ingly reticent” and vague on post-election cuts. The IFS gave none of the parties high marks, saying 82 per cent of the Conservatives’ plans were unspecified and 74 per cent of the Lib Dems’ have not yet been detailed. Now the markets want the details and some
specific ideas have emerged. The cuts will be in defence, schools, transport, the police and welfare services. Also, plans have been drawn up to means-test child benefits, cut payments for the disabled and reduce housing benefits. Capital Economics – a leading independent research consultancy – estimates 750,000 public-sector jobs will have to go. This kind of job carnage over a three-year period will not have been seen in Britain, and will come in the midde of an already high level of unem- ployment, currently running at 2.5 million out of work. Greek-style unrest from public- sector workers cannot be ruled out with the poor and vulnerable most exposed to such cuts. There will also be some tax rises but it is unclear what the ratio of spending cuts to tax rises will be. The Conservative manifesto sug- gested a 4:1 split and the Liberal Democrats proposed a 2.5:1 split. Most analysts predict that the Conservative ratio will prevail. The main tax rises planned are capital gains tax and VAT. An increase in capital gains tax from 18 per cent to 40 per cent is on the cards but this will only yield an extra £1.3bn (accord- ing to Capital Economics) or less than 1 per cent of the budget deficit. On VAT, most economists predict a rise
from 17.5 per cent to 20 per cent before the end of 2011. Analysts say a 20 per cent rate would raise about £11.5bn a year for the public coffers. VAT was temporarily cut to 15 per cent to aid the economy in the depths of the recession last year, and any rise will to lead to shoppers tightening their belts further. The new Government is expected to retain the recently increased top tax rate, which is at 50 per cent of income, end certain tax cred-
group to end it, while Labour’s Gordon Brown would also agree to a working party but give no firm pledge. At the assembly, Cameron went further than we expected. “It is not acceptable, not acceptable at all, and we will look at it closely,” he said, adding: “We will make sure Citizens are part of that process.” Then came the election’s inconclusive out- come, and the feverish negotiations that followed. The agreement that the Conservatives and the Lib Dems hammered out included one clear, unequivocal pledge by the new coalition Government: “We will end the detention of children for immigration purposes.”
Our other immigration “ask” – a one-off regularisation for long-resident undocu- mented migrants, as called for by our Strangers into Citizens campaign – is not part of the coalition agreement. The Lib Dems have been in favour of it since 2007, when we persuaded them following a mass rally in Trafalgar Square addressed by
and Wales produced a document on taxation where its main theme was to use tax proceeds for the common good. This is consistent with decades of papal teaching, as the 1961 encycli- cal Mater et Magistra notes when it says: “In a system of taxation based on justice and equity, it is fundamental that the burdens be proportioned to the capacity of the people contributing.” Ensuring the cuts falls proportionately on
its and child trust-fund payments for wealthier families, and cap public-sector pensions above certain levels. The most innovative development in deficit
reduction will be the creation of the Office for Budget Responsibility (OBR), designed to be an independent fiscal watchdog. Government still retains the ability to tax and spend but the OBR surveys the books. This should make it much clearer for the public and for outside experts to see what is actually happening as the fiscal position changes. It is a crucial and rather innovative move towards restoring some independent credi- bility for the Exchequer and gives the Government political cover. If the OBR demands spending cuts to reduce government debt then the Government will be “justified” in taking the tough decisions. How should the Churches respond to this situation? This could be a creative opportunity for them in an age of austerity. It needs to avoid “hand-wringing” responses that spend- ing cuts are bad as this would not be facing up to the economic reality of the situation. Last year the Catholic Church in England
Cardinal Cormac Murphy-O’Connor and Baroness (Shirley) Williams. But while the Mayor of London, Boris Johnson, is a key supporter – he was persuaded by a London Citizens assembly in 2008 – the Conservatives consider it politically too risky, and both Cameron and Brown gained mileage during the election campaign from attacking Clegg over it. It remains the only realistic and sen- sible policy. But its time is not yet. But that won’t stop us continuing to make the case for regularisation, and to remind Mr Cameron – at the annual meetings to which he has agreed – that the plight of 600,000 shadow people is not going away. In the meantime, we shall be advising the Immigration Minister, Damian Green, on how to set captive children free.
■Austen Ivereigh works for Citizens UK (
www.citizensuk.org). He is the author of
Faithful Citizens: a guide to Catholic social teaching and community organising
(Darton, Longman & Todd).
different segments of society who can bear them requires prudential judgement. In fact the English bishops in their pre-election doc- ument, “Choosing the Common Good”, presciently have already asked the right ques- tion: “How the public finances are rebalanced will probably be the most important influence on how economic inequalities evolve: will the costs of recovery be borne by those who gained least before the crisis, or by those in the strongest position to do so?” The front line of where the cuts will happen will be in public-sector institutions such as hospitals, schools and social services. As the Church has rightly called for ethical bankers and ethical decision-making following the banking crisis, we will now need ethical pub- lic-sector managers who will have to make many micro-decisions on how to implement these cuts by understanding priorities and tradeoffs.
If a school or hospital budget has to be cut how should this be done and who should bear the burden? A rapid course in virtue ethics would be useful in making such decisions. The English bishops called exactly for this in promoting virtuous action across all sectors of the economy; the context then was the banking industry but it will have to be applied now in the public sector. Ireland’s response to the crisis has been a
salutary case study. There has not been public unrest, unlike Greece, and one of the reasons for this, according to many commentators, has been the way the Government has been able to appeal collectively to the public to treat this as a case of getting over a communal hangover after a consumer debt binge. This has enabled Ireland to go through a period of austerity in a socially cohesive way. One of the major themes to promote social cohesion in the Conservative campaign was the “Big Society”, whereby charities, voluntary groups and a new generation of community organisers will help tackle some of the most stubborn social problems. This is also in tune with “Choosing the Common Good”. The Churches need to find a way to link in to this idea of the Government to nurture, mobilise and encourage the generosity, individual tal- ent, civic pride and sense of community when these painful cuts happen. This may mean church groups helping to find local, commu- nity-based solutions for problems in a period of austerity and thereby provide the frame- work for a more sensitive means of protecting and supporting the deprived and vulnerable.
■Ben Andradi works in the City in the private equity industry. He is also a lay trustee of the Catholic Trust of England and Wales. This article is a personal viewpoint.
22 May 2010 | THE TABLET | 5
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