Winter of discontent

Across Britain tempers are running high over the government's decision to cut 81 billion of public spending over the next four years.

in London

IT has become somewhat of a cliche to describe the slightest hint of public restlessness as a prelude to a new season of discontent. But this time the mood is far too ugly to ignore warnings of a long and harsh winter of discontent not just in Britain but across Europe as people take to the streets to protest against what they regard as an assault on the post-War welfare state in the name of economic reforms to deal with the effects of the recession.

Many European countries, notably France, Spain, Italy and Greece, have already been hit hard by a wave of strikes (in France there is talk of the spirit of 1960s in the air) and the unrest is spreading rapidly. In Britain, the fuse has been lit by the government's decision to cut 81 billion of public spending over the next four years to tide over the unprecedented debt crisis caused by the recession.

October 20, 2010 the day Tory Chancellor George Osborne announced the cuts has been dubbed Black Wednesday amid accusations that the Tory-Liberal Democrats coalition is gambling with people's lives and the national economy. According to the government's own estimates, nearly half a million public sector jobs will go as a result of the planned cut. Its claim that the slack will be picked up by the creation of new jobs in the private sector is disputed by experts who argue that given the private sector's dependence on government contracts it is unrealistic to assume that it will continue to expand after such deep cuts in public spending. One commentator likened the assumption to a leap of faith based on nothing more than a wing and a prayer. Indeed, there are fears that the private sector itself could end up losing up to 150,000 jobs.

The most controversial is the raid on welfare benefits in what, critics say, is the Tories' ideologically driven campaign to demolish Britain's post-War welfare state. Some 7 billion worth of welfare handouts ranging from child credits to housing and disability benefits are to go or to be restricted under plans that have been compared with the notorious Thatcherite cuts of the 1980s. This 7 billion is in addition to the 11 billion welfare reductions announced in the summer.

In another move that has inflamed public opinion, particularly an already squeezed middle class, the original time line for increase in pension age from 65 to 66 will be brought forward as part of the austerity package, unveiled by Osborne amid opposition jeers in the Commons. Ironically, the Liberal Democrats, who fought the general election on an anti-cuts platform, cheered the Chancellor, inviting accusations of selling out to the Tories for the sake of power.

Barring health and international development, there is no area that has been spared cuts. A whopping 8 per cent cut in defence spending has sparked a debate on its impact on Britain's status as a global power. There is concern that in future Britain will not be able to go to war alone and will have to rely heavily on joint operations with its European allies and the United States. The country's soft power is also threatened because of proposed cuts to university funding and various cultural bodies, including the British Council. There is anger in the BBC after it was forced to accept a six-year freeze in licence fee, besides being burdened with the cost of running the World Service, currently funded by the Foreign Office.

So, what will be the overall impact of the cuts? Contrary to Osborne's claim that those with the broadest shoulders should bear the greatest burden and that the highest earners would be the worst affected, independent economists say that it is the poorest who will be hit the hardest.

According to the Institute for Fiscal Studies, Britain's leading economic think tank that the Tories used to quote with relish when they were in the opposition, except for the richest 2 per cent it is the working families and the sick and the poor who will bear most of the pain.

You're really picking on the weakest people in society and it's completely unfair how you're applying these budget cuts, one disabled angry voter told Prime Minister David Cameron and his Liberal Democrat deputy Nick Clegg at a public meeting.

Here's how The Observer's political writer Andrew Rawnsley sees the future:

Assuming they [the government] can actually implement this squeeze, or something approaching it, the retrenchment will be deep. The country will count the cost in myriad ways: rising train fares, higher tuition fees, reduced welfare payments, hiked council charges for diminished council services, cancelled school and hospital building projects, child benefit frozen for all and cut for some, higher VAT the list is so long that it could fill up the rest of this column. Millions of voters face a long period when their living standards will be frozen or squeezed and, in some cases, hit very hard indeed.''

No wonder, across Britain, tempers are running high and, as public anger mounts, the government is bracing itself for a stormy period ahead.

Several Ministers have told me privately they're braced for eggs and other flying objects from voters angry at the cuts, one political correspondent wrote.

When the Cabinet Office Minister Francis Maude, a media-savvy Tory grandee, appeared on the BBC to explain the cuts to a group of voters, he looked like a nervous schoolboy hauled up before a particularly ill-tempered headmaster. And, sure enough, soon he got a taste of public anger. Livid at the prospect of losing jobs and benefits, the audience laid into him and portrayed the Tories as a leopard that would never change its spots, a reference to the Thatcherite cuts that left scars on a whole generation of Britons.

There are many ways to skin a cat....You could have dealt with the deficit in another way, a woman retorted when Maude claimed that the cuts were necessary to tide over the debt crisis. Another said it seemed the Tories were up to their old tricks again and what was happening appeared to be part of their unfinished business namely, to get rid of the welfare state from when they were last in power. Their Liberal Democrat coalition partners, who garnered votes promising to protect jobs and benefits, were accused of betrayal.

The rumblings had started even before the cuts were announced, with trade unions threatening coordinated action against threatened job losses. The Trades Union Congress (TUC), at its annual conference in Manchester in September, endorsed a motion calling for joint union industrial action, nationally and locally, in opposition to attacks on jobs, pensions, pay or public services. Denouncing the government's proposals (at that time they were only proposals) as a savage and opportunistic attack on public services, it said they went far further than even the dark days of Thatcher.

Senior trade union leaders lined up to attack the government and warned that it would make Britain a darker, brutish, more frightening place.

These are not temporary cuts, but a permanent rollback of public services and the welfare state. Not so much an economic necessity as a political project driven by an ideological clamour for a minimal state, said TUC general secretary Brendan Barber.

Bob Crow, leader of the powerful Rail, Maritime and Transport Workers' Union (RMT), called for a civil disobedience campaign if dialogue did not work.

Osborne defended the cuts arguing that tough action was needed to deal with the debt crisis that he blamed on the previous Labour government.

Today is the day when Britain steps back from the brink, when we confront the bills from a decade of debt. It is a hard road but it leads to a better future, he told MPs. This is a line that many even on government benches are reluctant to buy, let alone the Labour Party, which believes that the government is taking an irresponsible gamble by resorting to such swinging cuts when the economic recovery is still very fragile.

There is widespread sympathy for the Labour view not only on the liberal Left but even among pro-Tory businesses, which have warned that the government's plans risk plunging the economy into double dip recession.

Richard Lambert, director of the Confederation of British Industry (CBI), has said that Britain cannot cut its way to prosperity. Directly challenging the claim of Cameron and Osborne that the private sector will create new jobs to mop up the losses in the public sector, he asked: Everyone knows that we cannot cut our way to prosperity, so where are we going to offset the cuts in the public sector?

Several Nobel Prize-winning economists, including this year's winner Christopher Pissarides, have questioned the government's judgment, arguing that cutting so deeply and so fast in the current uncertain economic climate could make the situation worse. They also feel that the government has exaggerated the scale of the debt crisis to justify the cuts.

Unemployment is high and job vacancies [are] few. By taking the action that the Chancellor outlined in his [Commons] statement, this situation might well become worse, Professor Pissarides warned.

The Observer, in an editorial, described Osborne's plans as a giant experiment using Britain as the laboratory and some of its poorest citizens as guinea pigs.

How things pan out over the next few months would determine the future not only of the British economy but also of a generation of Britons, especially the more vulnerable sections.

If things go wrong and it is feared that they will the ruling coalition itself could unravel, but a French-style revolt is not on the cards. For rebellion is simply not part of the British genetic make-up. But then who knows? For, as Sunder Katwala of the Fabian Society put it, that might change as spending cuts move from abstract numbers to things we value.