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Sunday, 5 March 2017

Britain's 2017 Budget: another wasted opportunity

Britain is in the throes of pre-Budget lobbying, which is always the most intense when a new Chancellor of the Exchequer is about to make his first foray into the minefield of alternative choices. Mr Hammond knows, as all his advisers [both official and self-appointed] know, that Mrs May's Conservatives cannot possibly produce a fair and practicable programme to convert Britain into a truly dynamic economy in a rapidly changing world. So he has already made it clear that he does not feel it appropriate to indulge in any massive shift from a policy of spending cuts to one of massive borrowing and spending [such as President Trump has been suggesting for the USA]. The Chancellor has accepted the Treasury Economists' advice that 'fiscal discipline' must be maintained.

Thus the Budget will provide for worsening conditions in the health service, in a period when more expensive treatments are becoming available that could be applied to more people with serious illnesses. It will cut real-terms funding for the armed services, for the police and for local authorities, with some token of mitigation for social care. It will make this country a more unhealthy and unsafe place that it easily could be.

The Chancellor will not try to get the country out of the contract to pay insane prices for electricity from the highly problematic Hinckley Point power station, with an underpinning guarantee from the Treasury; though this will do nothing to cause the French to argue less strenuously for Britain to be punished for Brexit. He will do nothing to change the situation by which foreign investors will be given privileged terms for building and operating an unnecessary HS2 railway. He will make no substantive investment in a 'northern powerhouse' that could really begin to rectify the vandalism of Thatcherite industrial destruction. He will announce no measure seriously to protect British innovations from being captured by alien investors. He will do nothing to mitigate [or to tax] the flow of tribute from British consumers to foreign owners of privatised utilities.

Thus the social and financial deprivation of the British people will be intensified; while indirect taxes on the bulk of the population will be increased. The Economists do not see these derelictions as direct causes of 'populism', which will grow as lower real living standards generate more dissatisfaction with the 'Remoaner' elite.

It is to be expected, nevertheless, that some steps will be announced - at minimum cost, of course - to address some of the most conspicuous social failures. So, as the bus services that have enabled pensioners to get to the shops and to the doctors are cut, a few more minutes per day will be allocated to the more serious cases in need of social care. For a day or two after the presentation of the Budget, the Conservative-supporting press will present these trivia as major advances: then the mood of general gloom will intensify. The Chancellor will refer extensively to the 'underlying strength' of the economy, and to the supposedly robust 'growth' that is still being recorded year on year: the illusory nature of these claims will extensively be examined in coming blogs.

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