Jonathan Todd

Philip Stephens makes a striking observation in the FT noting the harshness of the coalition’s rhetoric on the public sector and public servants:

“The government’s tone of voice is one that suggests all public spending is wasteful, and all those working in central or local government are on the make or take. Perhaps, given his goal of a smaller state, this is Mr Cameron’s intention. If so, it is neither sensible nor politically astute. It also happens to be unfair.”

How long before this unfairness jars with the public?

I have a childhood memory (perhaps, I mean nightmare) of a member of the public describing themselves as a civil servant on Noel’s House Party and Noel doing nothing to discourage the booing which came from the audience as a result. I didn’t even know what a civil servant was at the time but this booing didn’t seem fair to me. Of course, this may all be false memory. There is no doubt, however, that this government wants to bring public servant bashing back into vogue.

I had the piece below published on Labour Uncut on 16 June 2010:

The Daily Telegraph isn’t normally essential reading for Labourites. But yesterday it should have been, especially for Harriet Harman. Fraser Nelson set the backdrop to the politics of the deficit and the “emergency” Budget, to which she, as acting leader, will respond. This week’s report from the new Office of Budget Responsibility (OBR) dramatically changes this political context. Nelson has been quick to realise this and, while our instincts differ markedly from his, we need to be equally fleet-footed.

The limited discussion on the deficit in the leadership election has denied our candidates the opportunity to demonstrate this quality. Though, of course, they could engineer such an opportunity for themselves. I’d be impressed if any of them do flesh out a more substantial economic platform, not least as The Economist is right to note that, “nothing will make or break the next leader of the opposition like his response to the government’s austerity programme”.

The coalition, preparing the ground for the scorched earth to come, has grasped any and every opportunity to exclaim their horror that “it is even worse than we thought”. Labour, apparently, have not just cooked the national books, but eaten and spat them out again. It’s what we always do. We can’t help ourselves. It is the coalition’s duty to pick up the pieces; in the national interest, of course.

The coalition has pushed this story since its creation. It matters whether it is believed. It wasn’t until after black Wednesday that the spectre of the winter of discontent stopped being a drag on Labour’s support. If the deficit is perceived as Labour’s deficit, then the pain of reducing it will be a similar drag. However, a major spanner has been thrown in the coalition’s attempts to embed this perception. As Nelson observes, “something is going badly right” for the British economy.

The OBR reported earlier in the week, as Nelson noted, that unemployment “will be almost 200,000 lower than had been feared. Economic growth will not be quite as strong but the tax revenues – which are far more important – will come in much more strongly than Mr Darling gloomily forecast.” So, the reality is that public finances are in better shape than the Treasury forecasts bequeathed to the coalition gave them to expect.

How troubled George Osborne must be that this reality, so out of kilter with his desired spin, has been presented by the OBR. After all, he established this body, as Nelson puts it, with the intention to “demolish the economic Potemkin Village that Gordon Brown built during his time in Downing Street and reveal the full extent of his fiscal vandalism”. Yet, rather than exposing Labour irresponsibility, the OBR has shown “Mr Osborne’s election goal – to abolish “the bulk” of the structural deficit by 2014 – would have been easily achieved had Mr Darling remained in place. No more taxes need to be raised, or budgets cut, to honour this Tory manifesto pledge.”

This is a tremendous vindication for Darling and inconvenience for Osborne. If Osborne now persists with plans to cut further and faster than intended by Darling, he will be doing so for reasons of political belief, not economic pragmatism. Nelson understands this and urges him to press on “because he wishes to restore the power balance between state and society. A true liberal believes that people spend their own money more wisely and effectively than government can do on their behalf.”

While Rachel Reeves has expertly explained why comparisons – encouraged by the scaremongering spin of the coalition – between the UK and Greece are spurious, our deficit does require careful management. However, there is a world of difference between the careful prudence of Darling’s plan and the ideological, small-state zeal that would carry Osborne beyond it. Nelson encourages Osborne in this direction because “with Labour embroiled in a five-way leadership contest, he will never face weaker opposition”. Precisely why we must be vigilant against him.

What the formation of the coalition told Philip Stephens about David Cameron was that “he is a Conservative in the centrist tradition of Harold Macmillan rather than a radical such as Margaret Thatcher”. However, we need to be ready for his Chancellor leading the coalition on a distinctly Thatcherite course in his first Budget. Having scrapped the Child Trust Fund and the Future Jobs Fund this might be no surprise, particularly after the coalition agreement made, as James Purnell noted, “no mention of abolishing child poverty. Of reducing inequality. Of protecting education funding. Of guaranteeing jobs for the long-term unemployed.”

In responding to Osborne’s Budget, the key distinction is between actions that can be justified as decisions of economic necessity and those that are driven by political belief. We strip ourselves of credibility if we do not acknowledge the necessity of some pain. We can absorb more of this pain in the form of taxes than Osborne will propose, but we can’t hide from the need for some spending cuts. To remain credible we need openly to concede this, but we also need clearly to identify the areas in which Osborne is acting as the ideological vanguardist that Fraser Nelson wants him to be, losing sight of the sober economic reality presented by the OBR.

That this reality is much brighter than the coalition’s spin is a credit to the decisions we made in office. We need to be equally strategic and forensic in our economic decision making in opposition.

Philip Stephens has previously written in the FT that “Turkey has turned east as Europe clings to the past“. Today Gideon Rachman writes in the FT:

“It was Ukraine’s misfortune that the Orange Revolution took place just as the European Union was succumbing to “enlargement fatigue” – following the shock of moving from 12 members in 1995 to 27 members today. As a result, the EU has given Ukraine an almost criminal lack of encouragement, as the country attempts to secure simultaneously its independence, its democracy and its prosperity. Everybody knows that actually joining the Union is a long and arduous process – since it involves transforming the laws and economies of the applicant countries. But it would have cost the EU very little to give Ukraine the encouragement of holding out the prospect of eventual membership.”

While Turkey probably also remains “a long and arduous process” away from EU membership, Turkey has been knocking on the EU’s door for decades. This article in Newsweek suggests that they got tired of getting no answer and focused instead on becoming a dominant player in the Middle East.

The transformation of central and eastern Europe that the EU encouraged by opening itself up to membership from post-Communist states is one of its great successes. So, it is all the more sad to witness the consequences of the present “enlargement fatigue”. We all know – most especially people in states like Turkey and Ukraine – that EU membership for many of the states that border the EU remains, for better or for worse, a long way away. Nonetheless, the EU should still be capable of acting as a stronger magnet to these states than it has been in recent years. The carrot doesn’t have to be as big as full membership in short order. But it has to be substantial enough to retain the interest of these states. Otherwise, they will drift away towards other centres of power (the incoming Ukrainian president is notoriously close to Moscow and the Turkish president describes Mahmoud Ahmadinejad as his “good friend”). The ‘soft power’ of all EU states is all the weaker as a result.

It is difficult to overstate the strategic importance to the EU of Turkey. So, a sense of regret and concern should be felt across the union when Recep Tayyip Erdogan, Turkey’s Prime Minister, says of Mahmoud Ahmadinejad, Iran’s Holocaust denying President, that “there is no doubt he is our friend.” But Europe has not been awash with such sentiment in recent days because, as Philip Stephens argues, Europe has clung to the past as Turkey has turned east.

Must Europe wither? It surely shall if we do not wake up and smell the coffee and move on from the navel gazing and introversion that have marked recent years. Tony Blair suggested three years ago that the big distinction in politics was between open societies and those which were closed. “If you take any of the big motivating debates in politics today”, argued Blair, “each essentially has, at its core, this question: ‘Do we open up? Albeit with rules and controls, or do we hunker down, do we close ourselves off and wait till the danger has passed? Is globalisation a threat or an opportunity?’” The EU has chosen to hunker down, to close itself off, not just to Turkey but to a world that is hurtling towards a G2 in which there is no place at the top table for Europeans.

British pro-Europeans, like Nick Clegg, must have watched these developments with horror and wished that the EU could turn itself around and open itself up. The conclusion of the Lisbon process offers a great opportunity for this and Blair’s candidacy for the EU presidency offers the leadership and gravitas necessary to achieve this. Even his advocates, such as Charles Grant and Will Hutton, do not fail to find fault with Blair. Yet “the message” Grant hears “in places such as Beijing, Delhi and Washington is that if the EU wants to be taken seriously, it should choose a big name as president”. Is there another big name candidate? No. Thus, the choice is to be closed (and deride Blair as a ‘superstar’ unworthy of support as Clegg did today) or open (and go for Blair precisely because he is a superstar in the capitals that now matter most).

It is not just a betrayal of Clegg’s pro-European credentials for him to fail to back Blair, it is an abdication of his profession. Politics exists, after all, as J. K. Galbraith knew, “in choosing between the disastrous and the unpalatable”. Clegg may find Blair unpalatable; so do Grant and Hutton, to some extent. But Turkey getting into bed with Iran is the first of many disasters that shall befall the EU if it continues on its current trajectory. It is because Grant and Hutton have retained the ability, unlike Clegg, to distinguish between the unpalatable and the disastrous that they are able to bring themselves to support Blair.

 I have previously asked: Must Europe wither? And now one of the most articulate and leading pro-European voices in the UK, Charles Grant, has had cause to ask: Is Europe doomed to fail as a power? Today seems a particularly sobering day for Europeans to reflect on such questions as the US and China this morning began a two-day “Strategic and Economic Dialogue” in Washington DC, led by Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner and their Chinese counterparts. This illustrates the “obvious danger” identified by Philip Stephens ”that the US and China will bypass Europe by creating a G2″. The New Republic ask: “Which China will be sitting across the table from Clinton and Geithner today?” But Europe is an after thought and tomorrow it may be even more so. Europe needs to much more urgently wake up and smell the coffee than the scant coverage of these debates in the mainstream of European media suggests.