Budget Tinkering


Budget Tinkering is not Structural Reform

By Sean Garman

The 2013 Budget has sunk without a trace – just as intended. Last year’s budget was a complete political farce with the Conservative Party looking like both incompetent and politically sadistic. Not a good combination. Yet Britain’s troubles are so deep-rooted that we cannot afford to have stasis on public policy in anticipation of an election. Osborne has chosen to tinker with the edges, and hope the economic cycle and the arrival of Mark Carney can do the rest for him.

Britain faces very large structural problems that desperately need to be addressed by Westminster. The ageing population will place extraordinary strain on the NHS and social services, pensions and ultimately the budget position. This overarching problem is compounded by a lack of investment in energy generation, air transport capacity, and house building, that requires the government to dramatically boost public and private sector investment. These structural problems need to be solved during this “age of austerity”.

The Coalition has been staggeringly unsuccessful in addressing these structural problems left behind by the destructive Blair-Brown era. This is partly because of genuine differences of opinion between Conservatives and Liberals, and because there is the lack of a strong and determined leadership team that competently executes reform. It is unrealistic to think structural problems can be easily solved but we should expect at least some movement to solve them.

The problem is the Coalition (or is it Cameron, himself?) tend to be tactically clever, but strategically stupid. Agreeing on AV, House of Lords reform, and Gay Marriage are tactically clever to bring in the Lib Dems into a coalition and appear “modern”, but strategically stupid because it looks like self-indulgent Westminster-bubble legislation. It divided the Coalition, and in the case of Gay Marriage divided the Conservative Party. It was a massive distraction from the main game, the economy, and spent precious political capital that could have been used to address some of the structural problems I mentioned earlier. What’s worse is that despite dividing themselves and spending this political capital, only one of the pieces of legislation (Gay Marriage) will be implemented. So much time spent on so little accomplished!

I do not want to leave on a sour note because maybe No. 10 realises that they need to change their style. Cameron seems to be taking more serious strides such as the appointment of Michael Fallon to the Department of Business, Innovation and Skills (and his recent quasi-promotion with responsibility for energy), and recent tweaks to planning permission and energy exploration. These are welcome steps but are very small when compared with the large problems this country faces. Let’s hope that the Coalition gets that what they have done in the past has not worked properly and that a change in leadership to competently execute a reform agenda is needed.


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