Sunday, April 11, 2010

Telling it like it is

The Institute of Economic Affairs (IEA) spells out quite clearly the problem facing the next government.
New research by the IEA shows that if the Conservatives or other parties do not want to raise taxes they must cut spending plans by £167bn. Today’s report Cutting public spending by £167bn: A modest but necessary aim sets out clearly the scale of the problem the UK is facing.

Mark Littlewood, Director General of the Institute of Economic Affairs, said:

“In the lead up to the political parties launching their manifestos this finding should be a massive wake up call.”

“So far we have heard precious little from any party about the need to make substantial cuts. However, if they aren’t intending to cut public spending dramatically they must be planning on raising taxes. Perhaps unsurprisingly we are yet to hear this acknowledgement from any politicians.”

“The current arguments about whether or not to raise National Insurance by a fraction are grossly inadequate. Cuts must be made far in excess of ‘efficiency savings’ or the British public may be sure their taxes will rise substantially to plug the gap..."

£167 billion is, roughly speaking, the amount of money that the government has had to borrow in the last year. That's £167,000,000,000 or one hundred and sixty seven thousand million pounds.

This simply cannot go on and, as Guido so neatly illustrated, the Tories have so far committed to concrete cuts of a derisory £6 billion.

The people of this country are going to have to realise that the molly-coddling and pampering that they have become used to, in this great social democracy that they've embraced, is going to have to end. It. Is. Not. Sustainable.

And there's no point is trying to delay the pain: it is going to have to end and, if not now, then very soon.


Shug Niggurath said...

They only like sustainability when it applies to fish and trees mate.

mutleythedog said...

It doesnt seem very likely to happen does it?

Roger Thornhill said...

The sooner the country realises it is not a rich country at the moment, the faster the solution can be put into practice. I suspect we are unlikey to be a rich country for decades and are likely to be bounced into some Totalitarian economic and kleptocratic regional or global regime.

James Higham said...

The elephant in the room consistently being ignored by the Tories [and other leaders] is the EU factor and the IMF debt. If we don't extract ourselves within one year, we're not going to be talking cuts, we're going to be talking meltdown.

That is no godawful conspiracy theory. Nor is it witterings. It is something which will dwarf this faux election bleating.

John East said...

The election is an irrelevance. Some time, post 6th May, our economy will collapse with failed Treasury sales, soaring interest rates, and a depressionary slump enforced by the IMF.

Whether Osborne, Darling, Cable or Balls is Chancellor their response will be the same. They will "share the pain", reluctantly accept the "unforeseen austerity" and shaft all of us.

So what would be the point in them telling the truth today? It would be a sure-fire election loser to whoever is honest, so why be honest? This devious election strategy is of course a tribute to the stupidity and ignorance of the average voter.

Without the voter stupidity, the Tories wouldn’t be forced to lie.

ukipwebmaster said...

Telling it really like it is:

Ed Butt said...

It gets worse. The big idea to rebuild the economy is Blair's knowledge economy rehashed. It seems we are going to find ways to "monetize intellectual property" created by University Research.

So people will pay us for finding out if you feed mice lard and take away their exercise wheel they get fatter - one University scientific research project we reported on Boggart Blog recently.

Budgie said...

Assume the debt is £1.5 trillion (some say more, some less). The repayment costs (using the FSA mortgage calculator) is £120 billion pounds every year for 20 years (at 5% interest).

This reduces our economy by 30% more than the recent recession, but each and every year for 20 years. None of the three main parties are remotely facing up to this. It is eerie. They seem as wilfully blind to it as they were to the housing boom.

Daniel1979 said...

Hear hear. Get cutting before we're sunk.