From the SMF Archive: The Serious Years

This has been the month of anti-politics and there might be a year of anti-politics ahead so, in a counter-cyclical way, I’m using our ‘From the Archive’ blog to write about a piece of serious political writing.

The SMF published an essay collection in October 2005 called What’s Right Now: Conservative essays on the role of civil society, markets and the state. That’s a serious title for the cover, and there’s serious content inside too.

One of the contributors is the now Chancellor George Osborne MP (Prime Minister David Cameron also features in the collection). Writing five years before coming to power, Osborne pre-figures an independent body for producing fiscal forecasts (though under the significantly less snappy name of the Fiscal Projections Committee); bringing the Government’s public sector pension liabilities more transparently onto its balance sheet; and tax simplification. Dull stuff, right? But structural and serious.

The essay is organised around the “principles of a Conservative economic policy”. Those include increasing productivity, which isn’t everything but, as Alex Salmond channelling Paul Krugman said this week, in the long run is almost everything. And reducing the long-term demands on the state. This section is the sharpest, starting with a clear statement that it is necessary for government to provide a safety net and core public services that are free at the point of use, then opening up questions about where risks might be better shared across society outside of the core. As he puts it, “we cannot be satisfied with a situation where the public sector takes an ever-increasing share of our national income. It damages economic dynamism and undermines the civic society that underpins our freedom.”
Far from a consensus-seeking platitude, this is obviously political and argued for as such. To put it a different way, countries tend to consume higher levels of healthcare as they get richer, but if that consumption is supplied entirely from the public sector, then growth in the size of the state gets written into the logic of economic development. It’s the task of politics to debate this rather than accept it as inexorable.

A second pro-politics example from the essay: Osborne goes on to talk about updating transport infrastructure. “In the case of roads,” he says “we can do that by paying for new roads through tolling.” Now, tolling is controversial. Arguably, making users pay for roads will increase use of alternative, less carbon-intensive forms of transport and allow a switch in taxation from what is a poll tax on drivers to a charge that adjusts by useage. But, whatever the principles, this is hardly a popular measure and the Labour Government considered then dropped ideas about road pricing themselves. Why on earth is Osborne bringing it up? It’s almost as if he wants to spur a political argument.

Now as Chancellor though his enthusiasm for this alternative approach has cooled. He announced a plan for a new toll road – the A14 – then switched to a non-tolled alternative. Fuel duty in successive fiscal events has been kept off the ‘escalator’, i.e. the opportunity to adjust the tax burden on motorists by useage is not being taken. So there are popular compromises, if you like, but the starting points are political. We’re still in the serious years. The question is: how long will they last?


Related items:

Page 1 of 1