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Morning Line: can the spending review be 'fair'?
Coalition politicians are clinging onto a misguided concept of fairness.
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The coalition government shows no signs of retrenching on its plans to cut spending, to be announced tomorrow. Should it come up with a cohesive plan then this will prove an impressive feat, coming just five months or so after the Conservatives and Liberal Democrats’ shotgun wedding.
While the coalition looks set to meet its self-imposed financial target of £83 billion of spending cuts, can such a tightly fought dicing of budgets be done fairly?
Certainly coalition politicians are clinging onto the concept of fairness. ‘It will be an investment package for future fairness,’ Lib Dem leader Nick Clegg recently said (reportedly drawing on the word ‘fairness’ 34 times in a 21-minute speech). Speaking at a school in Chesterfield, Derbyshire the deputy prime minister claimed that while the spending review will lead to cuts, it will also ‘increase our investments in fairness, and in particular in the promotion of social mobility and life chances’.
Like Clegg, prime minister David Cameron used the concept of fairness to justify his plans to cut higher rate taxpayers' child benefit. It means that families with two earners on just under £44,000 each – but collectively about £80,000 – will keep child benefit, while those with one earner on more than £44,000 would lose it.
Of course, on the basis of fairness, almost all of the spending cuts can be disputed. Is it fair that a decade after Equitable Life’s near-collapse, the compensation for its victims will be decided as part of Wednesday’s austerity review? The Liberal Democrats are certainly not being ‘fair’ to the people who voted for them, in particular with their reneging on their election pledge to abolish tuition fees.
There is a definite political incentive to be ‘fair’ – but it does not derive from a sense of moral duty. Rather, Prime Minister David Cameron knows that targeting people as evenly as possible will allow him to peddle a ‘we’re all in it together’ line.
In fact, research shows that the coalition’s aim of making the review fair to future generations is not even what most people really care about. ‘The majority across all of our age groups rejects the chancellor's proposition that debt must be cut for the sake of future generations; they prefer, instead, to see the economic prospects of their own generations to be protected,’ a from the International Longevity Centre (ILC) and poverty charity, Elizabeth Finn Care, concludes.
This suggests that most people don’t want fairness any more than the generals who want to protect their military fiefdoms or the business lobby groups who worry about their bottom lines. What they care about is the impact of the cuts on their own finances and jobs.
The response to a forum post on this website questioning the wisdom of protecting international aid reinforces this point. The almost unanimous response was that aid should not be protected; that domestic interests are more important than those of more impoverished countries.
When everyone faces cuts, self-interest is the only dish on the menu.
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8 comments so far. Why not have your say?
Graham Barlow
Oct 19, 2010 at 13:41
The hollow ring of the word "Fairness" echoes throughout the land whilst the expenses fiddle investigations continue on for ever. The huge dividend payments from companies set up in Tax Havens like the Cayman Islands, paid out of untaxed profits to the benefit of Ministers who are yelling "We are all in this together". The appointment of Govt advisers who are arch practitioners of the Art of International Tax Avoidance on a scale almost unknown in any other part of the world.The land of the Arch Hypocrite is more an apposite description. The thrifty, honest and hardworking are being taken for MUGS whilst those very ministers stand to inherit millions from family Trusts completely untaxed. If it is good enough for them ,let us all have a trust for our children which is Tax free. I dont klnow how much of this I can stomach before I go over the top.
report thisPat
Oct 19, 2010 at 16:36
An industry is out there, to advise and manage tax avoidance. Nothing new!
I have been reading for tens of years its advantages. Regretably, my parents are not clever enough to create sufficient wealth.
Life is not fair. 'Fairness' is relative, not absolute - different sets of value shift and mix which ends with multipliers of multipliers. Can 'fairness' be ever stand up to scrutiny.
But I'll do my best for my children, legal system permitting. Me and my children 'are all in this together'. Forgive us, whoever!
report thisGraham Barlow
Oct 19, 2010 at 17:30
Now I know it is relative I will make sure they get as little as possible out of me.All the assets in Britain can be transferred to a Trustee account in the Cayman Islands. Have the lowest salary possible and qualify for Tax Credits all other income by way of dividends ,not eligible for NI . The dividends paid out of untaxed profits. Get a job in the House of Commons as an MP and flip your properties to avoid Capital Gains Tax. What a first class industry that Britain bequeathed to its Bankrupt Colonies, I think we have reached the end of the Road when "Fairness" enters the Weasel word Dictionary of the Free loaders in Parliament.
report thisPat
Oct 19, 2010 at 22:35
Free loading can be a painful process, gold is a better bet at present.
report thisGeoff Evans
Oct 20, 2010 at 11:49
Does "FAIR" mean taking from the hard working and genuinely prudent people of Britain and giving to the workshy and Eastern Europeans.Tell me different if you can!
report thisGraham Barlow
Oct 20, 2010 at 12:22
I know I am old fashioned and my Dictionary is old, but "Fairness" as a noun represents words like Equity, Justice a balanced sharing of the spoils or share of the pain. . Judges use Equity in their judgements, which represents Fairness in Contract Law, we hope. In dispensing Fairness it would help considerably if the Politicians were leading by example,not hiding behind your definition of relative and not absolute. Mr Churchill had nothing to offer but Blood ,Toil, Tears and Sweat, everybody overloked , or even admired him as he lit up yet another Havana,because he set an example of selfless sacrifice for the common good. Words are not enough ,it must be accompanied with other personal sacrifices from the politicians to have any real meaning. Why do you think Bill Gates is admired so much. He wont go short but he surely knows how to set an example.
report thisAnonymous 1 needed this 'off the record'
Oct 20, 2010 at 14:52
This country has been bequethed 2 legacies by new Labour.
1. Benefit dependency
2. Massive Beauracracy.
Two simple and fair answers;
A simple and fair way to approach benefit cuts would be to simply say that ALL benefits with the exception of OAP pensions should be cut with immediate effect by 5% followed by the same next year and so on until they have all been cut by 25% over 5 years. People will have time to adjust.
The savings should be channelled into slowing raising the nil tax and NI threshold up to at least £15k per year so genuinely helping those in work on low wages, it would also ensure that most pensioners small private pensions and savings would pay no tax thus rewarding the thrifty.
As for the beauracracy;
ALL Whitehall depts should be immediately placed on a 4 day week. All local council depts placed on a 4 day week.
Savings probably around £30 billion a year without losing one front line nurse, teacher, real copper, doctor, fireman, ambulance crew etc.
All race, equality, diversity, gender, sexuality, five-a-day, outreachers, advisers, bin inspectors, enviromentalists, etc should be sacked immediately. Savings? Probably around £15 Billion a year. Again without losing one frontline nurse, doctor, teacher etc
Hence over 50% of the £80 billion a year savings target is met without cutting Child benefit, without loading up students with thousands of pounds of debt, without cutting frontline defence etc etc
Throw in savings of say £20 billion if you REALLY cut quangoes and we are nearly there.
One problem, no political will power to do the simple fair things.
report thisRose G
Oct 21, 2010 at 09:24
It is disgraceful that many people who have had pay freezes for the last 2 years will have to pay 17% VAT on goods, will have to pay more to travel the same distances - some are quoting upto 10% more in rail fares!
Where on earth are they going to find that money.
Please can someone tell me why India or Pakistan should be handed out money from our taxes - is this a guilt thing - we raided & demolished their resources in the past, now we are paying them blood money, which they can use to fund terrorist activity (Pakistan)& more corrupt governments than our own? They both own nuclear weapons - is this what we are funding with international aid?
Why do we continue to give aid to populations whose leaders have Swiss bank accounts, while at the same time they continue to oppress their people?
Can we really console ourselves that we are aiding other countries when the numbers of land mines still active & killing & maiming local people.
All of the above is troubling to me - but when I factor in that this is being done by people with no morals or scruples, who pretend we are all in it together - yea, like Mugabe & his people - they certainly are all in it together - what a tragedy that we cannot do to these people what was done to the royals in France - off with their heads!
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