Britain’s Budget Fiasco

In Britain, the Conservative Party’s recent budget left a PR disaster in its wake. Kevin O’Leary examines the damage.[br]“These are the people that I am fighting for, real decent hard-working people, not numbers on a treasury spreadsheet but people whose lives would be impoverished, whose hopes and aspirations would be crushed if we had gone on spending more and more than the country earned.”Those are the words of British Chancellor George Osborne after the resignation of Iain Duncan Smith from his post as Secretary of State for Work and Pensions in the Westminster Cabinet. Duncan Smith left his post after the announcement of £4 billion worth of cuts to disability benefits, as part of the Conservative Party's plans to balance the UK budget by the end of the current government's lifetime in 2020.Slashing spending has been Tory policy ever since coming to power in 2010 (and their subsequent re-election in 2015), and eradicating what they perceive to be unnecessary expenditure has long played a central role in the party's economic philosophy. Tory economic ideology favours uninhibited private enterprise over significant government involvement in the national economy. As such, a move towards reducing the level of dependency citizens have on the government is seen as an integral part of Conservative fiscal policy.The Conservatives have long been viewed as a party for the wealthy that are out of touch with the less well-off in British society. This appears to be reflected in the party's budgetary decisions. There is a general consensus that Britain needs to reduce its national debt. What contrasts the Tories with Jeremy Corbyn's Labour or the Liberal Democrats, however, is that they aim to strengthen the government coffers through substantial cuts to welfare, while the other two aim to introduce higher rates of tax on the wealthy.This image of the party is only strengthened by the revelations contained in the recently published Panama Papers. Evidence from the papers exposed Prime Minister David Cameron's involvement in his family's offshore trust based in Panama, which has enabled them to avoid paying considerable amounts of tax in the UK.Though this perception of the party largely stems from the financial background of its more high-profile parliamentarians, there may also be a political arc to their actions. In last year's election, voter turnout among the retired was 78 per cent, compared with 43 per cent among 18-24 year olds. The proportion of those from working-class backgrounds that exercise their right to vote is considerably lower than those from middle-income or high-earning households.
“The proportion of those from working-class backgrounds that exercise their right to vote is considerably lower than those from middle-income or high-earning households.”
The party protects pensioners while cutting access to benefits for the poor who are yet to reach retirement age. In effect, the party powers ahead with austere budgetary measures that make little impact on its core vote. The severe cuts to Personal Independence Payments (PIPs) which comprised the bulk of the £4 billion of cuts in the recent budget would have mainly affected a section of voters who are less likely to vote Conservative than their more privileged counterparts.The departure of Duncan Smith has raised some eyebrows. Upon leaving office, he stated that the changes to benefits were “indefensible” and that this had prompted his resignation. This assertion has been disputed by Downing Street however, with the PM replying to Duncan Smith by saying he was “puzzled and disappointed” with his resignation, before remarking that the cuts had been “collectively agreed” by the Treasury, No. 10 and Duncan Smith before they were announced.One suggestion is that Duncan Smith's decision may have arisen from his support of a Brexit. This contrasts sharply with Cameron's position, and the referendum as a whole is a source of considerable friction in the party at the present moment.Though the cuts have been reversed due to the outrage they faced from the general public, a lot of damage has already been done to the government's popularity and the perception of senior government ministers. Chancellor Osborne has long been tipped as a successor to Cameron, but this is yet another budget PR disaster for him. This comes after similar fiascos with the 2012 budget as well as the reversal of cuts for tax credits. Inside the part, this has led to the strengthening of the 'Anything but Osborne' campaign.Osborne's claims that these disability cuts were necessary for reducing Britain's National Debt were rubbished by Duncan Smith – who claimed they were enacted simply for the purpose of saving money. The necessity of these cuts was also questioned as they were contained in the same budget that gave tax giveaways for businesses and higher earners.Could we see similar cuts to these in Ireland any time soon? In reality, it is highly unlikely. When the government eventually takes office here, the parties know that moves that appear to represent more austerity would amount to political poison for them. This has already been demonstrated by the reaction to the introduction of water charges. The prevailing sentiment from voters in February's election was one of rejection for austerity and so it is hard to envision the implementation of such measures in this state at the present time.A clear lesson can be learned from the British budget fallout for Irish parties: prior consultation with the relevant groups is essential for co-operation on such actions. The British Government is not proceeding with these cuts, yet the public fallout from the initial announcement couldn't be greater. Our next administration would do well to heed the warning presented by this sorry affair.