David Cameron’s interview with the Telegraph this morning was interesting for lots of reasons. But the main one was his big hint of having to cope with austerity until 2020. Asked if there was likely to be a decade of cuts, the prime minister said:
This is a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can’t see any time soon when…the pressure will be off.
I don’t see a time when difficult spending choices are going to go away.
Bleak words, which echoed what Sir Jeremy Heywood, the cabinet secretary, said last month. He told an audience at the Institute for Government:
We are 25 per cent through fiscal adjustment. Spending cuts could last seven, eight, 10 years.
I asked a senior member of George Osborne’s team about this recently. When I asked if austerity could last until 2020, he simply shrugged and said “Sounds about right”.
It is clear that inside the Treasury and No 10, planning is now under way for how to maintain the support of British voters while implementing a programme of austerity that is likely to last six years longer than originally planned.
While the Tories have clearly decided that the best way to do so is to start warning people early, the Lib Dems appear to be less certain about this strategy. When we asked Danny Alexander about the possibility of a decade of cuts last week, he was much more cautious in his wording. In fact, he made the slightly odd claim that Sir Jeremy was actually talking about what would happen under a Labour government:
He might have been referring to what happens if those people who think we’re going too far, too fast, get their hands back on the reins of power. Clearly if you think that we’re cutting too much now then the logic of that is that you have to spend more time making deeper cuts in the end.
Pushed to confirm whether or not there could be ten years of cuts even under a Tory or Tory-led government, Alexander said:
There are going to be very difficult decisions that need to be made in the next parliament, the parliament after that, and the parliament after that.
The idea that you can think that once we’ve finished then people think we can go back to the old ways of doing of just sticking our heads in the sand about big decisions and waiting for the next crisis to build up before – it’s wrong… It’s very important to face up to these long-term pressures and I think that the sooner you get your head around those things, the less painful those decisions have to be.
At some point, coalition ministers will have to be more explicit about when the cuts are likely to end. At that point, Labour will hope to make maximum political capital out of it. Although the problem for Labour is that voters may well believe the Danny Alexander argument that no matter how long the Tories and Lib Dems cut for, it would have gone on longer under Labour.
Jim Pickard
Kiran Stacey