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Wednesday, December 03, 2014 

The candour deficit.

On Monday, Gordon Brown formally announced he would not be standing for re-election next May.  It was hardly a surprise, considering he rivals George Galloway in the rarely attending Westminster stakes, not that many other former prime ministers have knuckled down to life on the backbenches either.  With Brown leaving parliament and a whole host of other New Labour figures also heading for the exit, it pretty much signals the end of an era of politics which came to be defined by spin, media management, never-ending war (so no change there then) and whisper it, continuous growth.

For one suspects that regardless of how Brown is viewed now (indicative of the general tone is how a goddamned zombie comic portrays him in about the most sympathetic light of anything), history is likely to judge him far more kindly than it will either Blair or Cameron.  Jonathan Freedland fairly sums up why, and while you could argue that Blair and Brown are inseparable, as no doubt some of the accounts to be written shall, it remains the case Blair's failures were principally his own while Brown's were collective.  No one except the odd Cassandra said banking regulation should be tightened, nor warned they were becoming too big to fail.  Yes, Brown without doubt encouraged the City to let rip, to keep expanding, was pals with Fred Goodwin and so forth, but so would any other chancellor of the exchequer been.  The Conservatives it's worth remembering wanted to pare back regulation further.

Brown's departure will nonetheless leave us with those who love to emulate his worst traits while despising his best.  Each time George Osborne comes to the dispatch box for either the budget or the autumn statement, he morphs a little more into his supposed nemesis.  Each time he manages to confound those who said the deficit was going to be up, at least until you read the small print.  Each time he succeeds in finding a gimmick of some kind or another, usually one designed specifically to appeal to the middle-class, aspirational voters the Tories need to reject both UKIP and Labour if they are to ever win a majority again.  Each time he insists none of this would have been possible without the coalition's "long-term economic plan", a plan that has been altered radically from the one he presented in his first "emergency" budget.  And each time, he seems to get away with it, helped by a media obsessed by the very things he targets, and whose bias against Labour seems to only grow.

Osborne has after all failed miserably when judged on that first budget.  He promised a single parliament of pain, after which happy days would return.  Instead he's been forced into claiming everything's coming up Osborne despite how the country now won't be in surplus until 2018.  His big mistake, frontloading cuts in spending on infrastructure, choked off the slowing recovery and gave us two years of stagnation.  Even now, with Britain judged to be growing the fastest of any G7 economy, the quality of the jobs created is so poor and wages so low it's failing to bring in the income tax receipts necessary for borrowing to come down.  By rights, and if these were usual political times, all Labour should have to ask voters is whether they are better off than 5 years ago, and then sit back and wait for the inevitable.

Only they aren't, and if the coalition has succeeded in one area, it's in blaming Labour for the recession and everything since.  It was all the "spending, borrowing and welfare" that got us into this mess, not the most serious worldwide economic crisis since the great depression.  It doesn't matter that borrowing is now higher than it was under Labour, or indeed that the welfare bill remains stubbornly large despite the coalition's attempts to slash it, demonising the most vulnerable in the bargain, as those determined to err, do exactly what Osborne has done will never be trusted with the public finances again.  We are on the road to surplus, to prosperity.

Hidden away in the Office for Budget Responsibility's report is what it thinks of the cuts Osborne is proposing to get us there.  As they put it

The implied cuts in RDEL during the next Parliament would pose a significant challenge if they were confirmed as firm policy, one that would be all the greater if existing protections were maintained. But we do not believe that it would be appropriate for us to assume, ex ante, that these cuts would be inherently unachievable and make it our central forecast that this or a future Government would breach its stated spending limits if it chose and tried to implement them. But... we might need to include an ‘allowance for overspending’ in our forecasts, similar to the ‘allowance for shortfall’ that we currently incorporate to reflect likely underspending against DEL plans.

In other words, they're a fantasy.  All the obvious fat has already been sliced off.  Already it's resulted in this sort of situation in prisons.  Day to day spending on public services is projected to fall to 12.6% of GDP by 2019/2020.  Total public spending meanwhile as a proportion of GDP will fall to its lowest in 80 yearsAs Rick says, were this to happen it wouldn't mean shrinking the state, but closing sections of it down.

Clearly, this isn't going to happen.  Osborne is many things, but suicidal isn't one of them.  He most likely will look to further cut benefits, as he says, only as we've seen doing it in practice is far harder than in theory.  He could slow the pace of reduction further, except Cameron has already promised tax cuts once the surplus utopia is achieved, and Osborne is set to force a vote in the new year on whether Labour will sign up to his plans.  That leaves only raising taxes, with VAT being the most appealing to a Tory who won't countenance putting up the top rate of income tax, as demonstrated by his swift removal of the 50p rate.

That's all for after the election though, when a Tory government or led coalition can do whatever it likes.  Trapping Labour just as Gordon Brown stitched up the Conservatives is Osborne's game now, even if it costs him money as the stamp duty cut will.  Nothing is too much for the aspiring classes, boosting the housing market once again just as it looks to be cooling.  It also helps those buying to let, and could have the perverse effect of making those about to exchange contracts think again now the £250,000 mark won't see the stamp duty to be paid leap.  Ed Balls was smart enough to say this was Osborne catching up with the idea of taxing expensive property more, just that it wasn't enough, as indeed it's not.  The best option would still be a complete revaluation of the council tax bands, only the howling about the proposed mansion tax would be nothing compared to the wailing should any politician dare to suggest those who have seen their home double or triple (or more) in value since 1993 should be contributing more to local services.  It also wouldn't reach the Westminster coffers, another reason it's not going to happen.

As for what further damage this approach will cause to politics once everyone realises they've been had again is anyone's guess. Only the Lib Dems came near to being frank in the 2010 campaign over the scale of the cuts that were to come, and it could be the same again this time.  What made Gordon Brown more than just a cunning, always out for political advantage strategist was he thought long-term also.  Without the funding poured into public services the cuts imposed so far would have been truly devastating; had we joined the Euro we'd facing the same problems as the rest of the Eurozone; had Brown and Alistair Darling not recapitalised the banks the chaos doesn't bear thinking about.  Osborne and Cameron by contrast have no long-term vision despite their "long-term plan".  Their approach has been to mortgage the future and use us as collateral.

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