Gideon has spoken and the Coalition government has finally passed sentence on the public sector, outlining £81bn of spending cuts over four years. The Chancellor delivered his long-awaited (feared?) Comprehensive Spending Review to the Commons yesterday in a carefully crafted statement aimed at blunting Labour criticisms of the severity of the cuts. Announcing a 19% cut across departmental budgets, Osborne drew a contrast with Labour’s pre-election plans to halve the deficit which would still have involved reductions of 20% across the same areas. (The difference will be made up by an additional £7bn raid on the welfare budget, we are told.)
In many respects the statement was reminiscent of the Gordon Brown Budgets after 1997 – expectation lowered in the press in the lead-up to the announcement, final proposals that don’t seem too bad compared to what was feared, and a well-spun political presentation of the end result. Brown’s Budgets also had a knack of unravelling in the days after the announcement as those in the know started to probe the detail, but we’ll have to wait to see if Osborne’s statement goes the same way.
In spite of the spin, there will still be savage cuts. Police budgets will be cut by 16% over four years, councils will face cuts of nearly 30%, and the Home Office and the Ministry of Justice will see their budgets cut by 6% a year. And, regardless of Osborne’s wearying claim that “we’re all in this together”, it seems very clear that those most well off (including those – like Gideon – who live off £4m trust funds) will hardly see the same destructive effect on their lives as will surely be suffered by those at the other end of the income scale. Indeed, the Institute for Fiscal Studies is already highlighting the review’s harshest impact (surprise surprise) on the poorest in society.
Submerged in all the talk of spending cuts, the details of the Coalition’s shafting of the BBC also came to light this week, thereby completing the first part of the Conservative Party’s Faustian pact with Rupert Murdoch. As the Guardian outlines here the licence fee will be frozen for six years, which represents a real terms cut of 16%, and out of the reduced budget the BBC will have to divert money to the World Service (currently funded in part by the Foreign Office) and Welsh language broadcaster S4C. It’s perhaps quite telling that the BBC had privately feared far worse.
The second, and potentially even more alarming part of the Murdoch appeasement plan is still to come and relates to the media giant’s desire to assume complete control of BSkyB – a move which will be decided on by the Business Secretary (and erstwhile darling of, well, just about everybody) Vince Cable. As David Puttnam passionately argued in The Observer last month, the delicate balance of the British media and therefore the framing of debate in this country is under serious threat from this proposal.
These are pivotal moments for the future of the media in the UK. Commercial broadcasters have always complained about the dominance of the BBC, often with some justification, but the Murdoch approach is a rather different beast altogether. Not content with a simple wrecking ball approach to the Corporation (enthusiastically wielded by the Coalition) he also wishes to consolidate his grip on the British commercial media at a time when no one is really certain about how broadcasting or the press will evolve in an age when the internet continues to expand at an almost exponential rate.
As the FT’s Martin Wolf argues, Vince Cable has a golden opportunity to try to restore some semblance of ‘fairness’ to the Coalition’s already tarnished reputation. One can only hope that he puts a stop to the impression of the timidity of the Coalition (and indeed, every government since 1979) around the Murdoch empire. The government has showed its willingness to ‘fearlessly’ wield the axe on public services – an ounce of that determination should now be directed towards resisting Murdoch. The consequences of the cuts are not yet fully understood, but protecting the plurality of the British media surely has to be that rarest of bonuses for the Coalition: a relatively easy win.