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Not the right way

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not the right waySo many things that I said “No” to during the past week.

It didn’t help that “Dave’s” coalition government and the Opposition sort of joined forces to whip their MPs to vote against giving us a new referendum on our relationship with the EU, after all it is a totally different beast to the one which we last had a say about in 1973. The idea that people could register their ePetitions on the No. 10 website and if they had enough support (over 100000 signatures) they would result in a debate in the House of Commons is essentially a good one, especially as there are, from time to time, issues where it seems our MPs might be slightly out of tune with the public. However, a second petition relating to the price of petrol will apparently NOT be debated because of a lack of time in the Parliamentary calendar! Come on Dave, your government is devaluing the importance of these petitions if you cannot find time to debate them.

I profoundly disagreed too with the whole “solution” to the Eurozone crisis, this managed default of the Greek debts is a signal of much worse to come, we have spent the last two years throwing more debt at the Greeks and the Irish with other economies also being drip fed bail out funding, and let’s not forget how much was borrowed by Gordon Brown to increase the liquidity of British Banks either, I fail to see how you can solve anyone’s debts by piling more debt upon them! But we are led by the (European) nose to help create a 1.2 trillion Euro fund to assist member states who cannot manage to spend   around the same amount that they earn in revenue. Surely a result of the Brown/Obama plan to solve the banking crisis, invest spend your way out of trouble! Italy, Spain and Portugal will be next to feel the pressure of the mountain of Eurobond debts, as once again we see economies that are introducing austerity measures rather late in the day to balance their books. If we ran our household budgets in this way we would soon be looking towards a voluntary bankruptcy! Which brings us to the UK, where we too have come to realise, late in the day, that our national debts and budget deficit needed to be urgently addressed, and despite the efforts of the coalition government to bring public spending under control, those debts continue to rise and public spending continues to be a massive burden, George Osborne tells us that we are not contributing much to the European Stabilising mechanism but with deft sleight of hand we are increasing our contributions to the IMF instead, any wonder that we fail to meet spending targets? The hand of Brussels lies heavily upon the decisions made by our politicians and the whole mess has the German Chancellor, Angela Merkel musing over the future peace of Europe, possibly a rather far fetched view in my opinion, but it shapes the ridiculous writing in some of our newspapers this weekend.

Solution, allow the Eurozone to collapse and let member states reintroduce their own floating currencies, allowing a managed default based upon the exchange rate of the remaining Euro at the time of conversion to the new currency. Tell these member states that the European Central Bank will not be bailing them out in future, perhaps then we might see some fresh starts and some  growth slowly emanating from the ashes, this whole sorry affair of the last week has been more about saving the single currency and the European dream of political unity more than it has been about saving the economies of individual member states, and by playing their own small part our coalition government has nailed its flag to the mast as a lukewarm supporter of European integration. I firmly believe that ALL British politicians were wrong, wrong, wrong, not to allow their MPs a free vote during the EU debate, and that sometime in the far future the EU will collapse as a result of its utopian political and economic dreams.

Next disagreement is with Iain Malcolm, the Leader of South Tyneside Council who wrote in the Guardian during the week that councils were taking the flak for the government’s spending cuts. Was this a paid for article Iain? Anyway, pretty good at playing politics, perhaps the first stage in an election strategy for next May blaming the evil wicked Tories and Lib Dems for wreaking misery on us all but good old Labour in South Tyneside has managed to produce a budget which will not increase your council tax for e second year in succession! Can you see it coming? It may have been better and more honest of him to admit that Labour frittered away £ billions when in office, and saddled us with larger debts than we accrued through fighting the Second World War, perhaps he should have done a Liam Byrne and admitted that the cupboard was bear at the end of Gordon Brown’s tenure. He said:

The government’s cuts are brutal and ideological. Our task isn’t just to protect residents from the worst effects – it is to make them fully appreciate whose hand is on the axe.

Brutal? Idealogical? What then would Alistair Darling’s cuts have been described as if Labour had won the last election? There is no doubt that you could hardly have passed a cigarette paper between Labour and the Tories public spending pronouncements at the time, £2 bn difference within a national debt amounting to £1.2 tn is minuscule. That is where I find my disagreement with the Leader of the Council, a fair lack of honesty and a total lack of clarity over who put us all in the financial mess that we are in, he was quite happy to accept the cash that Gordon Brown’s government kept producing, quite happy to keep increasing council taxes year after year when even Brown’s largesse was deemed as insufficient. He knows, I know, and we know, that the party had to come to an end.

Because it doesn’t have to be like this. Local government has been a force for good in Britain. We will work to defend our communities by examining new and innovative models of service delivery – through trusts and co-operatives, asset transfers to the voluntary sector, strategic partnerships with the private sector or more joint working between councils.

Ah, now here are the clever little secret caveats, we WILL do it the way the coalition wants, because we DO want to make sure that there will be no increase in council taxes again! Look, yes, I know and understand that it is tough going, with very difficult spending decisions to make, but I also know that we knew this latest tranche of cuts was coming, it was NOT a complete shock,we knew twelve months ago that the “front loading” was only the first phase, this is probably the press release was made by Martin Swales rather than a Labour politician. Please take time to look again at the Gazette article, because therein lies another disagreement, some fool writing in the comments section reckons we somehow managed in the past without a Chief Executive, beats me how this sort of stuff gets into some minds. No council could be administered without a manager at the top, it matters not what he/she is titled, Chief Officer, Chief Executive, Director, or Town Clerk, we have always had a one!

Finally car parking in South Shields, perhaps one of my hobby horses, I wrote at the time of the introduction of the first “pay and display” areas in Beach Road, South Shields that it would not necessarily kill off the town centre, but also warned that it was the thin end of the wedge and that Town Hall bosses would soon extend the pay and display schemes to other areas, and I was right. I published a picture showing Beach Road populated with parked cars using the new meters, more recent evidence suggests they are not quite so popular now, for instance I can never remember seeing Beach Road so empty opposite the Town Hall, yet places such as Derby Street, Claypath Lane, and back Westoe Road are totally choked! There are even decent amounts of spaces in the town centre car parks since the charging scheme was amended, 1p per minute for just one hour is simply not giving the average shopper sufficient time, the 1p per minute charge should extend to the first two hours as a good compromise. If we can go somewhere toward attracting these motorists back to the areas where they want and need to park, then we won’t be creating as many problems for local residents who see their streets choked by other motorists, then we won’t have the thorny and expensive problems of resident permit areas!

“Big society” parking operators? OK I can go along with that, but more and more “pay and display schemes” at the wrong prices and in the wrong places is now something that seems to be creating additional problems in areas where we don’t need them.

OK, end of rant, I now have a pumpkin to carve, if I can manage to get Iain Malcolm’s face on it I’ll post a picture, I seem to remember that George Elsom looked pretty ghoulish a few years ago 🙂
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Cameron warns US and Europe to tackle deficits.

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david cameron…whilst failing to control UK PSBN?

I guess David Cameron is taking the right approach in trying to dissuade other nations from continuing to “live on tick” and to get a grip on their own structural deficits, we have gone through one of the most irresponsible economic phases in the modern post war history of the world, there are so many with their heads buried in the sand refusing to see or hear the warnings that eventually when the chickens come home to roost there will be no more corn. One cannot expect nations to borrow excessively without any means of being able to repay the debts, only the most manic households run their family budget on this basis, but after Gordon Brown and Barack Obama badgered the rest of the free world to “invest” in their economies and borrow to bail out the banks following the financial collapse of 2008 it follows that the strain on financial systems will eventually cause a very severe and painful recession as the cash runs out. Hence the need for a false solution known as quantitative easing, to you and I this more easily understood as turning on the presses and printing more money, a historical cause of inflationary pressures leading to increasing interest rates! The writing is already on the wall in respect of the UK economy although the Bank of England is extremely reluctant to allow base rates to rise in fear of depressing the fragile economy even further.

The greatest worry that I have over David Cameron’s fine words in the “new world” is that his coalition government is not making sufficient headway in its own efforts to tackle the budget deficit left by Labour’s wholly incompetent handling of our money, the latest figures for the UK’s Public Sector Net Borrowing requirements showed a record £15.9bn borrowing for last month, an increase of£1.9bn over July signalling a likely inability to meet the full year target set by the Office for Budget Responsibility. Those who warned that austerity measures were going too far too fast were too hasty to judge, and the reality is that the UK’s public spending and national debt are still far from being under any strict control, the coalition government’s problems are massively compounded by the crisis in the Eurozone propelling further injections of our cash into foreign banks to prop up states that (a) followed Gordon Brown’s advice to spend their way out of recession, and (b) did far too little far too late when they realised that no growth equated to no cash. On top of this it has been revealed that the build up of (off balance sheet) debt accruing to the “investment portfolio” of PFI schemes rolled out by Labour in their last term grows with inflation and is likely to have crippling effects on public bodies such as the NHS and Local Authorities as they face up to thirty years of heavy mortgage payments to private companies as well as being tied in to massively expensive maintenance agreements, much as new schools and hospitals are welcomed the method of paying for them is a scary business. South Tyneside will not be immune from this either and I predict that the future costs of our new schools and clinics will lead to even tougher decisions having to be made on expenditure for other services in a painful reality check (if only John Major’s government had not had this bright idea of mortgaging our children eh?).

A reality check is needed from Cameron and Clegg too, it is right to get the Obamas and the profligate spenders of this world to mend their ways, especially if we want China to lead the world into growth, but the PM can only safely harangue them if he is comfortable with the financial stability within his own country first, and for now I don’t think that the coalition has really got to grips sufficiently with the debts left by the disastrous Mr. Brown. Furthermore, spending cuts and austerity measures do only half of the job, the other half requires a complete change of direction, and it was “change” which Cameron campaigned on during the last election, to produce a radical and credible growth policy which involves reform of the taxation system.  So far there have been very few signs that George Osborne wants to stimulate the economy with an effective plan that shifts the emphasis from public to private sector investment, the 50p tax rate needs to be abolished despite the howls of protest that will ensue, the Lib-Dem plan to take the low paid out of the taxation system needs to be enacted quickly, National Insurance contributions from start ups need to be reduced, and most importantly we need to re-adjust our relationship with the EU and throw off  the shackles of its financial and political strictures we need to get back to having a great trading market with Europe as it was originally envisaged. Osborne needs to be reminded that lower taxes have always resulted in higher tax revenues, and if coupled with lower public spending this will encourage consumers to have more confidence in their own budget planning and spending power and their decisions will help foster a return to controlled growth in the economy.

In short Cameron’s warnings may be right, but he must put his own house in order first before lecturing the world, his government will stand or fall on this one single issue.

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If Labour had won under Gordon Brown……..

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…….their “cuts” would begin to bite in two days time.

It is so easy to forget that during the campaign for the last general election you could hardly pass a cigarette paper between the economic and fiscal policies of the two main parties, the Conservatives were promising around £16bn worth of savings to reduce the structural deficit built by Gordon Brown’s regime, and Labour were proposing £14bn worth of cuts in their next planned budget which would have been effective from April 1st. next year. That £2bn difference is minuscule when viewed against the £1 trillion (and growing) debt that they left us.

Yet now that Gordon Brown has been consigned to the history books and Alistair Darling forgotten about, can the Labour Party in Opposition be responsible enough to stand by their manifesto pledges and talk freely about the areas which would have suffered had they swung their axe?

It appears not, in recent days both Ed Balls, the Shadow Chancellor and Harriet Harman, the Deputy Leader have both evaded questions about Labour’s cuts whilst the party’s leader embarks upon a campaign of supporting street demonstrations and direct action, Balls in his interview with The Daily Mail on Monday made the slightly ridiculous argument that the economy had started to show signs of strong growth at the end of Labour’s stint (0.2% if I recall correctly) and that coalition policies had stunted that growth re-stoked inflation and set unemployment on an upward path. The ridiculous part of the argument is that  the fiscal measures announced in Gorge Osborne’s first budget will not come into effect until April 1st. this year, and Balls knows it full well, it is the same date that Labour’s budget would have been effective from if they had won the election. In his interview Balls gave no clues at all on where Labour would have wielded the axe as they set about “halving the deficit in four years”. Yet he and his leader were prepared to share a platform in London decrying the government for doing what Labour would necessarily have had to do.

Harriet Harman repeated the same lame argument on the BBC’s Daily Politics Show yesterday, and once more utterly failed to convince in her answers to the questions about where Labour’s cuts would hurt.

Interviewer: You talk about the cuts being wrong but you do not talk about the alternative. You also do not mention that you would also be making cuts.”

HARRIET HARMAN: “We do. We say that we would halve the deficit over four years. Now what happened is  the economy was hit by a global financial crisis. We had to allow the deficit to rise to protect the economy.”

Interviewer: “I know it’s tempting to get into the history lesson.”

HARRIET HARMAN: “I’m just trying to explain what we would actually do instead. There is an alternative and that’s what we’re setting forward.”

Interviewer: “So when it comes to cuts where would you cut and what would you cut?”

HARRIET HARMAN: “Well we think that Government is making matters worse because they’re slowing down economic growth.”

Interviewer: “You’re not answering the question and that is the problem.”

HARRIET HARMAN: “Well I am. Because basically the cuts are making. What the Government is doing is making the situation worse. They are making unemployment rise. We are seeing growth falter and that makes it harder to cut the deficit. So my point is they are making the deficit worse.”

Interviewer: “Don’t you see the problem though with this approach because you at the last election said that you would have to make cuts. Now it is impossible…”

HARRIET HARMAN: “Halving the deficit over four years.”

Interviewer: “To get you to say where you would cut. I’ve had Ed Miliband, Ed Balls sitting in the same seat. He wouldn’t say it.”

HARRIET HARMAN: “No well we’ve said over four years. We would.”

Interviewer: “Where? Where?”

HARRIET HARMAN: “We’ve said that we would consolidate backroom functions. That we would hold back on, erm, investment in capital that we’ve been doing so much over the last thirteen years of. So we’ve said it would.”

Interviewer: “Some of the people on that march. Some of those people listening to Ed Miliband would have lost their jobs under a Labour Government. Yes or no?”

HARRIET HARMAN: “Well I think that basically we would see, er yes fewer people employed  in the public sector. We wouldn’t see the increase in public sector employment that we’d presided over. But I think to assert.”

Interviewer: “But that’s interesting so absolutely categorically some of those people who were there cheering for Ed Miliband would have lost their jobs because you would have cut their jobs had you been in Government?”

HARRIET HARMAN: “I think people were actually saying that the cuts are too far and too fast and the idea that the private sector.”

Interviewer: “The answer to that question is yes isn’t it. They answer is yes. Some of the people there would have lost their jobs because you’d have had to have made cuts in Government.”

These are very weak arguments to be barking at people looking to support the Labour Party in opposition especially when viewed against the published spending plans that Balls, Miliband, and Harman had put their metaphoric signatures to when in government only twelve months ago.

Official Treasury figures from the Budget show that Labour would cut just £2 billion less than the Government in 2011-12:

‘Under the plans that this Government inherited, £14 billion of spending cuts were planned in 2011-12, compared with 2010-11. This Government’s spending cuts amount to £16 billion over the same period’ (HM Treasury, Budget 2011, p. 10)

And so we are left with the rather distasteful images of a Labour leadership lacking in honour and candour as they continue to hide the truth about their own planned cuts, whilst standing shoulder to shoulder with thousands who were deceived into believing that things would have been so much different, the anarchists and the perpetrators of violence may well NOT be part of the trades union movement but we can almost guarantee that at every rally and protest planned over the next couple of years they’ll be there. Conveniently, Labour’s spending cuts will not!

Video courtesy of Guido Fawkes.

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Enterprise Zone good news for North East

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logoTyneside not forgotten in Budget

One of the better pieces of news from this week’s Budget was the announcement, from a Tory Chancellor who some decried as wanting to kill off the north-east, of the creation of two “enterprise zones” for the region, one to be in Teeside and the other to be on Tyneside, the exact locations to be determined by the members of the respective Local Enterprise Partnerships. I am glad that the announcement has received a “warmish” reception from the Labour Leader of South Tyneside Council Iain Malcolm who said:

“Clearly we have a decision to make, and we have until May until we need to advise the Department for Business on where we want this, but it is a welcome situation.”

The legacy of the last Enterprise Zones created in the 1980 Budget from Nigel Lawson is mixed with evidence of some lasting success and evidence of job transfers where employment had moved into an Enterprise Zone but had been lost from its previous location, from 1981 to 1986 the Enterprise Zones had cost nearly £300 million, but 2,800 firms were established in them, employing over 63,000 people. Some estimate that only around 13000 net jobs were created in the areas attracted by low local tax rates but the government at the time probably saw low tax revenue as being far better  than no tax revenue at all. Some locations such as the Merryhill Shopping Centre in Dudley, the Metro Centre in Gateshead, and the Canary Wharf redevelopment in London are seen as longer term successes where the employment provided probably equalled or bettered the employment that had previously been lost.

For us here in South Tyneside the location of the North East Enterprise Zone will be of paramount importance, as will the transition towards “wind down” as tax breaks and incentives inevitably need to be phased out, the hope being that capital flight will not occur as it did in Scotland in the 80s and to some extent other parts of the UK. Local councils will need to budget carefully in those areas where revenue will be lessened during the life of an Enterprise Zone and then carefully nurtured after the wind down in order to keep any new net jobs and encourage continued economic growth.

One of the most important factors will be the close proximity to the A19 with its new cross Tyne link and the availability of  The Port of Tyne as a major logistics facility, the partnerships arranged with other local authorities will need to be strong and effective in countering the claims of those on the north bank of the Tyne who may well have closer links to government than we do on the south side, although it ought to be appreciated that Cllr. Malcolm has been wisely networking with Conservative and Lib-Dem ministers for at least the past two years from a time when it became clear that Labour would have difficulty in winning an election under Gordon Brown’s leadership. His astute use of his business and political connections via lobbying firm Sovereign Strategy will have put him in a good place to promote South Tyneside as a place to do business, and a borough worthy of continued government support on whatever scale could be managed.

The Local Enterprise Partnership for the north east comprises members of seven councils covering areas of Durham, Tyne Wear, and Northumberland and it will be chaired by former Sage CEO Paul Walker, who after 16 years at the helm of the company was one of the longest serving CEOs of a FTSE100 listed company at the time of his departure, and it is important to recognise that the driving force behind this vehicle will have years of business and enterprise experience, rather than someone steeped in public sector service.

So now the difficult discussions need to begin on where we want an Enterprise Zone to be established, early suggestions include Wallsend with its green renewable energy plan, and land near the Nissan plant at Washington, I’m not sure if it is a requisite that one major zone needs to be created or whether it is possible to outline two or three separate areas that can be dovetailed together to provide a better mix of opportunities, in which case I’d like to see the Monkton business area in South Tyneside expanded to participate in the scheme. Wherever the LEP decides to locate the Enterprise Zone I believe that it is absolutely essential to look at the region’s infrastructure and quickly source more funding to improve the road networks that facilitate easy access to the A19 north and south of the Tyne to eradicate the “pinch points” that currently exist at Testo’s roundabout and the Silverlink, otherwise the eventual completion of the new Tyne Tunnel crossing will not provide as much relief as was first envisaged.

There is an opportunity being offered here for some sustained local economic growth which must not be missed, and our local council leaders need to be prepared to take bold and imaginative decisions which may shape the development of Tyneside for many years to come. They also need to be cognisant of the risks involved by the type of development allowed in the Enterprise Zone and how it impacts upon the livelihood of our existing town centres.

Do readers have any preferences or ideas about where and what type of development we would like to see from a north east Enterprise Zone?

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Balls up!

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Ed BallsJohnson resignation brings promotion for Ed “blinky” Balls.

The news of Alan Johnson’s resignation probably came as a shock for most of us, including the media and front line Labour politicians,  this morning both The Daily Telegraph and The Daily Mail, reveal that Johnson’s wife has had an alleged affair with the former Home Secretary’s close protection officer Paul Rice. Detective Constable Rice has currently been employed to protect the new Home Secretary Theresa May who was out of the country yesterday, and it is reported that he has been made the subject of enquiry by the Metropolitan Police Directorate of Professional Standards, which investigates complaints about conduct.

A Metropolitan Police statement said only that “certain matters regarding a constable were referred to the Directorate of Professional Standards”, adding “we are not in a position to discuss this matter any further”.

The messy outcome of the problems in Johnson’s personal life have been nothing short of a disaster for Labour’s new Leader Ed Miliband for a number of reasons, he has lost the “balance” in his Shadow Cabinet where Johnson was seen as the moderating communicator, even though his grasp of economic affairs appeared to be tenuous, the resulting promotion of Ed Balls to Shadow Chancellor brings back a man who was deliberately overlooked as Miliband tried to put some distance between himself and the outgoing Labour administration, the quick reshuffle of portfolios gave additional strength to the cohorts of Brown supporters, Miliband will also be seen as handing a communications “gift” to David Cameron and George Osborne who will gleefully spend months reiterating that Balls was one of the principle architects of Labour’s spend and burn economy.

All of a sudden the news agenda has shifted away from David Cameron and his difficulties with the NHS and the care of severely disabled children and on to the two “Edded”  hybrid which is charged with running the Opposition, Tories will make great play of the failed ambitions of Ed Balls to win the Labour Leadership election and of the weakness of Ed Miliband in having his hand forced in appointing a new Shadow Chancellor. With new appointments for “wee” Dougie Alexander, Ball’s wife Yvette Cooper, Tessa Jowell and Liam Byrne (the man who admitted they’d spent all of the money) his team becomes almost a replica of Labour’s last Cabinet, there appear to be only two missing, Gordon Brown and South Shields MP David Miliband.  This will not be lost on the coalition government who will point out the lack of new ideas and direction within the Labour Party, they are also likely to allude to the comparisons with Brown and Blair’s fractious relationship and try to develop the wedge that separates Ed Miliband and Ed Balls’ driving obsessions on economic policy.

Additionally this morning former Prime Minister Tony Blair is back in front of the Chilcot inquiry into the Iraq war where he will attempt to tell bits of the truth, the edited truth and nothing harmful to himself about the truth.

Oh yes the boys are definitely back in town today, spelling a total communications disaster for Miliband Minor as events and circumstance move totally outside of his control.

Of course they may be some truth in the old adage that it’s better to keep your friends close and your enemies even closer!

Guess who just got back today?
Them wild-eyed boys that had been away
Haven’t changed, haven’t much to say
But man, I still think them cats are crazy

ps – Did anyone else notice last night, just after the news of Ed Balls’ appointment that Sarah Brown sent a Tweet out from Gordon about economic policy? I guess he couldn’t manage to do it himself then and didn’t want to muddy the waters by making a press statement.

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David Miliband on food

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David Miliband, Colemans, South Shields

Welcome back to the MiliTV Channel, just one of a series of initiatives which I am considering to supplement my salary for being the MP for South Shields. I consider these part-time jobs as an essential duty as I do my bit to pay back part of the £1 trillion  debt that my colleagues in the last Labour government built up for you, (and yes I know, some of you are finding it difficult to get one job never mind two or three). Don’t know if you realised but it’s building up at the rate of over £7000 per second now because David Cameron and George Osborne cannot get to grips with controlling this wonderful legacy that we left for your children and grandchildren. Every employed person in the UK now owes over £34000 to pay for our wonderful thirteen years in office, and the LibCon coalition government now has to spend nearly £43 billion a year on interest charges alone, that’s more than it costs to run the Ministry of Defence!

Anyway, back to the TV show, this is Colmans in Ocean Road, South Shields’ most celebrated chippy, couldn’t make my mind up whether or not I should treat Bill Bryson to haddock and chips the other night and not sure if he likes mushy peas. I really ought to cut out these luxuries as I help to pay back the debt with extra jobs, but looking on the bright side, they do serve them up in great boxes which recycle really well.

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Budgetary cuts? Yes, there will need to be some!

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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.

Liam Halligan

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?

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Written by curly

December 27, 2010 at 8:49 pm