Budgetary cuts? Yes, there will need to be some!
ConLibs failing to get to grips, hard enough, fast enough, and early enough.
Sets of economic figures released over the past few days can leave us in no doubt at all that the coalition government has so far failed in its mission to reversed the economic malaise left behind by Brown, Balls, the Milibands et al. Inflation is on the rise, destroying savings which gather no interest, interest rates are due to rise soon to add to inflationary pressures, then a second wave of wage/price demands could be on the way to spell disaster for our frail economy, and I don’t see Miliband Minor stepping in to warn the unions off.
During 2011, the British economy will suffer from rising inflation and sluggish (in some quarters, possibly negative) growth. This grim combination will be set against a budgetary situation that can only be described as ghastly.
During November, the Government borrowed an astonishing £23.3bn – the highest total for a single month since records began. While tax receipts were 3.1pc up on November 2009, government spending was no less than 10.9pc higher. And you thought we were in the middle of a fiscal squeeze! These November figures are no one-off. UK borrowing this year has been higher than during 2009-10 in three of the past four months.
November’s national accounts, released last week, were shocking. Government spending last month was sharply up on the same month in 2009 – yes, up! British state borrowing is still escalating, with the national debt rising very quickly.
George Osborne was recently in New York, soaking up plaudits for boldly leading Britain into fiscal austerity at a time when, apparently in contrast, America’s feckless political elite has allowed the national debt to balloon. The problem is that UK austerity, so far at least, is a myth.
That dear friends is the real price that we are starting to pay for (a) the immensely harmful, deliberate, and foolhardy overspending of Brown’s government as it sought to cling to power, (b) the moderating effect of the imploding Liberal Democrats , and (c) the inexperience of Osborne and Cameron as they weigh political niceties against economic realities.
It can be seen that QE is no answer at all, and that ever increasing public spending linked to government borrowing will squeeze the money markets even further leading to inexorable pressure on rates. Unless real reductions in public spending are found soon then there will be no room for manoeuvre in any attempt at reducing taxes to aid a private sector recovery. Brown wanted the country to spend it’s way out of recession, trouble is, he wanted to do it by printing money, any true Conservative would want the country to spend it’s way out of recession but by reducing the tax burden and allowing us to decide what we want to spend our earnings on. Neither way is possible under current circumstances where public spending and public borrowing remain so massively out of control .
So, if you think the evil Tories and Lib-Dems are wrecking the economy, destroying jobs deliberately, bulldozing hospitals and schools, killing the first born child and releasing swine flu on the population you couldn’t be more wrong. Right now they are still being carried along on the tidal mess left by the last government. Whatever fiscal reductions you may have experienced are nothing compared to what is needed to halt the decline in our national economy.
Big question is, do they have the political nerve to do what is right?