Nick Clegg this week became the first political leader to call for ‘progressive austerity’, picking up a key theme in Demos’ work. It got a mixed response. Peter Riddell in the Times said it was the most memorable thing he said in his closing keynote. But Simon Carr in The Independent was sceptical about its voter appeal: “that'll get them out to the polls in Sheffield. "Vote Lib Dem, vote for progressive austerity!". Ben Brogan in the Telegraph said it positioned him on the left, which was the wrong place to be.
Clegg’s got the right instincts on this. All the parties now agree in public that there will have to be cuts in spending, and in private that taxes will have to rise (actually the Lib Dems are honest about this too). I’ve written a bit about this in Public Finance. There is a now a consensus that austerity is coming. The prefix ‘progressive’ is often used in vain – but here it has some bite. It means that where cuts are made, or taxes raised, the poor should be protected. It mean that areas of government spending that make for a fairer society should be protected: good examples are the budget for compulsory education; properly targeted Sure Start; investments in green technology; New Deal programmes for the unemployed; and out-of-work benefits. But spending that flows directly into the hands of the well-off should be critically examined: child benefit and child tax credits for the affluent; subsidised higher education; some parts of spending on the arts and culture; winter fuel allowances for all pensioners. None of this is likely to be popular. But everyone knows the Treasury is in a big red hole. Everyone knows cuts are coming. The political question of the hour is indeed who can deliver progressive austerity. Whose cuts will be the kindest?