The constant ctiticism of the Government’s budget deficit figures is that the cuts are too great and too fast. The effect, or merely the impression, that this is so affects consumers, output and employment. The prognosis of the Coalition is that such a policy will lead to a stagnant low-growth economy and the deficit would not come down very much, if at all.
It is disappointing to the critics that so little publicity was given to public borrowing in the first two months of this financial year which shows just that: borrowing in the first two months of 2011/12 is up from £25.9 billion to £27.4 billion – up not down!
Of course one swallow – or is it two- does not a summer make. Or does it? Well, this argument should be settl;ed in July when we have three months figures for GNP, empliyment and public borrowing. It will be a relief to pass from conjecture to fact. There are enough straws in the wind to suggest that growth will be either exceedingly modest or none at all. If then public sector borrowing has not fallen when compared with last year, the Coalition target of eliminating the deficit in four years will be lost.
Politicians will busily spin. It will be argued that there are special factors: currency uncertainty in Europe, a stalling US economy and slow downs in the BRIC countries who are expected to fuel a global economy. All very true and plausible. However, these pleas should go on deaf ears. There are always special factors and Governments are supposed to make allowance for them. The game will be up – and it should be called.
The absence of what is called a Plan B, or Plan C for that matter, places the Coalition with a conundrum. What is to be done? – as Lenin would utter. Is such a dilemma not worth a vote of no- confidence. I can hear the objections. There is no prospect of unseating the Government and you look silly and weak if you move these motions without a chance of a majority. Is not this what the leadership of the Labour Party is really about? The baring of breasts and the gnashing of teeth which passes for Opposition now does not meet the challenge of the times. What about a reasoned motion putting forward a number of believable proposals for kick starting the economy followed by a no confidence motion? Anything less than this will fail. Those who urge an alternative economic policy should have the courage to enunciate it now. Well in July, actually. Any sign of heads being knocked together or is it time for hols? Time enough said slow.
Filed under BBC, Cabinet, Cameron, Coalition Government, Conservative Home, Deficit, George Osborne, House of Commons, Labour Blogs, Labour Goverment, Lib Dem blogs, Nick Clegg, OBR, Treasury
According to the well-repected bog Conservative Home, the Government is in a state of confusion. Cameron is determined to push through a major reform programmed fueled by Conservative ideology; small government, tax cuts (eventually); constitutional reform (reluctantly), educational reform (expensively), benefit reform (work if you can or else); self-help (Queen Victoria’s self help maunual has been lost), and neo-colonial glory (no one has told Assad and Ghadaffi). What is very clear, as the Archbishop of Canterbury has enunciated, no one voted for Coalition policiues. In the jargon there is no electoral mandate. For the moment the government is cemented together by the fear of electoral wrath: it is better to be hung together than singly.
Every shrewd observor knows that these issues taken separately will not sink the Coalition. The only issue that will do that is the state of the economy. We must wait for July for the GDP figures for the second quarter. If these are bad the game may be up. What would be bad? Zero growth would be bad because it would signal that there has been no growth for the nine months in which the effect of the Coalition’s economic policies has been experienced. Slightly higher growth with a projection for the year as a whole of 1 percent to end 31 March, 2012 would be bad because the public sector deficit would be at unacceptable levels. If either of these economic prognostications becomes true there the very real consequential result that the Governmen’t legislative programme would have ground to a halt and the Coalition itself in its present form will collapse.
It may be that it is not only Arab countries and Greece that will have become ungovernable. I sense a gathering storm. Populations in many countries will arrive at the conclusion that politicians are not to be trusted and our political systems may colla[se. If citizens do not trust the system to safeguard ther basic interests they will seek people-power alternatives: they are already doing so in Libya and Syria. There is something intoxicating about nightly tv screens full of demonstrasing crowds with banners and music. Why not us and why not now?
I suspect that our own governemnt is frightened. If the streets fill up with pensioners and trade unionists, if it goes on through the summer, if one policy initiative after another grounds to a halt, what is there to do? What is certain is that the disease of protest and rejection of authority knows no country boundaries. I have made fun of the Big Society but I do recognise that it has some virtues. If you can state, and if it is true, that we are responsible now and not the government, might the dilemma of electoral madate be solved. The Coalition could say, ‘You (we) are the masters now. Don’t blame us blame yourself (or is it me that needs saving)?
Filed under BBC, Cabinet, Cameron, Coalition Government, Colonialism, Conservative Home, Deficit, Economics, Ed Balls, Europe, Greece, House of Lords, Labour Blogs, Lib Dem blogs, Liberal Voice, Libya, Middle East, OBR, Politics, Spending Review, Syria, Universal benefits, Yemen
Blair tells us, that is the British public, that we need a better plan for North Africa and the Middle East. What does he mean? If he means what I think he means a better plan is the last thing Britain needs. A little clarification will help. Who are ‘WE’. It appears that NATO, the European Union and the USA are ‘WE’. or to be brief the Western World. And what do we need a plan for? What is it to do for us? The purpose of the Plan is to assist Arab states become more like us. Particularly those who possess oil and mineral resources but to be fair all states within that geographic area. In our view all democracies will repect universal rights fair representation, equality and freedom under the law and all of them wish to attract more investment, grow and attract investment and develop commerce to and from the West. What should we do? We should intervene to help these changes take place and use diplomatic and financial means and armed force to help bring these changes about.
President Obama approves these objectives but despairs of a lack of willingness of NATO countries to pay the price for the extra spending on defence such a policy requires – including both France and the United Kingdom. There is, apparently, no political will. Friends Cameron and Hague have the will but not the money and each day that passes limits our armed capabilty. Imagine a conversation at the Foreign Office.
Secretary of State can we have you direction, please. Here is a list of countries we are determined to assist to democratic status. They all require a UN resolution. What do we do? What do we do, you say. We act, this Goverment acts. Give me the Calendar. Not that one, 2011 you ass. Let’s see. We need to allow a week between resolutions. Let’s do it aphabeticallyby week. 1.Bahrein 2. Gulf states(?) (need to be more precise here) Israel/Palestine (a tall order this) 3. Lebanon (good thinking), 4. Saudi Arabia, (you’re joking(? ) , 5. Syria (a brutal race, we need armed force here, get the Turkish Premier on the phone. What’s that! A deal on Cyprus needed? Have we not done one of those? Get Greece on skype. 6. Yemen ? (Good God 500,000 men could get lost in the desert. I exagerate. But you know what I mean.) What does Obama think? More defence expenditure and quickly. Something about lendlease, if it would be helpful. So we have reached a decision point. I’m strong on decisions you know. Look I can’t think clearly now. Get Liam in the office on Monday. Hold on. Here is one of my inspired thoughts. National Service! Get the unemployed youth off the streets, lower the unemployment rates at a stroke, re-issue some of those Lee Enfield’s -and off we go. Hey, ho the boys. Let Liam know ahead of the meeting, there’s a good chap.
Filed under Arab League, Bahrein, BBC, Cabinet, Cameron, Coalition Government, Colonialism, Economics, Ed Balls, France, George Osborne, Ghadaffi, Gulf States, Israel, Italy, Labour Blogs, Liam Fox, Lib Dem blogs, Liberal Voice, Libya, Middle East, National Service, NATO, Nick Clegg, Obama, OBR, Politics, Sarkozy, Syria, Turkey, Wlliam Hague, Yemen
There used to be a day when the British economy was not run to please bankers or technocrats in international bodies. Alas, they are passed. However, it is worth asking when you read a forecast, in whose interest is it published? The IMF believes that it is important for its members to reduce public indebtedness and makes it a public objective regardless of the beggering of any nation’s citizens until this goal of public policy is realised. Naturally it is supportive of the budget deficit programme of the Coalition. The IMF addressed the issue of a Plan B. You will be pleased to know that if growth remains low the IMF would support monetary easing, keeping interest rates low and putting a brake on cuts (without anyone noticing it). In this way the deficit would not come down quickly in the first two years but would come down faster in subsequent years.
This revelation of the existence of Plan B is hopeful but not reassuring. If growth is slow, the main body of public expenditure cuts is realised , and assuming all other parameters are stable (other than unemployment) the deficit will not come down. The credibilty of the Government in the markets, which Boy George goes on about, will be lost. If then the Government persists it will be confronted with a mountain to climb in years 3 and 4 when credibility is lost and the deficit stubbornly high. If then Georgie presses on growth will remain low throughout the five years, So what then Grannie do we do next?
Well, dear, says Grannie, it might not be as bad as that. That’s what they all say, says I. What is the use of saying that when the flood waters have reached the bedroom sill? Shouldn’t we have been alerted before this time to leave the house? Hindsight, says Grannie, it is an easy art.
There are other dangers. The IMF talks bravely about global growth rates remaining high, surviving high commodity prices and resuming stable growth and low inflation. But then he would, wouldn’t he? But we know that all recessions and recoveries are unique. Perhaps this depression will last for ten years or more. And what shall we do then Granny, says I. Don’t worry dear, says she, I’ve put a little money aside to cope with the odd crisis. Well Granny, that’s the problem. We have been using it. Using it? No one told me that. The problem Grannie is that debts continue to rise. Good gracious, what did you say about the bedroom sill. Take me there. There’s time to jump. A splash is heard, off stage. Granny, you can’t swim! These words came too late. Poor Granny, poor me -oh, and by the way, poor you.
Filed under BBC, Budget 2011, Cabinet, Cameron, Coalition Government, David Smith, Deficit, Economics, Ed Balls, George Osborne, IFS, IMF, Lib Dem blogs, Liberal Voice, New Stateman, OBR, Politics, Rising prices, Treasury
I want to tell you about my mission to dominate North Africa and the Middle East. Well, not exactly mine but ‘This Coalition Government’s’ – (its what I call it now) – although to be accurate I should say we – the old colonial powers, Italy, France and Britain. Or is it NATO – I suppose it is. Well whatever it is, it is mine and I stand and fall by it. Look Charlie, stop laughing, I’m tired of this. Your precious Labour Party supports us, the House of Commons approves, together with 40 percent of the electorate. What more can you ask for? Don’t answer that, rhetorical you know. When I was a young Yorkshire lad two thirds of my Atlas was colured pink. It made you very proud to see it. And now, virtually nothing. Can any kid be proud of that? The answer is , no, Charlie. Of course not. Now we have another chance. These African Johnnies, it seems to us at the Foreign Office, wish to live in a democratic country like our own. Democracies are good for trade and commerce. We wish to trade and invest, of course we do. Ipso facto as they say at Oxford, supporting these revolutionary Johnnies is in the national interest. It was always in our interest whether the map is coloured pink or green. Of course, if you intervene like we are doing in Libya in other places you cannot guarantee an outcome. But we three countries can see off Ghadaffi. It won’t take long – at least we hope not. What kind of chaps would we look like in the Middle East if we had done nothing, stood by on the other side of the road, while citizens were slaughtered. In my view Charlie – and please stop laughing – there is the domino effect to consider. If one country goes pink – that is pink for democracy now of course – other countries follow suit and the black and grey parts diminish. It makes you glad to know it. Glad to be British/Italian/ or French. I am glad. Never in my wildest dreams did I believe that I would be embarking on a mission to free so much of the world’s population from tyranny and poverty. Not single handed , of course. I spring out of bed these days with joy in my heart. If you snigger again, I’ll punch you. What did you say, consider the slogan, ‘In your heart, you know I’m right.’ and look what happened to him. Too abstruse Charlie. You can do better.
In many ways these are dark and difficult days for ‘The Coalition Government.’ We may fail overall to rescue Britain from the financial mess bequeathed by Labour. I admit it to you Charlie as we are off the record. But I – the Foreign Secretary – will look back on my experience at the Foreign Office with pride. We did our best to change the political colour of millions of people. What more can you ask of a British Foreign Secretary (sound of laughter and the crash of over-turned furniture off stage).
Filed under Arab League, Bahrein, BBC, Cabinet, Cameron, Coalition Government, Colonialism, Egypt, France, Ghadaffi, Gulf States, House of Commons, Italy, Labour leadership, Labour Party, Lib Dem blogs, Libya, Middle East, Oxford, Politics, Sarkozy, Syria, Wlliam Hague, Yemen