Liam Fox is the PPC for North Somerset and a former Defence Secretary.
Almost any post-war Prime Minister would have given their right arm to be going into a general election with the record that David Cameron is able to present to the electorate – low interest and mortgage rates, low inflation, rising real living standards, record job creation, rapidly falling unemployment, a shrinking fiscal deficit, rising consumer confidence and the overwhelming support of the business world. The Conservative should be well ahead in the polls. Yet the margins remain tight. Why?
Let’s begin with the political terms of trade. Politics is about perception as much as policy, so terminology matters. Most people think of austerity as meaning strict or severe behaviour. It has dark and largely negative connotations.
Yet the trajectory of deficit reduction, under the Coalition, designed to gain the necessary democratic consent, is not by any stretch of the imagination a dark, Dickensian form of austerity. The Government is still spending over £70 billion more per year than it earns. As our plans for deficit reduction and elimination go forward, we should call our approach what it really is: living within our means.
Not only does this have a more virtuous ring to it, but it helps to expose the essential dishonesty of the Left’s alternative. When they talk about being anti-austerity, they clearly signalling their intention to continue to live beyond our means, spending more than we earn and sticking the debt onto the next generation. They are able to do this because there is still a big enough section of the electorate conditioned by 13 years of socialist economic nonsense. They want to enter the workplace later (more higher education), leave it earlier (early retirement) and live longer.
Simultaneously, they believe that the Government should spend more, but tax them less. This inevitably takes them down the path to greater borrowing – and here’s the rub. Government borrowing sounds like a painless solution to too many voters. Just as the Prime Minister is right to say that there is no such thing as government money, only taxpayers’ money, so we must continually emphasise that there is no such thing as government debt, only taxpayer debt (or, as I like to call it, deferred taxation).
The insanity of the economic approach that came to epitomise Gordon Brown needs to be totally dispelled. In the coming weeks, we Conservatives need to be brutal about the implications of this economic direction – and we need to do it in language that is clear and comprehensible.
We need to tell people that just as a family credit card runs up a debt that needs to be repaid in the end, the same is true for the government’s finances.By the same token, just as a family credit card, attracts interest every month, so does taxpayer debt. Not only are we, quite unethically, passing this debt to the next generation, but we are spending an amount on debt interest this year that is around half of the entire budget for the NHS. (I specifically put it in these terms because converting every economic statistic into a proportion of NHS spending is the favourite currency of conversion of the Left).
We need to take the challenge directly to the Left. How much more could we be doing and how much less tax could we be paying if we didn’t have the debt interest anchor tied around our necks. Every penny that they borrow means a penny less in the future for the NHS, or any other spending programme, or an inability to reduce the burden of taxation.
But there is another political dimension to this problem, apart from the purely economic one. What the Left are saying in their “anti-austerity” stance is that the next generation should be punished for the failure of the current generation to live within its means. By building up ever more debt, they are saying to younger voters: “you must pay for our (protected) benefits, our pensions and our debt. This makes it more likely that you will have to pay higher taxes and less likely that you will see these levels of benefits or pensions for yourselves”.
This potential breakdown of the intergenerational compact is one of the greatest risks the left are willing to run in the future so that they can get elected today. Anti-austerity is a con trick. It is the great dishonesty of this election. Miliband, Bennett and Sturgeon, are lying when they say that they can defy economic gravity and spend money they do not have without serious consequences, both now and in the future.
They may do this to different degrees (the SNP are the most irresponsible while Labour are the most disingenuous), but it amounts to the same thing. So far they have been getting away with the crime, not least because of the preposterous nature of the seven leaders; debates which precluded any meaningful interrogation. The Conservative majority government that the country needs will be determined, largely, by how successful we are in exposing this lie over the next four weeks.