Tuesday, December 8, 2009

Ponderous Borrowing Revelations

I am not looking forward to tomorrow's Pre-Budget Report (PBR). I've read several Labour types describe it as a "political" event. They are quite open about it, even excited at the prospect, as can be seen from these tweets from @BevaniteEllie (Labour activist and henchperson of the party's Twitter Tsar Kerry McCarthy)

  • BevaniteEllie: RT @Jon2aylor: @BevaniteEllie I'm certainly excited, could be a massive week...PBR could reinvigorate the core.GB be bold I say #gameOn

    2 days ago

  • BevaniteEllie: "Labour MPs are expecting the PBR to me the most political for years"...is anyone else excited for the PBR? Is it worrying that I am?

    2 days ago 

This sums Labour up for me. They are motivated by the political fight, the petty point scoring but mostly, what's best for their party rather than the country.

So, we can look forward to a large dollop of bank bashing and promises to address the soaring budget deficit while not reducing the numbers of nurses, doctors, police, firemen, teachers... you know... people that people like. While on the other hand they will crush greedy bankers, pen pushing bureaucrats, managers and consultants - but not the medical kind of course.

Sounds great. But we all know these are politically motivated and dangerous lies. Bankers will find their way around the new bonus tax that will, no doubt, be announced tomorrow and the ones that don't will leave the country and we'll lose their (very considerable) tax contributions altogether, not to mention their talents to foreign, competitor companies. As for finding savings by getting rid of the other less popular types, Labour was responsible for the build up of their numbers to start off with and will do nothing significant to reduce them now. Well, not those employed in the public sector anyway. Gordon Brown didn't build up their numbers and that of millions of other public sector workers for nothing - he expects them to vote for him. I'm sure they have more sense, but they may well, rightfully, fear an incoming, reforming Tory government and that is what Gordon wants. 

We can also look forward to the "thick red lines" being drawn that will be designed to trap the Conservatives into unpopular counter policy positions. But people will see through these silly political games and be reminded of how much they hate this government and how much they need change.

UPDATE: Of course, this being spin city Labour, the PBR is being heavily leaked. The FT reports possible cuts of 14% in all departments but Health, Education and Police (surprise, surprise!) Oh, how I remember Labour ripping into the Tories for suggesting 10% cuts just a few months ago. You'll remember that both Labour and the Tories had the same plans for cuts (based on the previous budget predictions) but Gordon Brown insisted on lying about Labour's plans in order to differentiate Labour from their opponents, much to Alastair Darling's frustration at the time.

I tried to get a straight answer out of a few Labour MPs (including Kerry McCarthy) on Twitter at the time but the question was always avoided in favour of attacking the "evil Tories". Not surprising considering they knew what dodgy ground they were on. Now their cuts are deeper than planned (but still not nearly enough to placate the markets) I wonder if those MPs wished they'd embraced the Tory position at the time? At least they would seem more consistent now. In fact, we'll be told the Tories will "threaten the recovery" by cutting deeper and quicker. Well, at least that's a real policy argument we can have (and one Labour will lose). It's taken the best part of a year for Labour to get around to engaging in the budget deficit debate... and they say the Tories are policy light!

Another point to note is that their doesn't seem to be a commitment to protect defence spending. Yet another blow to the military covenant.


  1. Nice post!

    In some ways, I'm glad Labour are up for the political fight and are using the PBR as the first salvo leading to the May 6th general election. With the kicking that they've had over the last 2 years, for good reasons in the main, it would be easy for them to roll out of power, winded by the process.

    That's just not good for politics and not good for the country regardless of your political hue. We *need* a fight to Number 10.

    I do agree that it's lame politics to attack tax the inevitable groups that the PBR will focus on. Bankers are widely seen to be the cause of the recession and given their relatively small number, the reaction to windfall taxes will not amount to more than a dull squeak. It's their fault that they're an easy target. Lame politic it might be, but it's sensible, easy, politically risk-free but really not that valuable. Bankers and banks will find ways around the taxes, as the Turkish LIra loan scam.

    We must expect ring-fencing of funds and we must expect sweeping cuts. We, the public, must not get on our high horses about this and bemoan either party for making these tough decisions. Not making cuts is not an option - we're in a mess and we've got to get out and cuts is the only way to get there. We will have to experience a good few years of public sector austerity as a consequence of this recession and any political party that suggests otherwise are being disingenuous at best (and are lying in all probability)

    The Conservatives have spun out a line of activating effeciency savings as the reason why they won't have to make such hard cuts to spending. In recent days, one Home Office minister suggested likewise. This is dangerous idiocy: whilst I fully except that there must be some wastage out there, I'll bet all I have that it's not enough to service the interest on this years national debt, let alone any other year - let alone the debt itself. Cuts is the only way.

    JPs PBR

    End our involvement in the war in Iraq and Afghanistan. Reduce defence spend
    Get rid of PCSOs. Save 75% of the cash, invest 25% in proper policing
    Sell public sector, mostly MoD land - we have £250bn worth doing nothing
    Raise income tax on £100k earners and above (yes, they can well afford it)

    and for the long term...

    Go nuclear and invest in other sustainable technologies. And invest heavily. It will not only save UK plc significant money, this sector will be so important globally and those in the forefront will reap the rewards in the same way as Britain did during the Industrial Revolution. Net exporters of this intellectual property will win.

  2. Thanks for the comment Jon. They show you've thought more seriously about this PBR than many left wing political twitterers out there who see it as a purely party political event.

    I think there has been too much talk of the Conservatives being a shoe in at the next election. A hung parliament is a real possibility at the moment and I think they still have a lot to do to "seal the deal" as Alastair Campbell likes to point out. I just hope this sillyness around class doesn't combine with short term memory loss, should there be a slight economic recovery by the time of the next election, that could let a Government of incompetents and liers of the hook.

    And I agree whole heartedly that the solution to our budget deficit problems must be based on real spending cuts. I'm not sure any party is being completely straight with the public on this. At least the Tories are making threatening noises but they're too freightened of the tired old "nasty party" charge.

    I think you'll get your wish on increased taxes for those earning over 100k. Can't say I agree it's the best way to reduce the deficit as most people earning really big money can find ways around paying it that ususally involves reducing the overall intake of tax revenue by the Government. I'd have to be convinced that such an increase would deliver real revenue. Recent research shows the new 50% tax will deliver virtually no extra money at all!

    If anything, I'd like to see tax cuts for small businesses and assistence for those wishing to start up new businesses would help promote the recovery and utimately deliver more money in tax.

    Of course, that will cost, but we really need to sort out our prioritisations on tax and spend if we are to get this country back on track and make our economy one to be proud of again.