The false economy of the Coalition’s short sighted cuts

We heard the shriek of ‘Noooooooooo!’ in the North East. The Government’s ideological decision to renege on support for Forgemasters in Sheffield triggered anger but also bewilderment among people I know in Yorkshire.

By Neil Foster, policy and campaigns officer, Northern TUC

We heard the shriek of ‘Noooooooooo!’ in the North East. The Government’s ideological decision to renege on support for Forgemasters in Sheffield triggered anger but also bewilderment among people I know in Yorkshire. Cancelling this loan was a ‘false economy’ since the investment would have brought economic benefits across an extensive supply chain, linked with universities and secured many new jobs.

Since then we’ve seen many more examples of ‘false economy’ primarily through the decision to savagely cut public spending. As the welfare bill expands to pay for an estimated 1.3 million job losses, the declining spending power of those who are made unemployed will hamper business growth and curtail the tax receipts needed to narrow the deficit.

Each region has its own painful tale to tell and the TUC’s Cutswatch chronicles the fallout to jobs and services.

Among the list a pattern is emerging. Many of the cuts are short sighted and have scant regard for the social and economic consequences. Yet we still rarely hear of the ‘false economy’ of these measures in the media, pubs or workplaces. As Gary Younge explained in The Guardian yesterday, this is because the Left is currently losing the key language wars.

Formidable economist David Blanchflower and Paul Krugman have outlined a clear and credible alternative economic agenda. Despite the cogency of their arguments, they can appear ‘counter-intuitive’ to many members of the public. Having the correct arguments is of little use if few are listening.

In contrast and in a manner reminiscent of Thatcher, the Government routinely compares household budgets with that of public spending. It may be wrong, but it’s understandable and in danger of taking root. Medhi Hasan astutely pointed out to my TUC colleagues recently of the need to sit down and reframe the whole debate on cuts. I think he’s right.

So what language should we be deploying? Let’s talk more about how the Government risks ‘taking wages from the economy’, is ‘undermining growth’, ‘only making matters worse’ and appears ‘soft on the banks but hard on the poor’. Our alternative economic agenda should be characterised around the need for ‘job creation not job destruction’, ‘to invest in growth’ and ‘to work our way out of recession’.

Sunny Hundal argues ‘if we want to turn public opinion against the Coalition’s cuts then we have to start with a proposition they won’t be immediately sceptical of’. Describing all cuts as ‘an attack on public services’ may be accurate, but it will be insufficient to win mainstream public opinion to our position.

There is however much to be said for characterising most Government’s spending cuts as a ‘false economy’. This acknowledges that what may initially appear superficially plausible does in fact hide the true social and economic cost which we’ll be paying. It allows us to adopt a tone of pragmatism and experience, while our criticisms can be readily supported by evidence.

Starting today we should also begin to reframe debate online and proactively encourage tweeters to adopt the #falseeconomy hashtag alongside tweets relating to cuts in jobs and services. By widely adopting this hashtag we will take one step forward in redefining this debate. From now on all our arguments and language must go with the grain of public thinking to maximise support. We simply cannot risk doing otherwise.

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