Addressing the UK’s budget deficit will impact on the Caribbean

The most probable outcome, it seems, will be a minority Conservative government running Britain in the national interest with some form of critical support from the Liberal Democrats as long as there is a commitment to a change in the voting system.

Britain’s May 6 general election accurately reflected the views of the opinion polls and the electorate more generally that there should be no single party with a clear majority. It also confirmed that Britain’s’ first past the post electoral system is broken and in desperate need of reform.

To understand the outcome it is necessary to know that the UK electorate has fallen out of love with its political class and that the Conservative and Labour parties can no longer rely on the pre-eminence of the two party system. This is because of widespread public outrage at the way in which Members of Parliament exploited their expenses; disillusion with the rise and rise of career politicians; and a narrowing in the philosophical approach between the main parties that makes one largely indistinguishable from another.

The consequence was an unusually large number of independently- minded and floating voters, and a thirst for a new kind of politics that resulted, to almost everyone’s surprise, in the emergence of Nick Clegg, the young leader of Britain’s third main political party, the Liberal Democrats.

Irrespective, Britain’s next government will have to address rapidly an unresolved budgetary crisis that will involve a cut in public expenditure of at least US$24 billion by 2014 if the UK is to begin to halve a US$42 billion deficit caused by the former Labour government’s profligacy and then by the borrowings required to survive the 2008-9 financial crisis. For its part the electorate is under no illusion that this means severe cuts in public expenditure and/or tax increases, but during the election campaign no party leader has been prepared to spell out the detail of what this meant in practice for fear of losing the popular vote.

Despite this, studies undertaken before the election by the Institute of Fiscal Studies, a respected think tank, make clear that savings on this scale would require a very large cut in public sector expenditure; freezing social security benefits; means testing aspects of the social service provision; abolishing a range of benefits given to the elderly; slashing military spending by around one third; and cutting spending on prisons, road and rail transport, schools, and teaching. Or, if as most politicians believe, cuts on this scale would mean political suicide, taking an equally damaging approach that balances cuts with increases in value added tax, income tax and corporate and other taxes.

All this may sound familiar in the Caribbean but in the UK’s case addressing a budget deficit on this scale will undoubtedly impact on the Caribbean as well. At a macro-level Britain has no option other than to change the way it positions and presents itself in the world and by extension, the way it relates over time to the anglophone Caribbean and the region more generally.

Britain has to have a defence review and it is likely, especially if the Conservatives win power, that there will be an accompanying foreign policy review. Both will be driven by cuts in spending. Already defence think tanks are questioning how Britain will deliver the defence responsibility for its overseas territories of which there are five in the Caribbean and which effectively lock the UK into the region; consideration is also likely to be given from 2011 on to cuts in British diplomatic representation in the Latin American and Caribbean region and to the UK’s trade promotional activities; and despite what has been said by the Labour and Conservative parties on ring-fencing support for development,  the Caribbean may well see almost all remaining bilateral programmes translated into UK funding for multilateral agencies managed out of Europe, North America or the region.

Before the election both shadow Conservative ministers and Labour ministers pointed out that no one in the region should be under any illusion. The Caribbean is a friend but is not central to the UK’s fundamental national interest. They are, they say, prepared to be supportive to a point, but the pressure of budgetary constraints may mean that within a year of the election whole areas of the world may not receive the same attention as was previously the case.

At a micro-level cuts to the UK public sector may well mean hardship for many in the diaspora. The Caribbean community in the UK are employed disproportionately in the public sector where some forecasts suggest that whichever party wins the election may have to cut as much as ten per cent of the workforce. Even if job losses can be limited to 0.1m in the public sector as Unison, the union that represents many in the diaspora forecasts, the effect on remittances and visits to friends and family may well be severe.

In terms of policy, the Conservative and Liberal Democrats have said that they will repeal Labour’s controversial and discriminatory Air Passenger Duty that places the Caribbean in a higher tax band than the US. Both parties have said that they will introduce a per plane tax aimed at encouraging a switch to fuller and cleaner planes based on the actual distance flown and possibly on the fuel efficiency of the aircraft used.

On migration the Conservatives suggest they would introduce an annual limit for non-EU economic migrants; establish more stringent immigration controls; and change the basis for students entering the UK to study. For their part the Liberal Democrats would introduce a regional points-based system with a view to ensuring that migrants are only able to work where they are needed; increase enforcement activity; and reintroduce exit checks at all ports and airports. Importantly for the many undocumented individuals in Britain from the Caribbean the Liberal Democrats would “allow law abiding families” to earn citizenship and “enable illegal migrants who entered the UK up to 2010, who have been in the UK for 10 years, [who] speak English and have a clean record, to earn citizenship.”

One of the more interesting aspects of the 2010 UK general election was the emergence of ‘Caribbean’ Conservative parliamentary candidates. Their presence as Tory candidates demonstrated how the Caribbean vote and Caribbean politics in the UK have diversified as successive post-Windrush generations have come to see Britain and their needs differently from those of their grandparents.

However, the two with the highest profiles, Wilfred Emmanuel-Jones, the ‘black farmer,’ standing in a rural seat in the west of England and Shaun Bailey standing in central London failed to get elected.

The election also saw Dawn Butler a former minister in the Labour government defeated by a Liberal Democrat, Sarah Teather, who has proved herself to be a friend of the region in her support for reforming Air Passenger Duty.

Previous columns can be found at www.caribbean-council.org

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