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Thursday, 2 October 2014

Here we go Again! Overloading the Handcart to Hell.

Next week the Liberal Democrat Conference will be reported extensively in the Guardian and given polite but cynical coverage from most of the rest of the British media; but now that the Tories have gone back to work the putative electoral promises made by the major parties are clear.

They are deeply depressing. They represent mainstream politics as it has dragged down Britain since the 1951 election. The parties are competing to offer different kinds of handout to those who they reckon are most likely to vote for them.

Yesterday the Tories specifically promised £7 billion of tax cuts which are obviously unfunded, and it is difficult to believe that the national budget can afford the additional spending that they promise to make on the National Health Service. These additions to the 'spending' side of the national finances sit alongside the Chancellor of the Exchequer's implicit promise to cut public spending across the board by another £30 billion. It is not at all clear what public services can be maintained, even in an exiguous form, after such a savage pruning. Public life and social services can only become more nasty and brutish under such a regime: and the preordained failure of the nonsense about the 'big society' means that the Tories can not pretend in the next election that voluntary social action can compensate for the withdrawal of public services.

Labour has done no better: they too talk about reducing the government's annual overspend while promising that both the state [insofar as it will continue to be an employer and a donor of benefits] and private employers will have to pay their staff more with no hint that their productivity will be increased. If productivity genuinely increases in line with pay awards, there will be fewer jobs available from a given fund in the employer's budget: unemployment must increase.

Whoever wins the 2015 election will be the real loser. The economy has not got the resilience to afford the handouts promised by either leading party. The deficit will grow and the creditworthiness of the country will decline [whether in or out of the EU] so the terms on which the government can borrow will become punitive; with the consequence that enforced spending cuts will be massive and arbitrary.

Can nothing be done?

Not by the present crop of politicians working within their current context and mindset.

If politics could change, how should policy change?

The country should follow German experience, and create a Grand Coalition of the major parties, Instead of cash giveaways to individuals the government should give the people who work bonds in a National Development Fund, to become negotiable when the economy has been recalibrated. This would be a development of the Post-War Credits that were issued to people during the Second World War. The allocation of bonds should broadly reflect the individual's input of effort to the implementation of the National Plan. Billions of poundsworth of housing and infrastructure projects can be 'shovel ready' within weeks: while thousands of entrepreneurial businesses can be enabled to access capital to fund their growth. All that is needed are the wit and the will to do these things.

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