Sunday 24 October 2010
Iron Chancellor
Imagine yourself lost, somewhere in rural England. You are on your way to London; your sat nav has broken down, and you are on a minor road without signs. The only way of getting back on course is to stop and ask one of the passing locals. A man approaches on a bike; you wind down your window. "London", he repeats, with a thoughtful expression on his face, "Sorry, you won't get to it from here."
This came to mind as I reflected on the panicked reactions in the aftermath of last week's spending review, in which George Osborne, the Chancellor of the Exchequer, announced £81billion in cuts in government spending. It was a bold move, an absolutely necessary move to deal with the massive hole in the public finances left by the fiscal irresponsibility of the previous administration, so bad it comes close, at least in my estimation, to being criminal.
Cuts are necessary; most people agree on that; even the Labour opposition agrees on that...at least I think they do. Alan Johnson, the Shadow Chancellor, better known to his many friends, including me, as Postman Pat, is a little bit lost when it comes to economic matters, rather a liability, given his brief. Cuts are necessary, just not now; it's not the right time. But as Norman Lamont, a former Chancellor, says in today's Sunday Telegraph, now is never the right time.
I'm a Tory, a particularly proud admission. I come from a family with a deep tradition in the Conservative Party. I wobbled slightly in my mid-teens, when, much to mother and father's horror, I formed an attachment to a chap with links to the Socialist Worker's Party or some such organisation; but that lasted all of about three weeks before the pendulum swung back to its natural stasis! I don't think I've ever been prouder to call myself a Tory than now, don't think I've ever been prouder of a politician than I am of George Osborne, whom I believe is the coming man, the man to watch, the man of the future. My admiration for our present Coalition between the Tories and the Liberal Democrats has also increased tremendously, set to become one of the most politically significant marriages in British history.
It was not always thus. I was disappointed and angered by the outcome of the General Election earlier this year, which saw the Conservatives emerge as the strongest party but still short of an overall majority, and that after the worst (no qualifications here; not one of the worst) administration in British history. I was convinced that the emerging coalition, the deal between David Cameron, the Conservative leader and now Prime Minister, and Nick Clegg, leader of the Liberal Democrats and now Deputy Prime Minister, had a limited life; that there was bound to be another election within a year. I no longer believe this to be so; I think the coalition will last for the duration of the Parliament. The marvellous thing is that it's not weak, not tied by shifty and evasive compromises. No, the spending review has shown that it is willing to accept the tough decisions, willing to accept temporary unpopularity in pursuit of the greater good.
But the driving force is George Osborne; he is the one to recognise how necessary this fiscal realism is before this country sank altogether in the rising floods of debt. The overgrown state, nurtured by Labour, will be tackled at source in a major cutback which will see the loss of some half a million jobs in four years. Foul, cry the unions, foul cry their bloated communist bosses: this is unfair, an attack on 'working' people. Oh but how mild it is compared to Cuba, a country they so admire, that is proposing to cut half a million state-sector jobs in six months, and that only as a first stage. That's the way to do it, comrades.
Yes, here is where we are, but how gentle, how realistic the Osborne cuts are. It's as well to remember that £81billion is a mere two years of interest payments on our current levels of debt. Postman Pat predicts disaster, the dreaded 'double dip' recession, but the Osborne squeeze will only reduce public spending from 48% of Gross Domestic Product (GDP) to 41% by 2014-15, still above the post-war average for this country. Spending, in other words, will fall to the same proportion of GDP as in 2007-8, the point when Mad Gordon Brown, then Chancellor, set out to prove that the economy was not based on boom and bust but bust and bust. Despite all of the dire warnings from the ghastly official opposition, at the the end of the of Osborne's four year cycle the government will still be spending more in real terms than when Labour came to power in 1997.
Yes, Osborne is my hero. I will only venture one small criticism. The tough decisions have been taken; the Guardian state will be pruned right back, the state where the most fatuous and unnecessary 'jobs n services' were created, a forest canopy that choked the life out of the real economy, the productive economy. Killing sacred cows, that's what Tories do best, not being in thrall to some past practice or favoured idea. Taking tough decisions inevitably means courting unpopularity. But some shibboleths still remain. The pledge to protect the National Health Service from cuts, made during the election, has been maintained. This, I believe, is a gross error for the reason that the NHS budget grew extravagantly under the previous administration, that it is an enormous waste of national resources at a time when we cannot afford such waste. This monster now accounts for a fifth of government spending, riper for cuts than any other government department. The same goes for special concessions to the elderly, who will continue to be given certain financial privileges, like free bus passes, whether they need them or not. Such provision, like the welfare budget in general, should be rigorously means tested. As The Economist quite rightly says, under the previous administration the state became more of a comfort blanket than a safety net.
I'm continually tempted to say that this government is rapidly shaping up to be one of the best Tory administrations in post-war history, perhaps even the best, better even than that of Margaret Thatcher, and that’s saying something! But it's not a Tory administration, it's a coalition. I think we are being protected to some degree, protected from the full truth about the public finances. How else does one explain the Liberal Democrat adherence to a policy of financial realism that goes against the happy-clappy politics they have pursued hitherto?
This is the road we have to take. These cuts, I believe, are only the beginning, an absolutely necessary way of ending the dreadful lie that prosperity can be built by borrowing and credit; it can't. As Lamont says, prosperity, real prosperity, has to be earned, not borrowed. Yes, there is a gamble here, but a necessary gamble. It's to be hoped that the British people, in a deeply rooted entrepreneurial spirit, will rise to the challenge, not descend into mass hysteria, like the French, or murderous mass hysteria, like the Greeks. Coming from nowhere, never before having held senior public office, George Osborne is shaping up as a great politician and a great Chancellor. Yes, I'm proud to be a Tory.
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ReplyDeleteWas this the same Lord Stockton who wittered on about the miners and the family silver? :-)) On this whole question, Adam, we shall just have to retire to our respective corners.
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ReplyDeleteTime moves on, Toryism moves on; it always has. This is 2010 not 1940; 1940 will never come again. New times, new problems, new solutions.
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ReplyDeleteNo, they could not! And George is certainly not stuck in the 1980s. :-)
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ReplyDeleteAdam, please forgive me but I have no interest at all in your grumpy old man act. I'm truly sorry that your life is so bleak that you forever want to vanish back to some mythical arcadia, presided over by Disraeli or Powell or whoever. This is my time and this is my England. It may not be your England but it is most assuredly not a 'cesspit.' Yes, we are literally mad as a nation, mad at seeing that tiresome quote trotted out ad nauseum. At least I am. :-)
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ReplyDeleteI haven't seen any cuts yet, Ana, just a half-hearted swipe at the rate of increase in government spending. Real, actual spending cuts must be imposed to reduce the deficit, and then the debt. That means reducing spending in every area, until the crisis is over, and completely eliminating government involvement in many activities. Many people who have come to expect public largesse will be disappointed. Well, boo hoo. Delay only allows the crisis to grow worse.
ReplyDeleteCalvin, it's going to take a time to work through, but I completely agree with you about the cuts. This is a serious business and it needs serious people.
ReplyDeleteBNP
ReplyDeleteHarold Macmillan's stock seems to be rising right now, but I can recall the early 1960s when he was widely ridiculed - unfairly, perhaps.
ReplyDeleteI, too, was shocked by the defence cuts. Why we are increasing foreign aid at a time when we are dismantling our defences, I am at a loss to understand.
If Argentina wanted to walk into the Falklands, there would be nothing to stop them.
It is the failure to maintain an independent navy that is my main reason for having doubts about this government.
Are they intending to merge our armed forces into some sort of EU defence force? I hope not. Christopher Booker thinks that was the idea all along.
I agree almost wholeheartedly with this piece; certainly about the calibre of Osborne as chancellor.
ReplyDeleteI'm glad you broke off links with the SWP chap: you'd be terrifying as a trotskyist! Intelligence plus articulacy plus extremism is the most fearful combination!
My one concern about Osborne is more a reflection on the role of the media and spin and public relations in politics today than any reflection on his capabilities, and it is this; he needs to cultivate a slightly sterner persona, like the cane-wielding headmaster who assures the thug of the fourth form that what he is about to do will hurt him more than it will hurt the lad.
During the cuts speech, at times, he gave the appearance of being almost jocular.
Now, it may not be fair to point that out; but tied in with the the general class and other societal prejudices that are regarded as acceptable by much of our media (give that man a Yorkshire or Scottish accent and the problem would be almost solved), and the real short-term suffering/need for readjustment that will be experienced by some (many) people as a result of the cuts, and the power of image, I do think it's something he needs to watch, when he has time free from dealing with more substantive matters.
I am all for spin-free politics (and how refreshing it is to have a government of substance and propriety: this is the first British government of my adult life that I can enthuisastically support); but I don't wish to see a chancellor of great talent destroyed by the media for trifling reasons. Maybe David Cameron should lend him some of his miserabilst indie music ;).
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ReplyDeleteThe government has taken the much-needed steps to solve this deficit. The most vulnerable will always suffer (or they will not be the most vulnerable ones).
ReplyDeleteDavid, there is really no comparison between now and 1982. Then the Falklands were weakly garrisoned and Argentina had a very different kind of government, one that is never likely to return.
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ReplyDeleteDominic, that might work!
ReplyDeleteAdam, the Messerschmitt 109s, the Panzer Mark IVs, the E-boats, and the SS assault units have gone and gone forever, no more likely to return than Napoleon’s Old Guard. The world is changing.
ReplyDeleteRehan, indeed it has. I wish we could avoid pain in the process, but we can't.
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ReplyDeleteNo, Adam, there is no new Hitler on the way. Honestly, you are best to keep that sort of silly prediction to yourself. :-)
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ReplyDeleteThe world has changed, Adam, Europe has changed; history moves on. In 1920 Germany had lost a war, and it hadn't. The country had a massive sense of grievance, fertile ground for political extremism. 1920 was the year of the Kapp Putsch, a slight indication of things to come. The political situation in Germany, in Europe in general, is so different now. There will never again be a March on Rome, a Munich Putsch or a Machtergreifung. Your perceptions are so narrow, much more antique Roman than Danish. :-)
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ReplyDeletecarthago delenda est
ReplyDeleteThe clash of civilizations and the remaking of world order. By Samuel p. Huntington is supposed to be a good read ,I have to look into it .
ReplyDeleteBy the way Argentina has ambitions to develope nuclear weapons.
ReplyDeletePerhaps I'm too late to contribute to this discussion, but I suggest that we are in a period similar to the mid-19th Century, where events are hard to interpret because the world is undergoing a great change. In that time, between the fall of Napoleon and the Franco-Prussian War, monarchies were being replaced by nations and the nature and causes of conflict were transformed from family squabbles writ large, to much more ferocious wars over trade, resources, and spheres of influence. Then came the great religious struggle between authoritarianism and democracy that dominated the world stage from 1917 to 1990. The next ideological struggle beginning to emerge is between corporatism and nationalism. The contest is already underway, but the opponents have not yet exposed their true faces. They will, and that struggle may be more ruthless and destructive than any we have yet seen - an undeclared war conducted on a global scale in the cities and communities where we all live. It is time to decide what you really believe, whom you can trust, and how to comport yourself when the hard choices must be made.
ReplyDeleteAdam, there are no crystal balls but it is still possible to read the runes, or the traces, as I have said. It's a question of political and strategic realism; more particularly of fiscal realism. We can't keep up ruinous levels of expenditure 'just in case.' I repeat my essential point: the little corporals are a thing of the past.
ReplyDeleteAnthony, that's the first I've heard of it! Thanks for that reference.
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ReplyDeleteCalvin, that's a complex and intriguing scenario, one that would require a far different strategic and political response.
ReplyDelete@ Calvin: NWO ( the new world order )
ReplyDeleteThe Falklands issue is not about some desolate windswept islands with a few flock of sheep.The offshore oil reserves are the key .
ReplyDeleteAnthony, so far they have proved quite elusive. Besides, given what happened in the relatively tranquil waters of the Gulf just think of the far greater potential for disaster in the South Atlantic.
ReplyDeleteTechnology will improve but untill it does who holds title to the Real Estate?
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