Most will be aware that Lib Dem controlled Cheltenham Borough council has sung to the government’s tune and signed off a cuts package totalling 3 million pounds over the next two years.  The council’s Cabinet Member for Finance, John Webster, revealed that there was much more to come:

“I am much more confident that we can address the cuts in future years having got through this one – but I have to warn people there will be more cuts next year, and the year after that, and the year after that as a result of the spending reductions imposed on us by the Government.  We will all be paying for the financial crisis for some years yet.  The period of austerity has just begun.  Things will get a lot worse before they get better.”

Dissatisfied with this level of acceptance of a government agenda transparently motivated by ideology and not necessity, I put it to John Webster that decisive Liberal Democrat support for the cuts at national level was fundamentally incompatible with his, and his party’s, claim to be a “progressive” force in British politics.  Here’s Webster’s response, along with the ensuing exchange…

Joe

One of the big problems you confront in politics is believing your own propaganda – I’m a little bit more experienced and knowledgeable about things than you are, and a bit more effective. I have no illusions about anything – you need to learn to acknowledge facts. There is a deficit. There are a number of ways to handle it and risks associated with each. But to pretend that you can magic a solution out of the ether because it suits your point of view is crazy.

 J 

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Playing the “older and wiser” card just doesn’t cut it I’m afraid, John.  Nor does your advancing of a blatant straw-man (that I’m denying the deficit).  If you have a coherent argument for smashing public services, then let’s hear it.

Joe 

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Seriously Joe you have to look at facts. The Labour Party (which I spent 22years in along with some of the people who are now denying history) is trying to re-invent history.

Brown maintained he had ended boom and bust. It was for this reason and the Iraq War, as well as local reasons, that I left the LP. They predicated spending levels on growth rates that were unsustainable. Much more to the point – niether were they desirable – you probably don’t even understand the reasoning behind this point. The reality is that all the party’s believe that growth is the only way to pay off debt – because under the conditions we have now you either do that or cut spending. In my view our present economic system is unsustainable, but the alternative won’t be what you want. It will mean accepting a much lower standard of living.

Brown had no option but to bail out the banks and that put us into the £150billion debt last year – with a net debt of about £50b. The figures are irrefutable.

The question is – how fast can you reduce this – and it is a balancing act. The risk is that if inroads aren’t made into it then you can run only to stand still and the cost of borrowing will go up as the bond market siezes up. These are the rules of finance capitalism. Basically, Labour has never sought to do anything else than manage capitalism – which is why they got rid of Clause 4.

It may be comforting to people who oppose the cuts to pretend that the problem doesn’t exist…but it does exist. My view is that there may be some room to slow down the rate of repayment but it won’t be significant in the total scheme of things.  This is the difference between what’s called the structural deficit and the economic cycle which people frequently confuse. Brown really felt he could rake off a tax take through unsustainable levels of growth to fund spending. He stoked the housing market up as a vehicle for economic growth and everything collapsed just as we warned him it would. He flew in the face of Keynes who argued that the aim of intervention was to level out economic fluctuations by investing and intervening over the life of the economic cycle. Brown – in his denunciation of ‘boom and bust’ – arrogantly maintained ‘he’ had put an end to the economic cycle. It only went on as long as it did becauise of the rise of China and the eastern economies, and the scale of American (and British) debt that fueled the growth in India and China.

Meanwhile people like me have to deal with the crisis at a local level – that’s the challenge.

Now, I really can’t be bothered to debate with you because I’m too busy so don’t reply.

J

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John

This is hopeless.  Even if one accepts your premises (that Labour overspent, that the bond markets now have to be appeased, and that economic growth is undesirable), your conclusion (that there have to be cuts) doesn’t follow since it’s only one side of the budgetary coin.  The other side is of course increasing taxes (on those rich enough to pay more), while reforming the tax regime to ensure that tax owed = tax collected.  And don’t kid yourself that your party’s got this covered, cos it ain’t even close.  And then there’s your premises: Labour overspent?  Hardly, as every chart at the ONS demonstrates.  They did, however, undercollect, at the same time as de-regulating finance, with disastrous effects for all of us.  The bond markets had to be appeased?  Very little evidence of substance for this.  What is true though is that the bond markets WILL get spooked if and when the economy double-dips and potentially declines or stagnates.  Economic growth unsustainable?  Bit nearer the mark with this one, but your argument’s deliberately crude so as to set up your pre-formulated conclusion that cuts are necessary.  More intelligent analysts are advocating a Green New Deal to transition our economy AND create jobs (thereby increasing tax revenues).  Anyway, you probably don’t understand the reasoning behind any of these points, so I’ll leave it here.  Thanks for revealing where you stand though.
 
Joe

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Joe – you live in la la land. If you want to change the rules of the market I’m with you – where’s your army?  You substitute politics with moralism.

End of discussion.

J