Tuesday, 25 June 2013

Jeff Says

Jeff Randall writes as clearly and as pithily as anyone on the subject of British business and HM Treasury. Here he is, putting very succinctly what everyone in Westminster knows, yet almost none of them are prepared to acknowledge:

When the government talks of “ring-fenced” spending, it is referring to health, education and aid. But, in effect, the protective cordon extends well beyond these areas. According to the Office for Budget Responsibility, despite forecasts of higher employment and lower unemployment between now and 2017-18, social security spending – in cash terms – is not coming down. Neither is Britain’s interest bill, as it would be unthinkable to default on our sovereign debt (currently £1.3 trillion and rising).

Add up all the “untouchable” expenditure – social protection (£220 billion), health (£137 billion), education (£97 billion), debt interest (£51 billion) and international aid (£11 billion) – and £516 billion of the Chancellor’s annual outlay of £720 billion is hermetically sealed. Thus, if he is to make a dent in his £108 billion deficit, i.e. the annual difference between tax receipts and state spending, he has only £204 billion to shoot at. This, given the constraints of political realities, is a mathematical impossibility. It simply cannot and will not be done.

I think he is correct in his analysis and conclusion. Until or unless a credible politician leads one of the two main  parties and treats the electorate as grown-ups, we will continue to explore the area of the map marked 'Delusion'. I fear that the 2015 election is already set to be a bully-off between three parties who wish us to believe that a shade more 'austerity', or a shade more 'investment' will tip the scales. 'We care about ordinary working families more than they do!' - 'They got us into this mess!' - 'We can protect all public spending AND create an enterprise society!' Yadda, yadda, etc, etc. Ya boo sucks and how's my gold-plated pension pot doing?

2020 will be the election for grown-up politicians (maybe from one side only). Neither Cameron, nor Osborne, nor Balls or the Ed Miller Band will feature. A little bird in the Upper House who is close (by dint of his cheque book) to Number Ten tells me that Theresa May is the one to watch. She is running a tight Home Office, and has the respect of much of her party. I agree that she needs to work on her universal attractiveness, but she gets how bad things are. You may laugh. Just sayin'.

1 comment:

Bill Quango MP said...

you may have seen these. They are talking American, but the point holds.

1st one is how small a $100 million dollar cut is on the US budget.


And how the stimulus cheerleaders might have overlooked exactly how much debt Obama is building up.