communities.  Success (Done but by giving greater responsibilities to local governments with cut budgets).

Defining its core values as “freedom, fairness and responsibility”, the Coalition pledged to deliver “radical reforming government, a stronger society, a smaller state and power and responsibility in the hands of every citizen”. Success! Not for the first part on fairness, but the Coalition has definitely succeeded on being a “radical reforming government” with a “smaller state”.

From this, I have to wonder what are the true goals of the Tories for the next parliament.

5. Do the Tories care about you?

I understand  that some people will tend to vote Tory and are likely justified in doing so. This is by no means an exclusive list, but if you're a public school educated elite, an executive, a small business owner or a pensioner, then I can see why you're likely to vote Tory.

But will their policies also hurt these groups of supporters?

 A. Small business owner or pensioner, how would a floundering NHS work into your plans?

B. Elite, executive or exporter, are you ready to risk your future on an EU referendum? 

6. This was a Coalition. What would a true Tory government do?

I don't have the answer for this one, but I wish I did!

As you can probably guess by this point, I'm not going to vote Tory. This was already the case before this research because of my gut feel that they’re creating a crueler country and society that I don’t want to support, but now I logically understand why I consider them dangerous, too.

If this is an area you’d like to consider further, I’d like to point out two endorsements for the election from the Observer and the New Statesman, which are much more eloquently argued than this blog post.