By Neil O'Brien
Have you ever played the game Pass the Bomb? You have to chuck the ticking timebomb on to the next person before it goes off in your hands.
Our politicians are doing something similar - competing for the right to try and tackle a catastrophic fiscal situation. The government is borrowing nearly one in every four pounds it spends, and the Governor of the Bank of England has said that whoever wins will have to take such tough decisions that they will be out of office for a generation.
Nonetheless, now that Gordon Brown has offered to resign, some people on the left are talking about a “rainbow coalition”, which would bring together Labour, the Liberal Democrats, the SNP, Plaid Cymru, and politicians from Northern Ireland.
Such a cobbled-together coalition would have a majority of two. Add on one green MP, and one Alliance MP, and it might be as high as six.
The new rainbow coalition would have to find a leader - which might be a bit tricky. But perhaps a more difficult challenge would be the need to pass an emergency budget within a few weeks. It would be very difficult for such a rickety coalition to vote through the package which is needed.
Each of the smaller parties would presumably bring their own additional demands. Plaid Cymru have already talked about their demand for 300 million pounds for Wales. The SNP want no cuts in Scotland. And so on.
Labour have put a number of cuts in the pipeline already, including real terms cuts in public sector wages, and cuts in eligibility for incapacity benefits and benefits for lone parents. But the left of the Labour party doesn’t really support even these changes. And far, far more is needed.
To get some idea of the challenge facing such a coalition, here are some options for plugging the gap for the next parliament (and further cuts would still be needed in the parliament after):
1) Freeze all benefits (including the state pension) for the next four years, means-test child benefit and child tax credit, scrap the winter fuel payment, scrap free TV licences, scrap the carers allowance, and cut incapacity benefit by £2 billion. Then raise the basic rate of tax by two pence in the pound.
2) Cut every government department’s budget - including the NHS, schools and police - by 11%
3) Increase the basic rate of tax by nine or ten pence in the pound, leaving people on low incomes paying more than 40 percent of their income in direct tax - even before they pay VAT on top. In other words, put the poor on what used to be the top rate of tax.
Do we really think that the 20 Labour MPs who are members of the Socialist Campaign Group will vote for any of these kind of cuts? Or will the Lib Dems, who promised to cut tax for the low paid, really now vote for a 10p tax hike on the poor?
Whoever forms the next government will need a big working majority. Trying to run a flimsy “rainbow coalition” in the middle of Britain’s worse post-war fiscal crisis would be like trying to cobble together a life raft out of a few twigs and some sticky tape - in the middle of a hurricane. It would be blown to bits. I just don’t think it’s even a plausible option.
