22/05/09

The public sector faces significant cuts. There is no avoiding it. The trick is to cut in a way that protects the poorest. I've written a piece for FT arguing for an era of progressive austerity. Keep the good bits of public spending, hack off the ineffective and/or pro-middle class bits, and seize the moment to make the tax system fairer (CGT on main homes would be a good start, and heavier inheritance tax). Child benefit, subsidized HE, arts funding: all should face the scythe.

This is going to be uncomfortable, especially for those on the centre-left. But unless we start making a case for cuts which is based on clearly progressive grounds, the agenda for fiscal tightening will be driven by those with a different agenda. We know we are entering a period of austerity. The question is whether it will be progressive austerity or not. Demos and the Resolution Foundation share an interest in this issue: watch this space.

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