Dec 2009 09

The Chancellor has shirked his duty to the country. Again.7

Today’s Pre-Budget report was yet again an exercise in procrastination. For all of the talk of hard choices, necessary decisions to restore the fiscal credibility of Britain were most certainly not taken.

A bit of tinkering here and there does not make a policy adequate to satisfy those commentators – including the IMF and the Governor of the Bank of England – who have said that the Treasury’s plans for fiscal consolidation are insufficiently rapid to restore the nation’s public finances to health. The Ratings Agencies are already uttering warnings about the affordability of the public borrowing – and those warnings should be heeded. Possible downgrading of British debt is all too real.

Of course a severe fiscal contraction in 2010 could damage the recovery. But this is hardly the point. The point is that the Chancellor should have announced today some solid spending plans along with a revised Comprehensive Spending Review, up to 2013-14 at least, explaining the required tightening in detail. He should have had the courage to do this and not leave all the unpalatable decisions to his successor after the General Election.

Let us be under no misapprehension. This country is facing a true fiscal crisis – arguably more severe than the one experienced in the 1970s – and there is an increasing chance the markets will yet resist the lure of buying more British sovereign debt. A buyers’ strike could well be on the cards. And then, once more, the country would be in the hands of the IMF. It happened in the 1970s – I remember the humiliation only too well – and could well happen again.

The Chancellor has shirked his duty to the country. Again.

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  • Barry Sheridan

    It is no great surprise to see this government refuse to plan, never mind implement any meaningful strategy to correct our fiscal plight.
    Every time Britain has elected a Labour government we end up in a mess thanks mainly to its malevolent attitude towards entrepreneurial independent wealth creation, its spendthrift ways and general lack of common sense. Sentiments that clearly resonate and appeal to a large segment of the national electorate.
    Perhaps if we produced an enlightened coherent political strata able and willing to teach the nation about the economic facts of life then we would be more successful. Alas the mainstream parties are all socialist entities in one guise or another, all exhibiting that tendency to pretend they have all the answers. The cure all solution they rely on more than any other is linked to spending money, whether we have it or not.
    It seems that only an external force works here, the IMF, which seems to be what will be required this time. Only it will be worse than the 1970s because this government has ensured through its actions that whatever administration follows will face financial turmoil and with it unpopularity that may pave the way for Labour’s early return on the back of yet more grandiose promises and easy remedies.

  • Lola

    I am praying for the bond markets to put this hopeless government out of our misery. It’s a pretty pass when one wishes for international humiliation in order to save us from perenniel penury.

  • Steve Robson

    what a good bridge those useless public servants (the Ruth Lea/TPA view of them, not mine) from the army built in ONE WEEK in Cumbria.
    How long would it take the combined efforts of Ruth Lea, the TPA and the IoD to build a bridge like that?
    Oh forever I guess, they don’t actually do anything CONSTRUCTIVE do they, just encourage people to not pay tax (a major cause of the deficit) and moan a lot.

  • Hardeep Singh

    Seeing that you have so much time on your hands maybe you should have helped them Steve.

  • Hardeep Singh

    BY the way Steve are you seriously saying that lack of tax payment is the root cause of this all. People have almost nothing left considering they’ve been taxed to death and yet you seem to think otherwise. Maybe it’s more the fantasy attitude you and fellow supoorters of the Government exhibit that’s the real issue.

  • Steve Robson

    I can assure you Hardeep that I don’t support this government any more – not now they are following the extreme right wing policies of the TPA and dangerous, self serving and misguided ideologues like Ruth Lea, who I consider to be almost as odious as Maggie Thatcher, the worst Prime Minister this country has ever had. It was the mates of Ruth Lea and the TPA that caused this mess, now they are blaming the victims. Such audacity is breathtaking.
    You clearly have more time on your hands than me Hardeep, replying twice in mid afternoon. I hope you are not a victim of this crisis caused by the banks and the failure of the private sector! Not that it matters either way I guess as you and other TPA supporters are apparantly taxed at 100% (or think they are).

  • Nigel Pickett

    At least Margaret Thatcher had the guts to do something about the inheritances of Labour’s incompetence the last time around. It might have been unpopular, but unfortunately that’s what was needed in 1979. You see, it’s not a popularity contest any longer. It’s about doing what’s needed – standing above it all and making unpopular decisions when required. That’s what I, and probably a good proportion of the electorate, expect politicians to do right now. Are Labour going to do it? Don’t hold your breath!