Sunday, October 24, 2010

The Great Fairness Debate

The reaction to the Comprehensive Spending Review (CSR) has been nothing if not wholly predictable. Leftists popping up all over the shop to denounce the cuts as savage, regressive and unfair. But what does constitute fairness?

Matthew Parris writes on the subject in The Times yesterday (behind a pay wall). He makes the point that fairness is more than some arithmetic calculation of who loses most or whether the cuts are "progressive" or not...

"The essential point about the word “fair” is that it doesn’t add anything to words like “right”, “just”, “reasonable” or “ought”. “Fair” doesn’t (contrary to what the IFS assumes) imply a number, a quantity, a mathematical relationship between two different portions. It doesn’t (contrary to what the Labour Party thinks) imply equality: of outcome, opportunity, pain, gain, or anything else. When a speaker says “fair” he appeals to his hearer’s sense of what people do or don’t deserve.
Without this sense of deserving, any analysis of mere numbers is sterile. The raw, unprocessed arithmetic of financial gain or loss makes no impact on the moral imagination of the public unless illustrated by real cases of real groups about whom we may have an opinion — I stress: opinion — on each group’s moral claim on welfare. Accountants’ formulae for deeming cuts “progressive” or “regressive” are counterfeit, unless weighted by moral judgment.

A crude example: many people would think that, in a queue for an expensive lung operation, it would be “unfair” to put a penniless, jobless and incorrigible chain-smoker ahead of a hard-working young mother who had never smoked — although on the IFS calculation the decision would be “progressive” because it redistributes income from a richer citizen to a poorer one."

This is an important point and, as Parris suggests in his article, not one the coalition is making very effectively. The debate needs to move on from the "progressive" / "reactive" terms, that the left have managed to keep the focus on for decades, and start thinking about what truly is "fair".

The coalition has made a rod for its back by insisting on referring to its plans to reign in Labour's budget overspend as being "progressive". This term means, to most people, that the rich pay more (not just in absolute terms but proportionately) than the poor. Surely, that is fair?

Redistribution of wealth is not, in of itself, fair. Taking from the "haves" and giving to the "have nots" may have a Robin Hoodesque romantic appeal but it doesn't follow that it is fair in all circumstances. When choosing what to cut and what to spare the Chancellor had to made many individual decisions on what was fair and what wasn't.

This is where we see the fundamental difference between the Tory and Labour approach to fairness. Leftists think the main objective should be to redistribute wealth from the better off to the poor. Thus they hope to alleviate poverty and create a more equal society. This, they tell us, is "progressive". For them it would be enough to be able to prove statistically that they were taking more from the better off than the worse off. That's fairness in their book.

Osborne's starting point was more specific; that it wasn't fair to run up unsustainable debt levels for our children's generation to pay off at great expense. In truth Labour already had, but his point is still valid. We should not continue to grow that debt level by continuing to spend more than we can afford for years and years to come. Remember, all the government is proposing is to stop adding to the national debt, they're not planning on paying any of it back before the end of this Parliament at least.

From there the Chancellor had to make a number of fairness judgements. Inevitably these judgements are influenced by the values of the people making them (which, these being politicians who want to be reelected, in turn are influenced by the broad consensus in the country). Matthew Parris describes the kind of judgements he would make and they clearly tally with the Chancellors'...

"Here are mine; and I wouldn’t trouble you with them if I wasn’t convinced they are shared by tens of millions in our country.
I say it isn’t “fair”, if you’re only on an average wage, to have something approaching half your earnings confiscated through income, council, excise, fuel and spending taxes, and redistributed, even though it was your efforts that earned the money.

It isn’t “fair” that people housed by the State at your expense should be given homes for life, rather than only for so long as they cannot afford to pay market rates.

It isn’t “fair” — from the viewpoint of those who would expect their own grown-up children to rent a room if they lacked the funds to buy a house — that a person assessed as being in housing need, once he passes the age of 25, gets a right to a home of his own rather than just a place in shared accommodation.

It isn’t “fair” that the benefits system provides an incentive to jobless people with a medical condition to claim, and stay on, incapacity living allowance, even if they have a partner in work who can support them; and it isn’t “fair” that the costs and numbers of such claimants have swelled so enormously in recent years, without any evidence that the nation has become more ill or disabled.

It isn’t “fair” that workers in the public sector — whose jobs have been safer and whose salaries have risen faster than those in the private sector — should enjoy pension provisions so much more generous than what the rest of the country gets, paid for partly from the taxes of people in less secure jobs with inferior pension rights.

In every one of the five examples I’ve just cited, I’d bet that a shift in resources away from the recipients of state welfare would be seen by a majority in Britain as “fair”. But any fiscal calculation of the “progressive” versus “regressive” effect of the shift would conclude that the cut was “regressive”."

So, fairness is in the eyes of the beholder. To my eyes the CSR has got it about right. There will be a lot more controversy to come as the details pan out over time. Hopefully the coalition can get their fairness narrative sorted before long, otherwise they'll struggle to convince people to accept the pain being inflicted.

And when you hear those leftist politicians, celebrities and journalists berating the government for their actions it would be worth remembering the glee with which many of them welcomed the recession The First Post reminds us. Follow the link and have read if you time. They were happy to accept hard times for the poor, as long as it was framed in anti-consumption, environmentalist terms.

Further to the progressive/fairness debate, I see Guido has an excellent post on the same subject that is worth a read.


  1. Good post. Parris is absolutely right, so is Brendan O'Neill (First post). Unfortunately the media are, for some reason, doing the opposition's job: they are ignoring other analyses that counter the IFS claim. The Coalition is having serious trouble getting "the truth" out there. You expect it from the BBC or the Guardian but none of the main newspapers are predominantly supportive (DT, DM etc have all been headlining the downside (I wa sstunned by that wholy misleading that DT headline "Middle class families to lose 10,000 pounds each"...complete lie as it happens.

  2. @Span Ows: You're right about the media being more interested in stories of doom and gloom rather than reporting the facts which are somewhat boring in comparison. The truth is the cuts strategy is a judgement call. Osborne had to weigh the risk of damaging the "recovery" by cutting faster with damaging the countries credit worthiness, higher interest payments and worse economic decline later by not cutting fast enough. I think he got it right. Shame the media can't provide a more balanced view.

  3. ...or fair to have an ever larger proportion of your earnings taken to pay for a Rail Season Ticket (it's a faster service, really!), or pay wages, to millionaire members, of a cabinet....