Cameron is wrong: the spending cuts are ideological

The Prime Minister says the cuts are not due to his “ideological zeal”. Here’s why he’s wrong.

In his New Year message, David Cameron attempts to rebut the charge that the government's spending cuts are ideologically driven.

He writes:

I didn't come into politics to make cuts. Neither did Nick Clegg. But in the end politics is about national interest, not personal political agendas. We're tackling the deficit because we have to – not out of some ideological zeal. This is a government led by people with a practical desire to sort out this country's problems, not by ideology.

Here are three reasons why he's wrong.

The coalition could have taxed more and cut less

There was an alternative to George Osborne's £81bn spending cuts: higher taxes on the richest in our society. The Chancellor has chosen to reduce the deficit through a 59:41 ratio of spending cuts to tax rises in 2010/2011, rising to 77:23 by 2015/2016 (see Table 1.1 in the Budget).

But as the graphic below from the Economist shows, most deficit reductions have involved a far more even split between tax rises and spending cuts.

Deficit-reduction

The coalition's deficit reduction programme relies more heavily on spending cuts than all but two of the largest OECD fiscal consolidations.

A higher level of tax rises on top earners would have enabled a more progressive programme of fiscal consolidation (the cuts are, by any measure, regressive) and, as I explain below, a less economically reckless approach.

The coalition could have raised more revenue through a tax on land value (69 per cent of which is owned by just 0.6 per cent of the population); a genuine crackdown on the £25bn lost each year through tax avoidance; a tougher, not a weaker, bank levy; and higher, not lower, corporation tax.

The decision to rely on punitive spending cuts to reduce the deficit was a political choice, not an economic necessity.

Spending cuts harm the economy more than tax rises

Economists are agreed that the government's spending cuts will hit growth harder than tax rises would. As Duncan Weldon explains at the excellent False Economy, the fiscal multiplier (the effect on GDP of a tax rise or a spending cut) proves as much. The Office for Budget Responsibility's own multipliers (see Table C8 in the Budget) show that the cuts will reduce growth by significantly more than the coalition's tax rises.

As the shadow chancellor, Alan Johnson, noted in his pre-Spending Review speech: "We know from the Office for Budget Responsibility's own figures that a spending cut hits growth twice as hard as a tax change – three times as hard when it's capital spending."

The government's decision to ignore such economic evidence is the result of an ideological preference for spending cuts.

The cuts are permanent, not temporary

When asked by a Fire Brigade worker last summer if funding would be restored once the deficit has been addressed, Cameron replied:

The direct answer to your question, should we cut things now and go back later and try and restore them later, [is] I think we should be trying to avoid that approach.

The Prime Minister's insistence that we should try to "avoid that approach" reveals an ideological attachment to the small state and to low levels of public spending. The result will be permanently shrunken public services.

The cuts will reduce public spending from 47.3 per cent of GDP in 2010/2011 to 39.8 per cent in 2015/2016 – equivalent to reductions made by Margaret Thatcher between 1979 and 1990. But for many on the right, this is just the beginning of their long war against the active state.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Forget the flat caps - this is what Labour voters really look like

Young, educated women are more typical than older, working-class men. 

In announcing the snap election, Theresa May set out her desire to create a “more united” country in the aftermath of last year’s referendum. But as the campaign begins, new YouGov analysis of over 12,000 people shows the demographic dividing lines of British voters.

Although every voter is an individual, this data shows how demographics relate to electoral behaviour. These divides will shape the next few weeks – from the seats the parties target to the key messages they use. Over the course of the campaign we will not just be monitoring the “headline” voting intention numbers, but also the many different types of voters that make up the electorate. 

Class: No longer a good predictor of voting behaviour

“Class” used to be central to understanding British politics. The Conservatives, to all intents and purposes, were the party of the middle class and Labour that of the workers. The dividing lines were so notable that you could predict, with a reasonable degree of accuracy, how someone would vote just by knowing their social grade. For example at the 1992 election the Conservatives led Labour amongst ABC1 (middle class) voters by around 30 percentage points, whilst Labour was leading amongst C2DE (working class) voters by around 10 points.

But today, class would tell you little more about a person’s voting intention that looking at their horoscope or reading their palms. As this campaign starts, the Conservatives hold a 22 per cent lead amongst middle class voters and a 17 per cent lead amongst working class ones.

Age: The new dividing line in British politics

In electoral terms, age is the new class. The starkest way to show this is to note that Labour is 19 per cent ahead when it comes to 18-24 year-olds, and the Conservatives are ahead by 49 per cent among the over 65s. Our analysis suggest that the current tipping point – which is to say the age where voters are more likely to favour the Conservatives over Labour – is 34.

In fact, for every 10 years older a voter is, their chance of voting Tory increases by around 8 per cent and the chance of them voting Labour decreases by 6 per cent. This age divide could create further problems for Labour on 8 June. Age is also a big driver of turnout, with older people being far more likely to vote than young people. It’s currently too early to tell the exact impact this could have on the final result.

Gender: The Conservative’s non-existent “women problem”

Before the last election David Cameron was sometimes described as having a “woman problem”. Our research at the time showed this narrative wasn’t quite accurate. While it was true that the Conservativexs were doing slightly better amongst young men than young women, they were also doing slightly better among older women than older men.

However, these two things cancelled each other out meaning that ultimately the Conservatives polled about the same amongst both men and women. Going into the 2017 election women are, if anything, slightly more (three percentage points) likely overall to vote Tory.

Labour has a large gender gap among younger voters. The party receives 42 per cent of the under-40 women’s vote compared to just 32 per cent amongst men of the same age – a gap of nine points. However among older voters this almost disappears completely. When you just look at the over-40s, the gap is just two points – with 21 per cent of women and 19 per cent of men of that age saying they will vote Labour.

With both of the two main now parties performing better amongst women overall, it’s the other parties who are balancing this out by polling better amongst men. Ukip have the support of 2 per cent more men than women, whilst the gender gap is 3 per cent for the Lib Dems. 

Education: The higher the qualification, the higher Labour’s vote share

Alongside age, education has become one of the key electoral demographic dividing lines. We saw it was a huge factor in the EU referendum campaign and, after the last general election, we made sure we accounted for qualifications in our methodology. This election will be no different. While the Conservatives lead amongst all educational groupings, their vote share decrease for every extra qualification a voter has, whilst the Labour and Lib Dem vote share increases.

Amongst those with no formal qualifications, the Conservative lead by 35 per cent. But when it comes to those with a degree, the Tory lead falls to 8 per cent. Education also shapes other parties’ vote shares. Ukip also struggles amongst highly educated voters, polling four times higher amongst those with no formal qualifications compared to those with a degree.

Income: Labour’s tax increase won’t affect many Labour voters

John McDonnell, Labour’s Shadow Chancellor, has already made income part of this campaign by labelling those who earn above £70,000 a year as “rich” and hinting they may face tax rises. One of the reasons for the policy might be that the party has very few votes to lose amongst those in this tax bracket.

Amongst those earning over £70,000 a year, Labour is in third place with just 11 per cent support. The Conservatives pick up 60 per cent of this group’s support and the Lib Dems also perform well, getting almost a fifth (19 per cent) of their votes.

But while the Conservatives are still the party of the rich, Labour is no longer the party of the poor. They are 13 per cent behind amongst those with a personal income of under £20,000 a year, although it is worth noting that this group will also include many retired people who will be poor in terms of income but rich in terms of assets.

Chris Curtis is a politics researcher at YouGov. 

0800 7318496