No one doubts the need for deficit reduction. If I think about the difficult decisions I had to make 5 years ago or so, when I realised that my personal debts meant that my monthly payments to creditors practically outstripped my income. Something had to give, and that something was my credit cards and loans. The experience was painful, and sacrifices were needed. But today I have just a small amount of remaining debt (other than the mortgage and every month I have money to spend. Christmas, which used to be a time to dread has come and gone and I owe no more today than I did last month.
The nation’s debt is thankfully much greater than anything I could conceive personally, but the principles are the same. The causes of this are well written about, but in my opinion not worthy of mention since it can’t help us now. The Government takes an interesting approach to trying to balance the books. Reducing the size of the public sector I can understand; it hurts me to say but a lot of jobs were created and money was wasted. You need to be careful about the ways in which you cut services and with them jobs, it creates uncertainty and fear and leads to risk aversion. More jobs are lost and less created because of this. If jobs and services don’t spring up elsewhere then some of those people become unemployed or else take lower paid, lower status jobs. This in turn means that those who might have taken those jobs are shifted further down the pile. The most vulnerable in society suffer most from this approach.
In turn the Government has taken a look at the growing benefits bill and decided that this can and must be reduced. dependency on the state needs to be reduced (even as someone who believes in the welfare state) I can hardly argue with this desire. But by starting with the most vulnerable in society this Government risks the label so often given to the Tories of the past. It feels nasty to target benefits to disabled children and those with cancer. Especially in a week when Cameron has said that he would like to see the 50% tax rate for those earning £100k to be abolished even though it is bringing plenty of tax revenue into the exchequer.
Tonight the House of Lords has shown it’s worth and voted for changes to the Welfare bill associated with these elements of cuts. It is a shame that they haven’t shown the same approach with the Health and Social Care Bill!