Tuesday, November 30, 2010

The Democratic Abdication

The forecasts that were published for the British economy by the newly constituted Office of Budget Responsibility (OBR) yesterday were troubling for two reasons. The first is that the numbers show that the UK is a very long way from having a fiscal structure that can be sustained for the long term. The second, though, is more to do with the existence of the OBR itself.

The OBR was created because the Conservatives in opposition had lost trust in the official Treasury forecasts which seemed to pander to the political agenda of the then Labour government. What this represents is actually quite serious: what had been previously considered politically neutral is now considered politically compromised. As with the interest rate decisions, which have been transferred to the Bank of England, because the MLR decisions of the Treasury were deemed "too political", so budget forecasts have now fallen to an unelected Quango.

In part this transfer could be argued to be technocratic- as the complexity of modern finance has increased, so the ability of laymen to understand it has fallen. Thus, the need for technical experts to take these critical decisions. Yet it also reflects a failure of accountability. The fact is that the electorate have not understood what was going on either, and have not therefore punished those politicians who were deemed to have made decisions in their own short term political interest, as opposed to the longer term national interest.

Yet the electorate HAS smelled a rat: public trust in the political institutions of the UK has been falling steadily for years. Political parties- all of them- are now a pale shadow of their former size. Political engagement has diminished as politics falls to a narrow club of professional activists. After the petty venality revealed by the expenses scandal, public trust in Parliament is at an all time low. Even the announcement of the Royal Wedding has been greeted- outside the public school clique that dominates the media- with not much more than a shrug of indifference from the country at large.

There is a mood of total disenchantment with the entire apparatus of state in the United Kingdom.

The dead tree and cathode ray media may be largely to blame, with their shallow sensational and often sensationally inaccurate reporting. However the new media has not filled the gap either. People may be disenchanted by politics, but in a way they are in the same ignorant boat as the politicians themselves when confronted with the technical difficulties of economic and policy decision making. Few, outside the politically engaged even understand the way that the legal and constitutional framework shapes the policy debate. Frankly, after hearing Ed Miliband's first interview with Today on Radio 4, I am not even sure that the Leader of H.M.'s Official Opposition does either. Posturing Populists are not the best guardians of the delicate apparatus of the Constitution- they are too tempted to bend or break the rules for short term advantage.

So, it seems that Politicians can not be trusted- many would say that this was no surprise. The problems is that the failure of trust and the increasing lack of respect for politics is undermining our entire framework of political freedom. Without the bonds of social trust, then political accountability begins to disappear. When that happens, then the very root of our Democracy is undermined.

The most advanced countries on the Human Development Index, like Denmark, have a greater levels of social trust. Even Estonia, despite the appalling history of Soviet and Nazi occupation, has a greater trust in their government than the UK does. The Estonians regard the government as a limited service provider, and are therefore happy enough to use an ID card system, which they trust, in order for them to gain access to state provided services. The failure of trust in the competence as well as the good intentions of the British government condemns the country to using outdated and expensive information systems, which only undermine government efficiency- from taxes to health care- still further.

At the end of the day, the British political class, isolated from fundamental realities is continuing to lose the trust of the British people- and until confidence in the system can be restored- preferably by a dramatic increase in direct accountability enforced by constitutional reform- then the outlook for the UK continues to be increasingly poor.

The OBR is a symptom of a huge failure of British political accountability- and without greater understanding of the breakdown of the British social contract, the entire political edifice- including the increasingly clueless fourth estate, is headed for the rocks.

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