Home Political science A Century of Fiscal Squeeze Politics : 100 Years of Austerity, Politics, and Bureaucracy in Britain
When it comes to the 'blame politics' of fiscal squeeze, as discussed in Chapter One, Kent Weaver's (1986) classic account of limiting blame from loss imposition, mentioned in Chapter One, notes strategies that include delaying or diffusing losses, delegating decisions, finding scapegoats, and diffusing blame by sharing it out. We saw plenty of instances of all those strategies in the preceding chapters, and indeed delaying or diffusing losses might be said to be at the heart of the 'boiling frogs' approach to longer-drawn out fiscal squeezes.
But the 'heresthetic' approach (discussed in Chapter One) of finding new dividing lines, notably in welfare provision in drawing new lines between 'strivers and shirkers', but also stretching back at least to the Conservatives' unsuccessful attempt to make the 1923 election a contest over free trade or protectionism as well as over fiscal squeeze, represents a rather different approach to handling blame. And the strategy of delegating decisions only seems to have been partially applied in this case. Economic forecasting—a notoriously error-prone process, with high accompanying blame risks—was not 'outsourced' from the Treasury until surprisingly late in the period considered here. The setting of interest rates, another potential 'blame magnet', was outsourced to external bodies at both ends of our time period but not in the middle. And it is particularly notable that most of the fiscal squeezes were handled through 'normal' governmental decision procedures, and that emergency coalition governments set up specifically to carry out fiscal squeezes were very rare (1931 and perhaps 2010).
We have shown that the UK moved away from using expert commissions to propose spending cuts since the May Committee of 1931, which as we saw in Chapter Four was itself a modified version of the Geddes Committee of ten years earlier, as a special high-level committee outside the normal government decision-making machinery to propose measures for spending cuts and extra charges on a tight timetable, with those decisions subsequently being filtered by cabinet committees for political acceptability. That absence of such bodies in recent decades contrasts with practice in Australia, where 'audit commissions' have been given such a role by incoming right-of-centre governments since the late 1980s (mostly at state level, but also at Commonwealth government level in 1996 and 2014), or with even more dramatic cases in the eurozone, for example in Italy or Greece, where established party politicians made way for ostensibly non-political governments of 'technocrats' to handle fiscal squeezes.
On the face of it, that long absence seems odd, contrasting with the proliferation of quangos and delegated decision arrangements in many other policy areas, and moreover in a policy domain where pressures for blame-avoidance through delegation might be expected to be particularly high. It is perhaps not difficult to see why the post-World War II Labour Government chose not to repeat the strategy of its 1930s predecessor, which in any case had been acting under pressure from the other parties. After all, in the late 1940s Labour memories were still fresh about the way the 1931 May Committee had played into the political debacle of the collapse of the Ramsay MacDonald Labour Government. But the Attlee Government's Conservative successor also explicitly rejected the idea of a version of the Geddes or May Committee to find expenditure savings, though it set up the Guillebaud Committee on the National Health Service in 1953 in the hope—not realized in that case—that it would recommend ways of cutting NHS costs. And since then there have been numerous cases of governments using outside or technocrat committees to recommend ways of reining in spending in specific fields, for instance, over university fees in the 1990s and 2010s and over the cost of public-sector pensions in the review by ex-Labour minister Lord Hutton, commissioned by the Conservative-Liberal Democrat Government in 2010.
But it is not so obvious why the government-wide 'expert commission' approach to a public spending-wide review continued to be off the table for so long after direct memories of the fiscal politics of the 1920s and 1930s had faded, and it is notable that the Liberal Democrats' proposal for an all-party 'Council on Financial Stability' (in the Party's 2010 election manifesto) was not taken up in the coalition agreement when the Party went into government with the Conservatives in 2010.
Against that 'dog that didn't bark' (or stopped barking) in blame management politics, a development in the blame politics of fiscal squeeze that seems to have become more prominent in the later decades of our period is the phenomenon, noted in Chapters Nine and Ten, of so-called 'bear traps' set by incumbents ahead of elections. As we saw there, that term was used by some commentators to label a tactic used by outgoing governments to force challenger political parties to commit to continuing spending restraints or new taxes, or else to explain what other taxes they would impose to avoid such restraints. In effect, such political tactics are designed to have the effect of increasing the electoral risk to parties of not squeezing relative to that of squeezing, at least on the spending side.
To some extent such issues have always been raised in general election campaigns, but the tactic seems to have been sharpened since 1992, when Labour Shadow Chancellor John Smith's careful attempt to demonstrate the affordability of his party's proposals for higher public spending led the Party into the 'Labour's tax bombshell' trap described in Chapter Nine. The same tactic was duly repeated by the Conservatives in 1997 (this time resulting in an electoral pledge by the New Labour opposition to match the outgoing Conservative Government's announced plans for continuing spending restraint for the first two years of the subsequent Parliament). It was used by the Brown Labour Government in 2010, by introducing a new top income tax rate shortly before the election, and again by the Conservative-Liberal Democrat coalition in the run-up to the 2015 election, when it announced plans for a soft spending squeeze extending into the following Parliament, thereby drawing Labour into a debate over what new charges or taxes would be required to fund its plans for a somewhat more modest austerity programme in the mid- and late 2010s.
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