Phoney War

There does seem to be a lot of airtime being devoted to the C-word right now, whoever the broadcaster. That’s C as in cuts. We have the Coalition arguing for them, Labour arguing for less of them (or a less speedy implementation), and now the TUC are looking to mobilise opposition to them.

But, although cuts have been discussed ad infinitum – and, the impression is increasingly given, ad nauseam – there has not yet been sufficient cutting going on to give us an idea of what life will be like afterwards. So, into this vacuum, the pundits, politicians and occasionally real people pour their speculation.

Yes, we can be certain that significant cuts in the budgets of central and local Government departments will mean that they will employ less people. This in turn will knock on to suppliers, contractors, and that part of the service sector which depends on those workers spending and re-spending money. Unless jobs are created in at least equal numbers to those lost, unemployment will rise.

Moreover, given that those in work are likely to be given below inflation pay rises, or be subject to pay freezes (or even pay cuts), then there is likely to be a fall in their standard of living. All of this is likely to be reflected in a fall in support for the incumbent Government. But this sequence of events has not yet worked through.

So we are, for a few months at least, in a kind of limbo, a phoney war perhaps. Hence support for the Coalition has not been seriously eroded, and there has not been significant pressure on the alliance of Tories and Lib Dems. All is likely to change later this month: the precise nature of cuts will become known, job losses will be identified, and with that, any honeymoon period will come to a close.

If new jobs are not created, and the cuts continue, the situation will deteriorate, and then the new and improved two-headed donkey will be stress tested in earnest. It could be 1981 all over again, but this time round, there is little likelihood of a tinpot South American dictatorship riding to the rescue.

Christmas 2010, for many, could be a time for drowning sorrows, rather than celebration. And there will, more than ever, be a need for opposition to show some unity, and some leadership.