Saturday, 12 June 2010

What are Labour trying to do?

The following is another great article by Jeff Randell.

Gordon Brown's henchmen are rewriting history as we sink into the red

The time for delusion, deceit and dodgy economic figures is over, argues Jeff Randall

If you're less than thrilled by today's World Cup kick-off, fret not: there's plenty of good sport elsewhere on television. My
favourite viewing is the disintegration of Labour's effort to defend its disgraceful record in government. Some of the own goals are spectacular. Faced with the horror of exclusion from office for at least five years, former ministers – Ed Balls, Lord Myners and others – are rewriting their part in the policies that helped wreck the United Kingdom's social cohesion and financial solidity. Not since Shaggy's chart-topping song It Wasn't Me have we been treated to such a ridiculous attempt at self-exculpation.

With the repudiation of Gordon Brown's locust years by his erstwhile henchmen gathering pace, it can be only a matter of time before one of the candidates to replace him calls for a truth and reconciliation commission. This is what happens when tyranny crumbles. Until then, Liam Byrne, the Clunking Fist's most visible apologist, has been given the task of justifying his old boss's budgetary vandalism. The poor chap looks like a second-hand car salesman, trying to persuade furious customers that the dodgy vehicles they bought were, in fact, perfectly sound motors at the time of purchase.

For those of us who flagged up the debilitating consequences of unbridled immigration and debt accumulation, the sound of Mr Balls and Lord Myners admitting Labour's mistakes (while shifting blame to others), produces a barely resistible urge to seek justice via the ducking stool. Any feeling of vindication is swamped by anger and disgust.

In communities that have been destabilised by the arrival of large numbers of non-English-speaking people, many with alien cultures, a change of government will not improve their circumstances. The deleterious impact on over-stretched social services, housing and jobs cannot easily be reversed. Mr Balls's Damascene conversion merely adds insult to injury.

As for the nation's finances, only now, it seems, when the damage has been done, and the taxpayer condemned to long-term impoverishment, do we hear voices of dissent emerging from the ranks of Labour's placemen. One month after Mr Brown threatened to cling on to power as the senior partner in a soi-disant Progressive Alliance, Lord Myners is recanting.

This week, he told fellow peers: "There is nothing progressive about a government who consistently spend more than they can raise in taxation, and certainly nothing progressive that endows generations to come with the liabilities incurred by the current generation. There will need to be significant cuts in public expenditure, but there is considerable waste in public expenditure. I have seen that in my own experience as a minister."

Hallelujah, brother! A sinner has seen the light. As disavowals go, this was a doozy. What a shame, though, that the former City minister did not have the courage to spill the beans during the election campaign. For a so-called hard man, who carried out the "drive-by shooting" of Sir Fred Goodwin, Lord Myners was a disappointingly soft touch for his master in Number 10.

Having cloaked themselves in the theatrical robes of Keynesianism, Mr Brown's little helpers must endure the humiliation of being stripped naked by events. As any serious student of Keynes will tell you, the great man believed that governments could help smooth the peaks and troughs of cyclical capitalism. He did not advocate management by profligacy or the indulgence of budget deficits at the peak of a boom.

That Mr Brown chose to do this (his average budget deficit from 2003-2007 was £32 billion) began the stockpiling of massive debts. Made strikingly worse by the downturn, Britain's borrowings are £770 billion and on course to hit £1.4 trillion by 2014-15. At that point, our annual interest bill will be £70 billion, about twice what we currently commit to defence.

First, we deluded ourselves into believing that maximum expenditure was an acceptable norm. Then, as the madness took hold, the norm became the minimum. Finally, with alarm bells ringing and red lights flashing, came the Cabinet's bogus cover of "supporting the economy" through recession.

As Jeffrey Sachs, director of Columbia University's Earth Institute, explained in the Financial Times: "The relevant fact was that the UK [and others]... had over-borrowed for a decade, so a decline in consumption after 2007 was not an anomaly to be fought but an adjustment to be accepted." Such a change in mindset was always going to be resisted by a government that was hooked on the political attractiveness of spending increases, even though it had, in effect, run out of money. To square the circle and calm lenders, Alistair Darling was required to make ever more heroic assumptions about GDP growth. This was the fairy dust which, when sprinkled on the nation's accounts, would magic away our debt crisis.

The philosopher Roger Scruton in his latest book, The Uses of Pessimism, warns against "the danger of false hope" from "unscrupulous optimists" who dismiss constraints, while flogging gravity-defying solutions. Mr Darling and his Treasury team, Mr Balls, Yvette Cooper, and the hapless Mr Byrne fit that description with alarming precision.

Much as Labour's claim about the economic benefits of immigration was demolished by a House of Lords select committee, its growth forecasts are likely to be challenged by the independent Office for Budget Responsibility. If, as expected, the new OBR downgrades our growth prospects from Mr Darling's fantasy 3.5 per cent to the City's consensus of about 2 per cent, the outlook for the deficit becomes even worse.

This is why Fitch, the ratings agency, describes the UK's fiscal challenge as "formidable" and calls for deficit reduction at a more aggressive pace than set out in the Labour's last Budget. "The rise in public debt ratios since 2008 is faster than any other AAA-rated sovereign [nation] and the primary balance adjustment required to stabilise debt is amongst the highest of advanced countries."

Remember this when the Opposition squeals, as it surely will, on June 22, the day of George Osborne's emergency Budget. The Coalition did not create the extraordinary mess that must be tackled now if we are to avoid locking our children and theirs into a lifetime of paying off this burden. Existing taxes will go up and new ones will be introduced. But too few taxes are not the problem. Labour expected tax income of £541 billion this year, £54 billion more than in 2005, the year of its third election victory. The trouble is, expenditure in that time rocketed from £519 billion to £704 billion. Only through a robust shrinking of the state's outlay can sanity be restored.
As Professor Sachs concludes: "There are no short-term miracles, only the threat of more bubbles if we pursue economic illusions. To rebuild our economies, the watchword must be investment rather than stimulus."

I would love to see Jeff Randell interview, or interrogate, Gordon Brown on what he did as chancellor and as PM. What a bloodbath that would be.

Labour over the last 13 years have screwed this country up so badly that the Labour leadership candidates, and ex ministers are saying, ' It wasn't me.' and 'I tried to say something, but was over ruled.'


How can we ever trust what they say, if they're trying to wriggle out of the responsibility they have for putting this country in the state it is now in.

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