: Public Borrowing: Nearer and nearer draws the time


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.

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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

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