Tuesday, September 15, 2009

The Final Cut is The Deepest

So there you have it, the 'C' word in all its glory, revealed by Gordon himself at today's TUC conference.

These promised 'Cuts' will impact so-called "Low-priority' Government services rather than "Frontline" services, so that's OK then, except that one Trades Union leader, the RMT's stalwart warrior, Bob Crow, one of my best clients, 'Bless him', was less than generous about the Prime Minister's speech and his failure to enlarge on what "Low priority" services might actually be.


So cuts in public spending will be the order of the day regardless of which party you happen to support, it's just a matter of where such cuts will occur. The Treasury forecasts that public borrowing will reach £175 billion, or 12 per cent of GDP, in the current financial year. In a recession, public borrowing increases as tax revenues fall and welfare spending rises. In a downturn as intense as this one, there is a strong theoretical case for the Government to borrow still more, to compensate for the shortfall in demand. This will only make things more painful for us all in the short-term at least.

The Times reports that Gordon Brown now invokes the Great Depression as a reason for not tightening fiscal policy prematurely. And much of the spending increase planned for next year, of around £30 billion, will be accounted for by higher social security spending and interest payments on government debt. Neither of these can be substantially reduced till economic growth returns. It comments that "Loose fiscal policy carries its own risks. No one knows how far a rapid accumulation of public debt might undermine financial confidence. But to tolerate wide deficits now, financial markets need to be reassured that there will be offsetting tax rises and spending cuts when the economy recovers."

So what does this mean to you and me in real terms? I've been remarking for some time on this weblog that the true impact of the financial train hitting the buffers hasn't been felt yet. We saw the collapse of the private sector and it's only now that we will start to see the heavier rear carriages of the train, the public finances, come off the rails and overturn as the budgets for 2010 onward are scrutinised and prepared.

Any new Government is going to be very unpopular indeed, whether it be this one or more likely an incoming Conservative administration with new ideas on how to balance the books. Options are very limited and local Government as central Government's proxy tax collector and agent for essential local services has even less room to manoever as funding dries up completely or is reduced to a trickle.

In seven months or so people will face a choice; do things differently and more prudently with a far greater emphasis on local accountability or maintain the status quo with the same discredited hybrid, Stalinist, Old, New Labour characters that landed the country in the broken shambolic mess in which it now finds itself. I suspect that the British people are fed-up with a decade of being conned and are aching for change and so, like many readers, I'm looking forward to seeing the country's final judgement on Gordon Brown at the polls next year as collectively, they start to feel the bitter winds of the very same cuts he mentioned for the first time today.

4 comments:

Richard Card said...

You have consistently done the right thing with regard to presenting a worrying economic prognosis.

My beef with you is that I would like you to publish your RMR Record. Because I want to see whether you could have known the "Players" I am naming today in a Common Law Information to the Justices and to the Chief constable.

As you know I am against pedantic codes of conduct and censorship. We have laws to deal with defammation.

I have probably taken more flak on Thanet blogs than even you Simon.

But I do not consider it hypocrisy on my part now to object to the latest Thanet blogging development.

Venal blog humour

I am quite happy to be called "The Irritating Bloke" and so forth. It is just ad hominem and I carry on being unto my own self true.

But now I have looked at the Clown, with all his prodigious if wasted talent, and stopped laughing.

DrM. said...

Richard, it isn't appropriate to start publishing such personal details, on the internet simply because someone is curious about who I may or may not have known. I ask you, where would it stop!?

To be honest, I doubt I knew any of the people you may have been interested in. My RMR unit was at Tooley St in South London but that was over 30 years ago.

I very nearly followed a regular career path and was selected for such at CTCRM but other opportunities arose when I was offered a place at a University in the States and the rest is history!

Richard Card said...

Thanks Simon. I will send you a copy of the CL Information. Interest goes back to 1976.

Ian Duncan Smith was very effective on radio today. (Better off by not working ... issues). He rose to power too soon. Bit like Hague.

The party I support is Popular Alliance headed by a former Royal Marine.

Where I will do ju jitsu tonight is a Church hall. The pastor and his folks there are doing pensioner lunches there for £3 a head (3 course) main course from carvery.

I will be giving them allotment surplus tonight ... marrows, onions, damsons, kohl rabi, runner beans and cabbage. About 1 cwt all told.

Before you go off on one that I am straying off thread ? The pastor is as aware of the probable times ahead as you. Public spending cuts and power cuts beyond that unless we get our act together.

Anonymous said...

And of course there in lies the bug!

You are offered a place at a University in America. Which one studying what?

You make huge announcements on your speaker for hire sites together with your background which goes from an English degree in English/Education, to one in IT.

But there is not link. That is what makes people question you.

You have gone from a degree in England in one subject to a Doctorate from America in a totally different field. And even in America, you must have had the equivilant degree in order to study for a Doctorate.

So that is not me or people being annoying or obtuse. You have made these claims, and therefore it is only fair that as a person in the Cabinet of a Council, that you be above board and honest.

If you have done the wonderful things that you have stated at length, then proving them and thus shutting up your detractors should be easy. And also of great advantage to your political ambitions.

The internet allows people to find out things they never could before; so why not in the old adadge; put up!