Tim Collins, Bell Pottinger: Negotiating in leaner times

Whatever political change lies ahead, the bigger challenge will be negotiating severe budget cuts.

We all seek to prepare our clients for the consequences of likely political change.

This year could see the first Tory government since 1997 and the first Conservative gain of power in 31 years - or the first hung parliament since 1974.

But what about the other, arguably bigger, change that is coming, irrespective of the outcome of the general election?

For the first time since the 1920s, overall levels of public spending will be cut to the bone. There is barely an adult alive who can remember the Geddes axe, as it was called.

Back then the government was spending much less in the first place, but even so there were severe consequences. The armed forces were crippled, making things worse when war came in 1939. Benefits and pensions were chopped back. Wages fell.

But that was against a broadly benevolent global economic background - the United States continued to boom until the Wall Street Crash of 1929. This time things could get even trickier.

Some may think they have lived through expenditure cuts before. Didn't Richard Beeching slash the railway network in the 1960s? Didn't Margaret Thatcher axe school milk in the early 1970s?

And weren't the streets filled with demonstrators protesting against cuts throughout the Tory 1980s?

Yes, but even so, in every year since the Second World War, overall public spending has been higher than the year before, even in the 1980s.

Assuming this coming election produces no workable majority and that it takes until 2011 for the Conservatives to gain enough power, that may be the year that signals a reversal in spending.

How should public affairs professionals respond? Lobbying in a time of plenty - sharing a growing cake - is easy. Carving up a rapidly shrinking one will be much more difficult. So clients need to be aware that politicians will be less than receptive to lobbying for higher budgets, and that they need to be assured that those seeing them 'get it' over the inevitability of cutbacks.

None of the main three parties is arguing to keep public spending at current levels, so it would be beyond daft for our clients to try to do so.

Leaner times require smarter minds.

Now is the time to make the case for preserving as much as possible of existing budgets, while laying the groundwork of trust and sympathy that may make more resources possible in later (we hope happier) times.

Relationships built up with high-spending ministers in high-growth eras will look tired, dated and irrelevant even if (almost inconceivably) Labour hangs on for a fourth term.

But if the Government changes, then a new politics of austerity will be even more dominant. The British Social Attitudes survey recently showed that for the first time in 20 years more people see themselves, in economic terms at least, as natural Conservatives than as instinctive backers of Labour.

The majority of people now believe that the public sector is bloated, overspending and unsustainable.

Poll after poll now shows majorities saying cutting the national debt should come from lower spending rather than higher taxes.

Public affairs practitioners need to be aware of this, and able to position their clients accordingly.

It is no use pretending that the 'let rip' era of public spending of the last decade will come around again. It won't, at least not for a long time.

Making the case to government, about almost anything, is about to get a whole lot harder. Public affairs needs to get a great deal nimbler to keep up.


- Who are your five fantasy dinner party guests from the political world?

Ronald Reagan for inspiration, Boris Johnson for entertainment, Peter Mandelson for provocation, George Osborne for business - and John Prescott to serve the soup.

- Predict one thing that will happen in the week running up to the election.

A poll giving the Tories a lead of under five per cent will spread panic in Conservative ranks - but then they will win comfortably.

- A hung parliament: good or bad news for public affairs?

Good for public affairs, because suddenly every MP seems to matter. Lousy for Britain, because big decisions would be deferred until after a further election.

Tim Collins is managing director of public affairs, Bell Pottinger

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