Thursday, October 21, 2010

As the dust settles

Nobody goes into politics to carry out the sort of measures which the Chancellor had to announce yesterday

Cuts on the scale which had to be made to clear up Labour's mess cannot be made without causing real pain to nearly everyone in society, including some of the less fortunate. That is no cause for celebration.

But the fact remains, that borrowing one pound in every four you spend is simply not possible. Governments have more flexibilty about how much they borrow and spend than an ordinary household but there are limits to what they can get away with for any length of time, and the fiscal position which this government inherited was way outside them.

There is no way that any responsible governnment - which the present one is, and the last one was not - could have avoided either heavy tax increases, severe spending cuts, or both.

Nobody will have liked most of the measures announced yesterday. But anyone who criticises them has to say what they would cut instead, of how they would raise taxes instead.

3 comments:

Anonymous said...

"But the fact remains, that borrowing one pound in every four you spend is simply not possible."

You're right - but people still have mortgages and are prepared to pay riduculous sums for houses.

Tim said...

Interesting, most interesting !

I've done a bit of digging and found the following:

1. Halting British involvement in the Afghanistan war would cut £5 billion a year.

2. Halting immigration would save Britain around £13 billion per year. This figure was calculated by Migrationwatch and is a compilation of the direct costs of benefits, housing, incarceration costs, schooling and what the immigrants then send home by way of financial repatriations.

3. Greatly pruning the £9.9 billion per year foreign aid budget. This figure is set to increase even more under ConDem plans to set foreign aid at 0.7 percent of Britain’s Gross National Income. It simply is not right to give countries like India, Singapore and Slovenia money when we face draconian cuts in Britain.

4.Halting British membership of the European Union which, according to estimates by the Bruges Group costs Britain at least £60.1 billion per year. According to the Bruges Group figures, this amount is made up as follows:

a) £28 billion for business to comply with EU regulations;

b) £17 billion of additional food costs resulting from the Common Agricultural Policy;

c) £3.3 billion - the value of the catch lost when the Common Fisheries Policy let other countries fish in our territorial waters;

d) £14.6 billion gross paid into the EU budget and other EU funds.

e) Try to get our hands on about £110 billion that is lost through tax evasion and tax avoidance.

There, nearly £200 billion and not a single Brit has to lose their job.

Chris Whiteside said...

Anonymous - yes, some do, and look at the trouble they get into.

Tim - DC does want to get out of Afganistan by the end of the parliament. Don't think I agree that any of the other figures are right.

The Migrationwatch figure might be near the mark if you took it as the gross cost of all cumulative immigration to date, without offsetting the positive contribution of those immigrants who have worked hard, paid tax, kept within the law and not imposed huge demands on the NHS. (And there are plenty of immigrants in that latter category.) Even if you stopped all immigration tomorrow you couldn't make that saving.

Foreign aid is a relatively small proportion of the UK budget and protecting it was an election promise. You can argue that we should not have made that promise - and there is an argument for that position - but we did, and I think politicians should honour as many of our promises as possible.

Not that we don't need to make sure the aid budget really helps those who most need it: you asked a good question a little while ago about whether we should be helping China, and someone in authority obviously reached a similar conclusion because the aid programme to China was cut last week.

Don't get me started on the EU!