Must do far worse!

GEORGE OSBORNE has barely scratched the surface with his Autumn Statement. He has resolved, or so it seems, to tinker at the edges. Our deficit is not reducing while we are still borrowing, and it is set to continue. There is now talk of further tax hikes and cuts in spending. Our triple A credit rating is all set to be reduced to two in January; thus making it more expensive to borrow.

            We are over a trillion pounds in debt, and George believes that freezing benefit increases to 1 per cent will have any meaningful mathematical impact on that debt. He has to be prepared to be so unpopular with the British people that he has death threats posted to him by the sack full, as well as an array of rotten fruit thrown at him whenever he sets foot out of Downing Street. He has to be truly hated and vilified throughout the media and society: only then will we know that he is pursuing the right actions to drag this country back from the abyss – this was the Thatcher way.

            I am in my sixties and when I hear the word austerity I think of the 1930s, when my father was sent to dig and then fill in holes for no other purpose than to earn a food voucher: or was on other occasions told to bike several miles in order help erect telegraph poles. He had to supply his own bike and shovel, if he wished a higher rate of pay. When the work ended and the money ran out; he was told that he had to sell his bike before receiving a state handout.

            This was true austerity in practice; and if the chancellor does not do what he knows he has to do, this will also become the modern definition of austerity for the next generation who are the grandchildren of the present - all of whom will have been innocent parties in all of this mess.

So he must either show much more rigour in his attempt at deficit reduction, involving measures that will startle a society brought up on generous welfare dependency; or his words and whatever other actions he may take, will be disbelieved or prove inadequate to the markets and the credit rating agencies.

THE CHANCELLOR’S political master, the prime minister, has ring-fenced spending on the NHS, education, and oversees aid. This will no doubt, at some point, mean another raid on the MoD and our armed forces, already a national embarrassment because of previous cuts, but a useful source of income for politicians seeking salvation.

            First of all George Osborne must confront the prime minister and demand that oversees aid must be forfeited for the sake of the UK economy. It would mean £7 billion being ploughed back into the treasury each year. It was only ring-fenced in the first place by Cameron in an attempt to rid the Conservative Party of its image of being the ‘nasty party’.

            Well, whichever party takes their country’s predicament seriously, will have to become the nasty party among the populace if their intensions to cure the national debt are serious; or, like George Osborne at the moment, to be left seeking a workable compromise between being nasty and popular. This circle cannot be squared in the current or any other future economic climate where extreme measures are needed.

      There is another rich source of revenue like oversees aid, which is our contribution to the European Union budget. The annual net cost to Britain in 2011 was £10.8 billion[1]. But the direct and indirect actual cost according to the Democracy Movement website is much more. In 2008 (last time it was calculated) the European Union was costing us £65 billion a year. I very much doubt it has decreased since then.

      This country has to suffer a long period of pain before it can resolve its difficulties; tampering around with ‘solutions’ that do not reflect badly on the government or the chancellor within a government are a mere fancy for whatever party governs.

BEFORE LABOUR becomes too complacent about the difficulties faced by the Tory party, and the prospect of their own return to office; they should remember who played the primary role in this country’s bankruptcy in the first place. New Labour came to power in 1997 and ended its tenancy of Downing Street in 2010. The Labour Party had 13 years in power, during which period they did what they always do. They spent taxpayers money as if they had won a Euro-millions role over; for this is what the Labour party, throughout its history, has always been proficient at…spending the tax payer’s money by disguising such wastefulness as ‘investment’.

When in 2010, after Labour was defeated, a note was left on a treasury desk with the inscription; ‘There is no more money left’. Such a rushed message told us more about the actions of the previous administration than any historian covering the same period. Labour had, under Brown’s premiership bankrupted the country, spending money as if it had a yearly flowering ready for the civil servants in the tax office to pick and replace.

The Labour Party had sought to treat taxation, like the Sherriff of Nottingham in the days of the fictitious Robin Hood, as an obligation upon the citizen to pay; no matter how much of their contribution is wasted after collection. The Labour Party is the party of the state, and the state can only function on taxes. There is no other means of subsidy than the taxpayer as far as Labour are concerned.

This country needs a strong elected government fully prepared to do what is needed to rid our country of its deficit. Labour could never be such a government because it only knows of one response to any economic problem – borrow and spend. While the Tories are only interested in a second term, and will merely tinker with the debt hoping to keep the credit agencies sweet; and their constituencies safe.

It will require sacrifice and suffering on a far larger scale than we currently see around us. Yet neither the public or the politicians of whatever hue are prepared to countenance anything more than the kind of tinkering that Osborne announced in his Autumn Statement.

In January the credit agencies are set to reward such a pusillanimous approach to deficit reduction by our leaders; making borrowing more expensive and our deficit larger. In the words the character in Dad’s Army…we’re doomed!

           

           

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[1] Source: Office for National Statistics