Government of the technocrats, by the technocrats, for the technocrats

Democracy must not be regarded as merely an optional extra when solving economic problems.

Greece and Italy now have new Prime Ministers. Neither of them have had to endure the indignity of actually standing for election. New Italian PM, Mario Monti, is a former European commissioner and an economist. Lucas Papademos, the new Greek Prime Minister, is a former Governor of the Bank of Greece (there is a great irony in a central banker being imposed as Prime Minister following a debt crisis fuelled by poor central bank decisions and a collapse of the banking system).

The European debt crisis has been almost as damaging for democracy as it has been for the economies of the Eurozone. In Greece and Italy, democratic legitimacy is clearly regarded as an unaffordable luxury.

If democratically elected leaders do not satisfy the markets, the IMF and the European Commission, they are now, in effect, summarily dismissed, without any reference to the wishes of the people. The unsubtle message coming out of Greece and Brussels is that international bodies believe that democratic governments have failed to tackle the economic crisis and should be replaced with more reliable (and controllable) technocratic governments.

Rule by technocrats has replaced rule by the people - with unelected, economically orthodox international bodies like the European Commission and the IMF working with unelected technocrats now heading up national governments to implement tough austerity measures that have never received public backing. The democratic deficit at the heart of Europe has become a democratic chasm.

The events of the past week are immensely important. For the first time in a generation, European countries are now headed by individuals who have had no popular endorsement at the ballot box. It is difficult to see why the people of Greece and Italy should see their new governments as representing their wishes when they have been imposed from above.

If people no longer see their Governments as being democratically legitimate and no longer see the ballot box as a legitimate way to express their grievance, they may be more likely to consider other ways to express that grievance. This is particularly dangerous at a time of painful austerity and falling living standards. Technocracy will have no answers for growing popular discontent.

The growing power of international bodies has steadily diminished democracy. Rule by place men has gradually replaced rule by democratically elected individuals who have been elected and can be removed. To an extent, the imposition of technocrats on Italy and Greece is the apotheosis of the technocratic concept that runs through bodies such as the IMF and European Commission

Indeed, Tony Benn famously warned of this threat in a mighty speech during the Maastricht debate, pointing out that, to a democrat, a good King is never better than a bad Parliament. He said:

We are discussing whether the... people are to be allowed to elect those who make the laws under the which they are governed... Secondly, we say to my favourite friends, the Chartists and suffragettes, "All your struggles to get control of the ballot box were a waste of time. We shall be run in future by a few white persons, as in 1832."

Government of the technocrats, by the technocrats, and for the technocrats is hugely undesirable and, by its very nature, bad for democratic legitimacy. It is not a long-term solution and should not have been considered as a short-term one. Democracy must not be regarded as merely an optional extra when solving economic problems.

If politicians do not bring their people with them, they risk creating extreme alienation and discontent. If politicians do not trust the people, why should the people trust their politicians? When they are working to solve the economic crisis engulfing Europe, the continent's leaders must be very careful that they don't create a new crisis of political legitimacy, which will have even more serious long-term consequences.

David Skelton is Deputy Director on Policy Exchange, an independent think tank. You can follow him on Twitter @djskelton

David Skelton is the director of Renewal, a new campaign group aiming to broaden the appeal of the Conservative Party to working class and ethnic minority voters. @djskelton

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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.