Michael Fry: Politicians wrong to dodge spending cuts issue

THE most interesting British electoral campaign for 20 years has so far failed, it would be fair to say, to come alive at the Scottish level. Is it a cause or a consequence that the political clashes here, such as they are, have been conducted in the yah-boo terms typical of Holyrood at its worst?

Holyrood does have its good days, on the other hand, and could have far better days if it were a more responsible parliament, if in particular it enjoyed real power to tax as well as to spend.

Meanwhile, we have to listen to the SNP's moans about the cuts being forced by Labour at Westminster, to Labour's moans about the way the SNP carries out the cuts Westminster is enforcing, to the Tories' moans about both sides and about the privatisation of water as well – Maggie Thatcher, where are you now?

It is never difficult, in the words of PG Wodehouse, to tell the difference between a Scotsman with a grievance and a ray of sunshine.

As for the LibDems, I cannot for the life of me say where they stand on anything, and Cleverclogs Clegg has done little to enlighten me. Yet it is not at all hard to uncover the arguments we ought to be having in Scotland, at this moment and every time we propose to visit the polling booths. It is just that the arguments are seldom aired by our democratically elected representatives. Others have to do it instead.

This week, for example, the Auditor General of Scotland, Robert Black, warned that the coming cuts will be of such severity as to make it impossible for areas of public spending to be ring-fenced, unless we want crippling damage to the areas not ring-fenced.

Hard on his heels, David Bell, professor of economics at the University of Stirling, also adviser to the Scottish Parliament, warned that cuts to its budget might in the end slash spending to a mere 80 per cent of the present rate, even allowing for cuts here being less severe than in England.

And at the end of the week, Andrew Goudie, chief economic adviser to the Government of Scotland, put a figure on the coming cumulative cuts: 35 billion – more than one year's entire Scottish budget. He added that it might be 2020 before we return in real terms to the spending level we see now.

In a mere seven days of Scottish political history, that amounts to impressive, unanimous testimony from a range of experts who know what they are talking about and have no partisan axes to grind – in fact are not allowed to have them. Yet for the effect they have exerted on the electoral scene, they might as well have stayed at home, digging their gardens. All the politicians continue to bewail the cuts and blame them on one another.

At its worst, this means that, during a time of justified public contempt for those politicians, the best our home-grown lot can do is ape a bad habit of the corrupt and discredited crew at Westminster. At Holyrood, they may not prostitute themselves to the same extent, but they still will not tell us one big truth about our predicament. They have a year, though, before they ask us again for our votes. How might they redeem themselves meanwhile?

In the politicians' own estimation, it would doubtless be by continuing to decry in public the cuts that they know in private to be unavoidable and that in their own minds, if they have any sense at all, they are already preparing to carry out. Let me suggest some alternatives that in the short run will be less popular or populist, but in the long run could allow us to master our woeful situation.

The first modest proposal is that we should all, on every hand, admit that cuts are coming and must come. Let us at the same time start to think how we can best spend the reduced amount of money we will have at our disposal.

At the most general level, let us then take a look at the size of the Scottish public sector. It has grown and grown till it accounts for about 60 per cent, on any measure, of the economy as a whole.

As a mere matter of verifiable historical fact, no economy has ever managed to improve its overall performance while carrying a public sector of that size. And it is the overall performance we need to improve before we can think about going back to spending money or even sustaining the present level of expenditure; nothing can be achieved by just shuffling it around.

Where can cuts fall without causing intolerable hardship? Perhaps that is not as difficult a question as you think.

I can see why poor people get free medical prescriptions, but I cannot see why rich people get them. I can see why poor people get free passes for the bus, but I cannot see why rich people get them. I can see why poor people get free eye tests, but I cannot see why rich people get them. I can see why poor people get free personal care when old, but I cannot see why rich people get it. Need I go on? Universal benefits are a waste. In an era of the utmost stringency, benefits must be targeted.

Even so, mere paring of particular services is not enough for the necessary cuts. To get public spending down to 80 per cent of its present level, one or more whole categories of it need to be transferred to the private sector.

Fantasy? But that is precisely what will soon happen to Scottish water, because there is no special reason for it to be owned by a public corporation and because the Government of Scotland will get money out of privatising it.

Why stop there? The public sector owns many assets: houses, roads, universities. Privatise them all, and the market will do what politicians cannot bring themselves to do.

If these modest proposals seem outrageous, totally unacceptable, then somebody please tell me by what different means the – to repeat – unavoidable cuts of up to 20 per cent are going to be made. There is no way out of this, not in devolution, not in independence.

From Ireland to Latvia, small countries are steeling themselves to make the cuts that will restore their economic health and their lost prosperity. In fact, an independent Scotland would probably find itself cutting faster and farther than a devolved one. Nobody should regret this.