the csr and cumbria
At seven o’clock the morning after the spending review, I was on Radio Cumbria with Jamie Reid, the Labour MP from Copeland. Jamie was angry. He predicted disaster. When I said that coalition had committed, unlike Labour, to increasing NHS spending, he snapped, ‘That’s not true. I don’t know how you can sleep at night.’ I like Jamie and it was not simple to explain why we disagreed. I had found the arithmetic confusing. How were we going to have an 80 Billion pound cut with 25 per cent cuts in most departments? I knew that total spending would increase from 670 Billion to over 700 Billion in the next four years. I grasped that inflation and debt interest might create a real 6 per cent cut and I could see that half the budget was already committed (like pensions), or protected (like the NHS). But I still couldn’t understand how that meant 25 per cent cuts in most government departments. And if 6 per cent was only a 40 Billion cut, where did the 80 Billion come from? It took me two days before I worked out the shifts between 2010 and 2015 values.
I was still struggling with some of this when I sat on the floor between the chamber benches during the Chancellor’s speech. Beside me was Sir Peter Tapsell, who’d been in the chamber when Churchill last spoke. My friend Charlotte Leslie from Bristol was crammed on the step beneath me, so neither I nor she could shift our legs. The speaker fought to control the catcalls from Labour and the answering jeers from the government benches as though he was calming a gladiatorial contest, more than an economics seminar. I tried to work out whether the protection for science spending was in cash terms and what exactly the change had been on flood defences. But most of all I focused on broadband.
The cuts only made broadband more important. Every closure put services further from our villages. Every job loss put pressure on the private sector. Superfast broadband could dramatically improve rural services and businesses. Some amazing volunteers, working with my office, had reduced the estimated cost of installation from 43 million to 3 million by identifying unused public fibre, exploring different technologies (wi-fi hubs, aerial fibre and microwave links) and encouraging communities to connect the last miles themselves. I had lobbied each relevant minister and emphasised the connection to ‘Big Society’. We had convinced almost every major company to demonstrate their plan for Cumbria. We had held a conference in Penrith with everyone from the broadband Minister to Obama’s broadband regulator. But where were we going to find even 3 million? There weren’t the government funds to provide us with basic, let alone superfast, broadband. And we were in the midst of the most dramatic cuts since the Second World War. The Secretary of State himself had warned me not to get my hopes up. So when the Chancellor announced there would immediately be money for a superfast broadband project in Cumbria, I was unable to suppress a delighted yelp. It seems we have got about 10 million.
But broadband cannot assuage the anger about the spending review, from Jamie and many others. Cutting 25 per cent cut in government is difficult and painful, in part because of fixed civil service contracts and statutory obligations. If the private sector doesn’t take off, steeper cuts might bring lower growth and higher unemployment. How do cuts effect Penrith and the Border? Key local businesses have already lost NWDA funding. Organisations – like the Commission on Rural Communities – are closing and dedicated staff are being laid off. We are already Centres in Kirkby Stephen and Appleby. There will be worse news to come when departments complete spending reviews.
There is, however, reason to think Cumbria may suffer less. We had one per cent GDP growth during the recession. We can continue to exploit our Big Society vanguard status to win government projects. We are less vulnerable to single failures because of our thousands of micro-businesses. Farmers have been less affected by the spending cuts. Tourism – our largest sector – may even benefit from holidays at home. I was not a supporter of the new supermarkets, but they may bring tens of millions of pounds of investment and hundreds of jobs.
Cumbria, however, is not an island. Britain’s economy is very vulnerable to the situation in Europe and the United States. New broadband can protect and grow our economy. But it will only ever be a small part of our future. The Chancellor calculates that cuts will create a British government which we can afford, a debt which the markets will trust, and an economy which grows strongly in the medium term. He believes that doing less would be dangerous. But in any case, we will need all Cumbria’s improvisation, resilience, and luck before any of us – to borrow Jamie’s phrase – can really sleep soundly.