Cry God for George and Merry England but what’s so merry about our onrushing debt tsunami?
CAMPBELL MURDOCH takes a closer look at some post-budget posturings from the Whitehall Village and discusses a strange evasion; not so much missing an elephant in the room as ignoring the towering tsunami of debt already upon us…
George Osborne rose to deliver the last budget of this parliament. He left some questions unanswered. For example: Is George really the emergent saviour of Britain’s fear hobbled and chronically ailing economy? Is his record at the Treasury a signal that at last our desperately fragile finances are moving onto a more solid footing? Are our financiers, captains of industry, and bankers looking unusually confident and purposeful. Are we Brits drawing ourselves up to full height. I mean, to be blunt, are British factory managers recruiting workers again. Are the weary dole queues dwindling? Is Britain working?
If that is the case it must mean that it is George for a merry England (and, apologies to Alexander Salmond, for a happier Scotland too).
George seems to believe that he’s the man. After hoisting the famous red box, he proclaimed: “Today Britain is walking tall.” He confidently asserted of his Budget that it was “one big step on the road from austerity to prosperity”.
So is he right? Is George the man? Let’s do the maths.
Growth in 2015 is running at 2.5% (one of the highest rates in the EU). Jobs are being created and unemployment is now at 5.7% (down from 8% in 2010). And the all-important political measure of living standards is coming the Chancellor’s way, with general agreement that 2015 will see the country over take 2010 levels.
Looks great at first sight, but in the role of Britain’s white knight Mr. Osborne has enjoyed an unusual advantage — the absence of quality opposition. It is staggering how poor it is. Why are we not all up in arms? Why is the media not crawling all over this? I mean what exactly has Mr. Osborne managed to get us up from or out of or free from. What’s happened to the debt chasm, the red gap that keeps getting deeper the harder they dig?
A quick look at Osborne’s opposition: We know that Ed Miliband, the Labour leader, is not interested in the actual machinery of the economy. The planet from which he, his Marxist father, and his embittered sibling were beamed down from has no need for the complex checks and balances that keep free citizens from seizing too much of their “fair share” to the disadvantage of their fellows; that science which we know as economics. Milibandland is Marxist and citizens do not own a silver tosser there. The State operatives, like the Milibands, own everything and are supposed to dole out the clothing, food rations, and warm dry places to go when its night, it’s cold, or it’s raining. Of course these apparatchiks claim that they only control everything on behalf of the people and so they call these deprived people The State. This makes little difference to the state of the people.
The only use the national economy has for people like Red Ed, especially when they have to exist alongside genuinely free people, is to channel as much of other people’s money as possible into taxation and then use it to pay themselves and then put what remains into funding their Left wing social engineering programmes. Such projects are often grandiose and become a sort of propaganda for the benefits of Socialism generally. Big, generous, public schemes tempt simple people to gasp and then to vote for Ed. State control also happens to be the sine qua non of Ed’s Party’s. That is State political ideology. Harsh experience proves that State interference enslaves us and make us poor, the way it enslaved Russians, and impoverished Mother Russia.
If Ed was politically literate, if he knew how things work in the real world away from the leafy St. John’s Wood suburbs, how could he chose another political illiterate like Ed Balls to interfere with the grown ups business in the Treasury. How could a nincompoop handle such a ponderous and exacting, scientifically challenging brief? Put bluntly, an incompetent was given free rein to prove publicly the incompetence of his boss. Mr. Balls may be a delightful chap who genuinely loves people. But that’s not the basis of professional competence; neither is pie in the sky posturing, nor sordid political manipulation; promising the moon and delivering moonshine.
Mr. Balls was interviewed on the Today programme on Thursday morning. The interview was trailed as Labour’s response to the budget. Balls ignored such basics as balancing the books of the nations, attracting investment, making profits from improved production to grow more production, or addressing the mind-blowing debt which is sucking Europe, never mind the U.K. into a bottomless pit. Nor did he address any of the available theories as to how best to prevent taxation from paralysing British initiative and creativity. Both of these virtues are our only basis for hope in the future or the future our children must endure.
Balls brute tactic was to keep banging on about austerity as if fitness were torture or punishment. His rhetoric was fixated in the frame of class division and material envy of others. Mr. Ball’s idea of economics was parading banners before the mob. His flat plane message was, “The rich are having a whale of a time as the workers are being crushed”. When he edged towards something as substantial as problems of standards of living he claimed these had to be falling.
His problem is three fold. Firstly, he was (and is) one of the principal architects of the recent economic meltdown. He managed to increase public debt as a percentage of GDP from just under 40% to a whopping 62%. Secondly, no one believes standards are falling now or in any of his statements of gloom (not even the presenters on the Today programme!). So George Osborne continues to wrong foot him politically and that’s not necessarily good for us all either. But, finally, just about all available up to date economic data proves Mr. Balls is simply dead wrong in one after another of his own pet theories and prognostications.
Let’s now turn briefly to the UK’s slickest fringe party – the Scots Nats. They were allowed to run a referendum to break up our nation. They were given every possible advantage by the Government in this reckless adventure. Our purpose here is economic, so I contain my remarks to that area. Scotland has higher public sector employment than Eastern Europe managed in the darkest Communist era. There is a £1bn gap between taxes raised in Scotland and public sector spending. But we were told in the White Paper, published by the SNP Scottish Government, that North Sea oil would contribute £8bn to Scotland’s revenues in 2016. The First Minister, Nicola Sturgeon, is now preaching “an end to austerity”. It is interesting to note that the OBR (Office of Budget Responsibility) is forecasting North Sea oil revenue next year at £600m. When does political exaggeration become the deliberate misleading of a people? When do the people punish such monstrous mis-representation at the ballot box? Believe me they will.
I could go on. The Liberal Democrats stating that the coalition has done the job, while mis-using parliamentary procedure to present an ‘alternative budget’ with the only object of scraping up a few more votes to shore up their hapless political position.
So of that lot, George is the very best we’ve got. Things could be so very much worse. But has George brought us safely onto solid ground?
Reading recent budget reaction, two themes clearly emerge. First, people don’t really like the Chancellor. Too little attention is being paid to what he has done in office. But then, so much of our current political debate is devoid of any real substance. Subject knowledge, moral context and intelligent reason have all give way to our celebrity culture where looks and popularity are all that counts. Second, as a nation we have ended up believing that the government is the only legitimate agency to deal with our problems. Passively and through sloth we have slipped into the atmosphere of planet Miliband.
We are sleep walking into Rousseau’s nightmare world where ‘freedom’ is talked, but where the actions of government are disturbingly totalitarian, although always in democratic garb. In essence there is no longer a public perception of any society, vehicle of morality or fundament of law (and sense of personal responsibility for its implementation) which precedes the State and which, in effect, forms the State. No ‘natural law’.
We need to re-evaluate who we are as people in relation to the State. If we are assumed into State control we cannot be free, by any definition. Surely society (or community) precedes the State and all political institutions. We who are governed should hold the authority, which we lend or entrust to the government. The State has real authority, but it is bound to serve the pre-existing society and to respect it. The State itself must obeys the law and to do so it must preserve the moral and cultural foundations of all law. In other words, the State is one expression of society, but not the only one.
The point is that the people have conceded so much un-checked power to the government that we now find ourselves trying to deal with a number of very serious issues. We have given this power away at the expense of our families, guides, cities, the Church and many other political and cultural entities. The State is duty bound to preserve and promote these if we are serious about living in a strong democracy. One of the casualties has been our actual economy.
The basic problem is that the total public sector spending forecast for 2015/16 is £743bn, of which £232bn is welfare. This is the largest area of government spending (double that of health which comes in second). Thanks to Mr. Balls and his colleagues, we managed to get one in five British adults onto some kind of benefit payment. Our spending is far too high.
The public sector receipts forecast for 2015/16 is only £667bn, of which £75bn is borrowing. So we are collecting £151bn less each year than we are spending. The UK’s public sector net debt is currently £1.5 trillion, and if you add to that all government liabilities (including public sector pension provision) the figure rises to £4.8 trillion.
The coalition has presided over the public debt as a percentage of GDP rising to 80%. This is a completely unsustainably position. We are suffering from big government, little accountability and inevitable disastrous public policy. Greece might be the first Western country to discover that you cannot keep running up debts to pay for a lifestyle you do not earn. She will not be the last. The laws of mathematics are universal. For all the talk of austerity in Britain, the coalition government is not struggling to pay off its debts. It is not even close to being able to start paying anything back. It is still struggling, without much success, to slow down the rate at which Britain’s borrowings keep on increasing.
George Osborne is the best we have. His medium term forecast shows a modest debt reduction, which might indicate that he is trying to move in the right direction. We haven’t started on austerity yet and prosperity is a pipe dream on current data. But there is hope! The West’s big government model has failed. We will be forced, ultimately by the market, to rediscover how to thrive with less government. Either that or chaos.
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