How Labour might be doing us a favour
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In his analysis of last week’s pre-budget report David Smith suggested in the Sunday Times that the real Alistair Darling “got lost somewhere in Downing Street, diverted by a lot of Brown and a load of Balls”.
He wasn’t the first to suggest that the PBR got compromised by those more concerned with getting re-elected than with reducing the UK’s debt mountain but you have to admire him for the eloquent way he implied that the PBR in its final form was a piece of electioneering. Put simply, it bashed the bankers and actually increased public spending marginally, leaving any hardcore measures for the budget itself.
Given this, it’s hardly surprising that the general election is now likely to be called on March 25 rather than on May 6 – that way there’s a chance that the electorate won’t realise the error of its ways until incoming chancellor Ed Balls does a Brian Lenihan on the UK economy and will squeeze middle earners until their pips squeak.
I mention Lenihan in the context of Balls because on the same day that our current chancellor was being mealy mouthed about everything except taxing toffs, Ireland’s finance minister boldly announced a swathe of eye watering measures designed to cut public spending by almost £4bn. The Irish government wants to prevent its fiscal deficit growing above 12% of GDP which is roughly where the UK’s deficit currently stands.
Of course when you look at the reaction to Ireland’s austerity budget, with the prospect of a public sector winter of discontent, you can well understand why Messrs Brown, Balls and Darling avoided the hair shirt stuff in the PBR and might want to postpone a reality check until after a general election.
As The Guardian so aptly stated last Friday:”Thirty-one years after Britain was convulsed by industrial disputes involving refuse collectors, lorry drivers and NHS ancillary staff, history is set to repeat itself as a fragile coalition government in Dublin feels the full force of union anger over a £4bn spending squeeze.”
But political deception on the part of the UK government may be doing all of us a favour if it brings an election forward by even a couple of months. With the current regime almost at the end of its term if not its tether, we desperately need to resolve the shape of financial regulation for the next five years, have a sustainable plan to reduce the national debt, and establish a meaningful housing policy across all tenures in which the banks and building societies can play a positive role.
Whether the electorate opts for a new broom or for the people who got us in the current mess is in a sense immaterial because the options open to a new government will be very narrow but at the very least we can hope to have some sense of direction.
