The New Statesman this week noted that the major political parties are in a “conspiracy of silence”: failing to describe the impact of their proposed policies. Cynical politicians know that many people will vote without clearly understanding what is on offer. They also know that voters have short memories and that pre-election promises can be broken without apparent damage to their parties. Democracy, though, suffers as people become disillusioned with politics and many, if they vote at all, use their votes to protest – for example by voting for UKIP.
George Osborne’s Autumn Statement offered to cut taxes, whilst nevertheless promising to close the deficit. That is dishonest unless he explains where the corresponding cuts in expenditure would fall. Neither has Ed Balls clearly described what alternative he could offer. Detailed election manifestoes need to be available very soon, so that the Office for Budget Responsibility can cost them before May 2015.
Politicians are clearly nervous about going into an election campaign with promises of more austerity, but there are alternatives to further cuts:
Several economists, including the IMF’s chief economist and Oxford’s Simon Wren-Lewis, have pointed out that austerity programs increase deficits and reduce economic growth.
Others have pointed out the benefits of ‘middle-out economics’: the economy would grow faster, and the deficit would shrink more quickly, if people on lower incomes were to earn more. Tax receipts would be higher, benefit payments would be lower and the aggregate demand in the economy would be higher.
And wealthy pensioners could afford to pay more, as pointed out by The Economist: “Britain’s fiscal problems are partly the result of over-generous spending on the old. They should pay off some of the debts instead of passing them all on to the young.”
The creation of the OBR was potentially of great benefit to British democracy. Politicians have a duty to voters to paint a clear picture of the future they are offering before the election, and that includes allowing the OBR to project the economic impact of each election manifesto. It would be very cynical to go into next May’s election without being honest with the public.