2010/08/13

Radical Britain

Reforming the state

Radical Britain

Britain has embarked on a great gamble. Sooner or later, many other rich-world countries will have to take it too



OF ALL the politicians elected to high office in the West in the past few years, David Cameron seemed the least revolutionary. There was certainly none of the thrill of Barack Obama’s elevation. Even set against his peers in Europe, Mr Cameron seemed to offer less disruptive élan than Nicolas Sarkozy and a less intriguingly ruthless career than Angela Merkel. Here was a pragmatic toff, claiming the centre ground back from a Labour Party that had lost its vim. When Mr Cameron failed to win the election outright in May and had to share power with Nick Clegg’s Liberal Democrats, many feared a government as underwhelming as his election campaign.

Yet within its first 100 days the Con-Lib coalition has emerged as a radical force. For the first time since Margaret Thatcher handbagged the world in 1979, Britain looks like the West’s test-tube (see article). It is daring again—not always in a good way but in one that is likely to be instructive to more timid souls, not least Mr Obama and his Republican foes.

The most obvious audacity of hope lies in the budget, unveiled by George Osborne, the new chancellor of the exchequer, in June. To balance the books, he raised some taxes, notably VAT, but three-quarters of the savings will come from spending cuts. Most government departments will shrink by a quarter, though Mr Osborne excluded the National Health Service from his savagery. In the heated debate between Keynesian economists (who worry that a weak world economy needs more government spending) and fiscal hawks (who believe deficits must be tackled now to stave off Grecian disaster), Britain is the prime exhibit for tough love.
Meanwhile, the Con-Lib coalition is pushing ahead fast with plans to overhaul the British state: schools, the health service, the police and welfare all face dramatic change. A lot more government data are being made public. Unusually for the Tories, there is talk of increasing civil liberties and imprisoning fewer people; and in another sop to the Liberals, Britons next year will vote on a change to their voting system.



London calling to the faraway towns
Inside Westminster people like to point out that none of this is entirely novel. For instance, other countries—notably Canada and Sweden—have slashed budgets sharply, though they did so at a time when the rest of the world economy could pull them along; the school reforms are based on Blairite ideas (blocked by Gordon Brown). But there is a danger of missing the wood for the trees. The onrush of so many projects at one time is certainly daring: not since Mrs Thatcher has a British politician seemed in quite so much of a hurry to do a lot. And, again as with Thatcherism, there is a hint of a big idea.

For some time Mr Cameron, prompted by his closest domestic adviser, Steve Hilton, has talked about creating a Big Society, with more citizen volunteers taking on the state’s work. In office this vague idea has formalised into radical decentralisation: handing power to parents to run schools, to general practitioners to run the NHS, to local voters to pick police commissioners. In many cases, rather than just reduce the supply of the state, the Tories want to reduce the demand for it, changing a culture in which Britons have looked to government for services and answers they could provide themselves.

Why has Britain suddenly become audacious? Ideology has something to do with it. The Tories retain a Thatcherite edge—and one of the (few) beliefs they share with their new Liberal allies is a fear that the state has got too strong. Another factor is the country’s overcentralisation—arguably the greatest in the West. So much power has been grabbed by Whitehall that it is much easier than elsewhere to identify bureaucracy to hack at.

Meanwhile, the lack of checks and balances in Britain gives even a coalition prime minister near-dictatorial powers to get laws passed quickly—something Presidents Obama and Sarkozy must envy.

Yet the main prompt has been necessity. The Tories inherited such a massive budget deficit (11% of GDP) that there was little political upside in postponing the pain. Indeed, if there is a spiritual godfather of Britain’s punk politicians, it is that old Celtic headbanger, Gordon Brown. If he had not trashed the government’s finances before the recession, Mr Cameron, who back then was muttering about “sharing the proceeds of growth”, might have had a “muddling through” alternative.


There could be a row going on, down near Slough
As with all gambles, it could go wrong. The biggest danger is that fiscal tightening throttles the recovery: Mr Cameron may need a less hasty plan B. Similarly, many Tory bets, such as the elected police chiefs, could have done with a pilot project. There are possible rifts, even over the Big Society. Mr Osborne’s focus is slimming the state, Mr Hilton’s is decentralising it, which may need cash to lure in “social entrepreneurs” (see article) and local volunteers. And opposition will grow. Teachers and doctors (many of whom supported Mr Clegg) seldom welcome change. In swathes of Britain, including Scotland, the state accounts for the bulk of the economy.

Two of the Tories’ obstinacies look especially worrying. First, they should have used their disastrous inheritance as an excuse to break their promise to maintain NHS spending: even a 5% cut in that bloated department would have eased pressure elsewhere. And second, their redesign of the state is limited by their mistrust of local councils, often a more logical place to devolve political power to than unelected busybodies.

So a gamble it remains. But it is one that in general this newspaper supports. Throughout the rich world, government has simply got too big and Mr Cameron’s crew currently have the most promising approach to trimming it. Others—and not just the tottering likes of Greece and Spain—will surely follow. That includes America. At present, unlike in the 1980s, there is no Reaganesque echo from the other side of the Atlantic: despite the Tea Partiers’ zeal, the Republicans seem as clueless as Mr Obama in producing a credible medium-term plan to balance America’s budget. But pretty soon, as in Europe, somebody will have to come up with one—and Britain, for better or worse, is likely to be the place they will come to for ideas.

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