The Treasury has put together data on how its policies impact on people. Ministers have been sluggish at using it. (Photo:Getty)
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Hard choices lie ahead - here's how the next government might make them

The next government can use data to make cuts more effectively and in a fairer way than this one

One of the unforeseen consequences of coalition, combined with fixed-term Parliaments, is that we currently have a lame-duck government. Nothing is happening in terms of government policies – instead ministers are promising, on behalf of their own party not the government as a whole, to do things if they are elected to govern alone. The consequence has been the announcement or reannouncement of a series of gimmicks (for example, benefit sanctions for addicts refusing treatment) that the government had sensibly previously dismissed as impractical or counterproductive.

So civil servants aren’t doing any policy work. Instead, they are preparing for the really big event of the first few months of the next Parliament – the spending review.  As the Office of Budget Responsibility has pointed out, the government’s current “plans”, set out in the Autumn Statement, imply that total public spending, relative to GDP, would fall to its lowest level in 80 years.  The OBR also made it clear that these were simply assertions by the government as to what it would do – there are no actual spending plans as yet beyond 2015-16. For this reason, they should not be taken that seriously; indeed, the definitive survey of UK macroeconomists by the Centre for Macroeconomics found that only 1 in 10 thought the government’s plans were credible.

But there will be a spending review. And there will be, in the usual cliché, “tough choices” – even tougher than usual. As FlipChartRick’s venn diagram memorably puts it, anybody who thinks that you can balance the budget, not put up taxes and maintain public services at a reasonable standard is “living in LaLa land”.

Before the 2010 spending review, the Prime Minister said “we are all in this together”.  But of course, and inevitably, some individuals and groups lost out more or less than others. That doesn’t make the decisions taken then “unfair”; some were deliberate political choices, made by an elected government in the full knowledge of the consequences; some reflected the patterns of existing public spending and services.

However, any government has both a moral and a legal obligation to do its best to understand the consequences of its decisions – preferably in advance.  In particular, the 2010 Equality Act imposes a requirement on the government to take account of the impact of its decisions on equality of opportunity between different groups.   Since 2011, the Equality and Human Rights Commission has been looking at how that worked in practice in the Treasury and Whitehall in the 2010 Spending Review and since – and what lessons can be learned for the next Parliament. 

The EHRC also commissioned NIESR, and my colleague Howard Reed at Landman Economics, to model the overall impact of tax and spending decisions.  There is more about the background here; and more about our findings here.

 I would sum our findings as two-fold. First, the Treasury did its best (and better than it ever did before) with limited resources and inevitably imperfect data, to analyse the consequences of tax and spending decisions taken in this Parliament on different groups. Considerable progress has been made, and they deserve credit.  But, second, that with relatively limited extra effort and resources more could easily be done; and, perhaps more importantly, that if more analysis had been done decisions might well have been different.  One chart makes the point. It is difficult (although, admittedly, not impossible) to believe that a government genuinely committed to the principle of “we’re all in this together” would have deliberately chosen to implement a set of measures that bore far more heavily on low-income disabled families than any other single group.

Today, however, the EHRC publishes its final report, and it looks forwards not backward.  It makes five key recommendations:

  • Making sure the government has the best possible advice by nominating a body to have overall responsibility for advising Ministers on the impacts of tax and spending decisions on different people in society, including women, ethnic minorities and disabled people.
  • Assessing the combined effects on people of different decisions.  Decisions in different departments which affect women for example, should be assessed together for their total impacts.
  • Improving the coverage of evidence and analysis in the Equalities Impact Statement published alongside major government announcements, such as budgets and reviews of spending.
  • Improving the quality of data by engaging further with government departments to clarify expectations and reach a common and agreed approach on different types and sources of acceptable data and evidence.

"The EHRC, not me, is responsible for the recommendations. But for what it is worth, both as a researcher and as a former senior civil servant in the Treasury, DWP and elsewhere, I think they are practical, reasonable, and implementable; and that they would deliver a meaningful improvement in the quality of analysis available to Ministers when they make those inevitable "hard choices". "

Jonathan Portes is director of the National Institute of Economic and Social Research and former chief economist at the Cabinet Office.

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Hannan Fodder: This week, Daniel Hannan gets his excuses in early

I didn't do it. 

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“Why Brexit should work out for everyone”

And yesterday, there was his column on Conservative Home:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Or, to put it more concisely, courtesy of Buzzfeed’s Marie Le Conte:

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

If there any rhetorical technique more skin-crawlingly horrible, than, “Your response to my behaviour justifies my behaviour”?

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.