Stephen Crabb: Balancing the books is not an end in itself—its time the government learnt that

Instead, how about giving nurses a pay rise?

June 28, 2017
Stephen Crabb. Photo: Dominic Lipinski/PA Archive/PA Images
Stephen Crabb. Photo: Dominic Lipinski/PA Archive/PA Images

One of the key political debates over the past seven years has been not about particular policies, but language—specifically, the language used to define what happened with public expenditure over this period, and the impact it had on our economy and society.

Labour’s favourite word, "austerity"—conjuring up images of severe and uncaring hardship—has stuck. It is the short-hand expression, widely used in the press and by public sector bodies and charities, for a range of choices about taxation, spending and how we reduce a budget deficit that had reached an enormous 7 per cent of GDP in 2010.

While rejecting Labour’s premise, Conservatives have struggled to come up with neat language of our own to describe our approach. “Getting our country back to living within its means” was probably the most voter-friendly phrase we adopted. Nevertheless, by the time we reached the 2015 election, we could point to a powerful track record showing that our strategy was bearing fruit in terms of economic growth, with record employment levels and a steady fall in the deficit. This was fundamentally why the Conservatives secured an unexpected majority.

Given a choice to abandon this course, voters gave us the benefit of the doubt and stuck with the plan.

But the surge in support for Jeremy Corbyn at this election, and the loss of the government’s majority, has led some to argue that we are now in a period which demands a different strategy.

We should resist these siren calls and remember that the Labour Party was defeated again at this election. The country did not vote for a sudden reversal of direction, and Britain’s budget defecit is still too high. Our national debt currently stands at 84 per cent of GDP—dangerously close to the 90 per cent which economists Carmen Reinhart and Kenneth Rogoff warn could risk future economic growth.

"Time and time again the issue of nurses' pay was raised on the doorsteps, and during debates, in the election"
Yet the alarming drop in Conservative support among working age people at this election should give us sleepless nights. Far too many working adults, including professionals, were not willing to give us the benefit of the doubt this time. In the 25-34 age group, for example, Labour beat my party by 13 points.

These are people working hard to pay their bills, maybe saving for a mortgage, forging a career, and perhaps starting a family. That they should even consider entrusting those aspirations to Jeremy Corbyn is reason enough for Conservatives to re-calibrate the plan.

Balancing the books means little to younger voters as an end in itself. Analogies with household budgets do not work for a generation where consumer credit and borrowing are the norm. Instead, we must focus on hope and aspiration; in real terms, that means focussing on jobs, wages and mortgages. During the recent election we made barely any attempt to communicate that these parts of people’s lives were important.

Secondly, we need to recognise the importance that people of all ages place on good quality public services and demonstrate that we care every bit as much as they do. The fact that we embarked on an election campaign in the middle of a blazing row about schools funding suggested this was not at the top of our list of priorities. We’ve become so used to defending our deficit reduction plan, that we sometimes appear to have a tin ear when it comes to the concerns of employees and users of key public services.

One particular area where we need to show more sensitivity is around the impact of the pay cap on the NHS—specifically the nursing profession, where the number of vacant posts is increasing. I do not support a blanket reversal of pay restraint across the public sector, but there is a strong case to be made for lifting the cap on nurses, who shoulder an enormous burden in keeping the NHS functioning on a daily basis. According to the Royal College of Nursing, the pay cap has effectively cut nurses' pay by 14 per cent since 2010. It’s little surprise that time and time again the issue of nurses' pay was raised on the doorsteps, and during debates, in the election. The government needs to get off the back foot on this, and work up a plan to fund a pay increase for nurses.

In the absence of options for cutting expenditure elsewhere, we do need to accept there is a need to bring in more taxation revenue. All the low-hanging fruit has gone, and there is no parliamentary majority for further cuts, so a responsible Conservative approach demands that we keep an open mind to very careful tax rises to pay for things that voters really value.

Conservatives have not lost the argument on deficit reduction—but ignoring the legitimate concerns of voters will ensure that we do.