Wednesday, October 6, 2010

COMMENTARY VERSES REALITY?

This week saw a growing disconnectivity between the narrative by most of the political press and the opinions of the rest of the country.

If you had just listened to the TV news or read most of the printed press during the last few days of the Conservative conference, you would have thought that the decision to cut child benefit for higher earners was possibly the single biggest political mistake since the poll tax and, as a result, the Conservative Party was in meltdown.

Yet, a poll for YouGov on Monday night found 83 per cent of voters back Chancellor George Osborne's announcement that child benefit will not be paid to parents to earn more than £44,000 a year from 2013. Another 86 per cent of respondents agreed with introducing a £500 a week limit to the benefits unemployed families can claim.

In addition, YouGov found that whilst 20 per cent felt that the Coalition Government were to blame for the cuts in public spending, 44 per cent were blaming the last Labour government. That seems to be a very different picture from those painted in political blogs and columns this week.

The other issue is whether the Government will actually go through with all of the cuts as planned. There are certainly doubts cast in the Financial Times today about such a move with officials telling the paper that the Treasury is working on plans to “reprofile” spending cuts next April, spreading the pain of deficit reduction more evenly over the next few years.

According to economics editor Chris Giles,

"The Treasury insisted there was absolutely no change in the government’s economic strategy of eliminating the current structural deficit within a parliament, which David Cameron reiterated in his speech to the Conservative party conference on Wednesday. But it would not confirm that the spending review on October 20 would maintain the £23bn spending cuts in 2011-12, rising to £83bn a year cuts by 2014-15.


This week it has already become clear that many of the cuts will be difficult to start in 2011-12. The withdrawal of child benefit from higher-rate taxpayers is set to be implemented only in 2013-14. The government cannot walk away from its existing defence contracts, such as the two new aircraft carriers, without penalties. The universal credit, to replace many existing benefits, will not start until late 2013 at the earliest. And plans to introduce higher tuition fees for students will not be ready until later in the parliament. There is no doubt that most of the £32bn of spending cuts and tax rises set for 2011-12 will still be implemented, but the fiscal consolidation might be delayed without undermining the government’s ambition to eliminate the current structural deficit before the next election, scheduled in 2015".

As a result, the expectations of deep cuts immediately may not be realised, which may change the political narrative completely. Therefore, despite observations from the  commentariat that the Conservatives have already lost seats at the next Assembly elections before they even go to the polls, the reality is many of the so-called cuts will not take place before May 2011.

Add to that the poll findings that a significant number of the general public actually understand not only why we need reductions in public expenditure but who is to blame for the reckless policies that led to the country's disastrous financial position of a trillion pounds of public debt, then it presents a very different message.

The job for the Welsh Conservatives is clearly to keep hammering home that message until next May.