Osborne's Gamble Is the Country Ready to Vote for Austerity?

The Herald › October 07, 2009

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Summary

USTERITY is hardly a rousing election concept. It was the necessary underpinning for a speech designed to convince the electorate that the Conservatives, with George Osborne as Chancellor, would not flinch from the spending cuts required to reduce the nation's deficit. The message had to convey that the tough medicine would not favour the rich and squeeze the poor and so the refrain of "We're all in this together, " with its suggestion of wartime spirit, was repeated regularly. Proof was offered with the admission that it would be "grossly unfair" not to keep Labour's higher 50per cent income tax rate in present circumstances. What was left to speculation, however, is the threshold at which it would be levied and in what future circumstances it would be fair to abolish it.

His political task was to make palatable the prospect of GBP23bn worth of public spending cuts over the first parliament of a Conser vative government. It is an undoubted gamble to ask the electorate to vote for a party on the basis that it will freeze pay, cut tax credits and require people work longer before qualifying for their pension. The medicine was sweetened with a trade-off: the pay freeze for all public sector workers earning more than GBP18,000 will safeguard 100,000 front-line jobs that would otherwise have to go. Much will depend on whether that argument convinces workers across the public sector as it is subjected to analysis in the months between now and the election. Exempting those below GBP18,000 and the army in Afghanistan will help his claim not to be balancing the budget on the backs of the poorest, and doubling the operational allowance of those on active service was a politically astute and cost-effective titbit.