subtitle

...a blog by Richard Flowers

Wednesday, August 18, 2010

Day 3517: One Hundred Days

Wednesday:


So, we made it to one hundred days, a hundred days of the Coalition being "about to be torn apart any moment" by appalled soggy Liberal Democrats or outraged nutter-wing Conservatories.

We'll do the scores on the doors in a moment, but before that I suppose the most significant thing about the Coalition turning 100 days old is the number of commentators who flatly insisted we'd never get here at all.

Have you noticed that recently? The "life expectancy" of the government has quietly dropped from political discussion. It's become accepted that, actually, this government is going to stick.

Only the more frothy Hard Labour chatteristas still insist that the Coalition will split and there'll be another election by Christmas. And that only make them look silly.

If anyone looks likely to split these days, it's Hard Labour, as Leftist Dinosaurs and Blairite War-criminals fall out over whether their Party exists to go for power or for protest. But then "splitting" has always been the obsession of the political left – that explains BOTH the huffing and puffing of that old hypocrit Lord Prescott of Flummery AND the other wise curious (but surprising to absolutely no one) decision of Mr Sunny Disposition of the Labour Conspiracy website to rejoin Hard Labour now that he can have his ideological purity and eat it. (I assume that the renaming of Mr Sunny's website-cum-fabulous-media-career will be happening soon.)

Hard Labour's response to the Coalition continues to be nothing so much more than a particularly pyrotechnic TEMPER TANTRUM. I suppose we should have seen it coming: Hard Labour just turned thirteen, so of course their cry has become, to quote Mr Harry Enfield's Kevin the Teenager: "IT'S NOT FAIR!!!!"

Anyway, enough about them; how have the Liberal Democrat/Conservative Coalition Government been doing?

It's all a bit of a WORK-IN-PROGRESS so far. The Government didn't "hit the ground running" with flashy but ultimately meaningless policy announcements the way Lord Blairimort did in 1997. Policies have to be worked out and talked out in Cabinet before being set in train. But that's a GOOD thing.

Civil Liberties

The big wins here are obvious: I.D.iot cards already on their way out; detention of children of asylum seekers to go as well; and a long-overdue review of Great Britain's draconian libel laws under way.

On the downside, none of this new openness stopped Mayor Bojo the Clown from summarily ejecting the protest camp from Parliament Square. Because nothing says Civil Liberties like seeing the police sweep up a bunch of hippies in a dawn raid. Rolls button eyes.

Marks out of ten: 8

Benefits

Obviously it doesn't HELP that Mr Iain Drunken Swerve has all the personal warmth and charisma of the CHILD CATCHER from "Chitty Chitty Bang Bang", but the IDEA of simplifying and improving the benefit system, helping make work worthwhile, is surely a GOOD ONE.

On the other fluffy foot, does it HAVE to come with all the accusatory language about spongers and malingerers? It's tough enough surviving on benefits without all the language of BLAME. In a recession it's not your fault you're out of work; if you're unwell it's not your fault you're out of work.

Mind you, and I'm sure it is very wrong of me, but I don't half BRISTLE when I hear Hard Labour mouthpieces endlessly repeating the mantra: "cuts in Housing Benefit will hit the very worst off". Housing benefit is to be cut to no more than Four Hundred a WEEK. £400 a week is £20,800 a year and that seems to ME to be quite a lot BETTER OFF than "the very worst off". I'm APPALLED at how LOW benefits are in a RICH and MODERN country like Great Britain, but I do find it a tad difficult to defend the notion of protecting benefits of households receiving over TWENTY GRAND, when there are people getting far, far less than that.

Marks out of ten: 6

Schools

Mr Michael Borogove has made a series of entertainingly spectacular badword-ups in his announcements demonstrating arrogance and ignorance almost up to Hard Labour standards. Building Schools for the Future – Mr Frown's almost MARXIST plan to rebuild every school in the country regardless of need – was a stupid scheme that wasted loads of money on crazy red-tape bureaucracy and it needed ending. But the way it was announced – one huge "look at the size of my chopper" cut – was more about playing to the right-wing audience than doing the sensible thing, and OBVIOUSLY it backfired horribly. If they had STARTED by saying "we want to invest in the schools that really NEED repairs" then it needn't have looked like a sequence of embarrassing climb downs.

And, because the Schools Secretary clearly HASN'T learned his lesson, he then followed this up by ramming his Free Schools policy through Parliament.

There are clearly two reasons for the urgency: number one, they remember Lord Blairimort's big failure and so would rather make actual mistakes by doing stuff that goes wrong than make the mistake of not actually doing anything at all; number two, it's the only policy the Conservatories actually HAD so they need it up and running quick sharp to prove to their own that they're getting something out of this Coalition.

Marks out of ten: 3

Health

Enormous reform of the health service came as something of a surprise to everyone, especially after all Mr Balloon's talk of preserving and ring-fencing. Having said that, getting better value for money, especially when it's so MUCH money, and moving control over finances closer to the front line are both laudable aims.

Opening the NHS up to more private services tends to cause unreasoning PANIC among some people, but really it's one of those things where it should be judged on PRAGMATIC grounds – does it provide a BETTER service for the patient? What are the sanctions if it DOESN’T? Hard Labour's Private Finance Initiative schemes, for example, are BAD because they buy these big "prestige" projects that you're then stuck with, tying up your health spending in long, inflexible contracts, with no way to get out of it if it's not what people actually NEED.

Marks out of ten: 5

Political Reform

If we had a POUND for every time a Hard Labour politician squawked "gerrymandering", we would… well, still be a trillion pounds short of paying off the debts they ran up, but could probably afford a few more sticky buns! The two-faced nature of Hard Labour is never more revealed than through their behaviour over the electoral reform: given a choice between keeping a manifesto promise and opposing a bill that might reduce their unfair advantage they… choose the unprincipled selfish status quo option every time. "Progressive" my big fluffy behind.

There's a huge presumption going around that we are BOUND to lose the referendum on AV. But if that's TRUE, then why are the anti-reform crowd making so much fuss about the date? Clearly THEY don't think that a "no" vote is in the bag, so why should we?

People aren't stupid (no matter what the patronising "the electorate can't cope with more than putting an 'X' in a box" protestors might say). People know that our electoral system is badly broken and in need of change.

And the very fact that we've reached "Day 100" without the sky falling in (unless you count Mr Roger Stavro Murdoch suing Skype over use of the word "Sky") PROVES that all that GUFF about coalitions being "weak governments" was a load of scare-mongering nonsense.

So there's everything to play for.

And the voting referendum – while important – isn't the be-all-and-end-all of the reform agenda. Quietly, Captain Clegg has been getting on with fixing the Parliamentary term. Hard Labour made such a FUSS about the 55% rule that it's going to be INCREASED to a proper SUPER-MAJORITY. And don't forget we'll be getting an elected Upper Chamber.

Marks out of ten: 7

Foreign Policy

Days without illegally invading another country: 100 and counting.

The Captain managed to describe the invasion of Iraq AS illegal from the despatch box. An event that everyone described as a GAFFE. As though SAYING it was somehow more embarrassing than being CULPABLE for it – stares hard at the Hard Labour front bench.

Anyway, Mr Balloon very kindly then went out to show what REAL foreign policy gaffes look like by going to Turkey to insult Israel, to India to insult Pakistan and to America to insult, er, Great Britain.

So far, though, Mr Vague has surprised everyone by being moderately sensible, and sensibly moderate, in talks with Europe. And of course, EVERYONE in Europe LURVES Captain Clegg, because he can apologise for Mr Balloon to them in all of their own languages.

Marks out of ten: 9

The BIGGIE: The Economy

Well, the Chancer of the Exchequer continues to display all the financial skill and economic insight of a man who's only ever played with CHOCOLATE COINS before, but at least it seems clear that he's willing to accept a Werther's Original and sit on the lap of King Mervyn of the Bank of England from time to time.

And we all know that Mr Danny "Champion of the World" Alexander is in charge of the REAL adding up. (With a bit of help from Mr David Outlaw for the really hard bits.)

(The loss of Mr David remains an early BLOW to the Coalition, particularly given the RESPECT he had among Conservatories, which helped bind the Treasury team, and the Parties together. But apparently, Mr Danny is building quite a reputation for himself too, which is good.)

Big picture, though: the Government's economic strategy is both ADMIRABLE and ALARMING at the same time.

There is no denying that the Coalitions agreement to cut spending THIS year is a GAMBLE that might see more people losing their jobs.

The important thing to recognise is that there were, indeed are, TWO threats facing the British economy this year, not just one.

The FIRST threat is the infamous DOUBLE DIP recession that we keep hearing about – the threat that economic growth could falter and fail again.

One of Hard Labour's biggest bluffs is that Government spending is somehow a motor for the economy. This is not true. Only work done by actual PEOPLE generates money. The Government takes money OUT of the economy, moves it around, and puts it back again. That is all it can do.

Government BORROWING can add money to the economy in the SHORT TERM. But in the LONG TERM even that takes more money out than it puts in, because the borrowing has to be repaid with INTEREST.

Hard Labour want you to believe, NEED you believe that government spending powers the economy because they want you to be DEPENDENT on the Government. They may even believe it themselves, because of their belief that the Government is always good and always right (so long as it's a Labour Government, anyway).

The truth is that the Government CAN keep the economy going in the SHORT TERM by borrowing, using that injection of cash into the economy to keep growth going artificially – usually by building things, capital projects, yes, those school buildings that Mr Borogove kind of hasn't actually cancelled – keeping people in employment, maintaining skills, until the private sector can get up off the canvass and take up the slack again. The longer you leave it, the more the private sector has got to grow on its own because it's going to have the Government's borrowing (and interest!) taken back out again.

Labour's sort of argument is that the private economy is not yet off the canvass, and we should still be in the artificial life-support phase of the economy.

(I say "sort of" argument because they would be more convincing if they hadn't been borrowing and borrowing and borrowing to artificially inflate the economy ever since they got re-elected in 2001.)

That is sort of what happened under Queen Maggie back at the start of the Eighties. The Government withdrew its artificial support from areas where there was no private industry, or not enough anyway, and caused enormous misery and hardship. That is what people are so frightened of happening again.

But you CAN'T just KEEP borrowing to keep inflating the economy forever. Or rather you CAN, because that is exactly what Mr Frown did, but when the money runs out you get a TITANIC belly flop, like the one we just saw.

Which brings us to the SECOND risk facing the economy, which is a much BIGGER and SCARIER risk. That is the danger, the very real danger, that the international money markets – the people from whom Mr Frown and Mr Alistair Dalek went a borrowed a TRILLION pounds – might start to see us as a BAD RISK investment.

That is why controlling debt has become especially pressingly urgent since the money-market crisis that struck Greece in the weekend before our General Election.

At the moment, Great Britain can borrow money from the rest of the world (and indeed from our own banks – and a lot of the Government's debt is to British pension funds) for long periods at relatively low interest rates because we've got a pretty good record. Long periods means ten to fifteen years. Low rates means 3% to 3½%. And I say "pretty good"; Japan can borrow at rates as low as ½% because their economic record is immaculate (and remember that, whenever Hard Labour politicos make excuses about Japan having three times as much debt as we do; yes, that's true, but it cost them SEVEN times less to borrow it. In other words, we should have HALF our current level of borrowing to be in the same ball park as Japan.)

If the money markets start to DOUBT Great Britain's economic stability, they will do two things: they will SHORTEN the amount of time they will loan us the money and they will INCREASE the interest that we have to pay. The first will cut Government investment in long term projects. (You are less likely to borrow ten million pounds to build a hospital that will last ten years if you're going to have to repay the cash in five.) The second will just cut Government spending full stop, because there will be less money to spend on anything other than the interest. And as interest rates go up, so does inflation, which undermines growth. And the economy becomes uncompetitive so exports dry up and we earn even less money.

Which of course is what Mr Major Minor managed to achieve in the Nineteen Nineties.

So, basically, you have a choice between the recession of the early Eighties or the recession of the early Nineties.

And like Mr Odysseus navigating between the MONSTER and the WHIRLPOOL, the Government is trying to plot a course that won't see us SUNK. Mr Odysseus choose to err towards the MONSTER, because SHE would only eat SOME of his crew, whereas the WHIRLPOOL would overwhelm them all. Maybe that is why the Government is taking the RISK of the double dip recession, because that way, even if the risk goes badly, fewer people – we hope – will suffer than if the entire economy went under. Again.


Hard Labour, who had, remember, spent MORE than they raised in taxes in every single year since the 2001 General Election (yes, that was seven years BEFORE the Credit Crunch) had a plan to CONTINUE spending more that they raised in tax for every single year of the next Parliament too.

The Conservatories ALWAYS said that they wanted to cut further and faster than Hard Labour, to do the difficult task of getting the Government's spending under control again.

Hard Labour continue to throw up the allegation that the Conservatories have an IDEOLOGICAL desire to see a smaller State. Actually, they say this like it's automatically a BAD THING, and of course it is NOT – the State should have to JUSTIFY all of the things that it does and there's plenty that a good Liberal would say it should not be doing.

But the allegation is not even TRUE.

The aim of the Coalition cuts is no more than to reduce the State to THE SIZE THAT WE ARE ABLE TO PAY FOR. Hard Labour's own DOGMATIC insistence that the State not only CAN do everything but that it SHOULD do everything – right down to micro-managing your diet, exercise, television viewing and bedroom habits – meant spending more and more money – money we just didn't HAVE – doing more and more controlling of ordinary people. Whether they wanted it or not.

The plan – for this Parliament – is only to reduce the size of the State to the size of the money that we've got, so we're not adding to the debt mountain.

And the plan is for the WHOLE Parliament.

There will be SOME cuts this year, but this year's cuts will be comparatively modest, less than one pounds in a hundred. Most of the tax rises and spending cuts will not begin to take place until next year.

That's twelve to eighteen months AFTER we came out of the recession. If we go back into recession this year, it WON'T be because of the cuts, or even the VAT rise. It will be because the economy was too weak after years of Hard Labour; it will be because of pre-emptive and unnecessary action by unions and protest groups; and it will be because of FEAR and PANIC driven by people talking the country down and the possibility of recession up, possibly for their own political reasons.

Don't let Labour get you in a SPIN about this; don't confuse the ANNOUNCEMENT of the cuts with the IMPLEMENTATION of the cuts: the Government is NOT going to lop a quarter of spending off THIS YEAR. The Government is NOT going to make cuts "between" 25% and 40% - departments have been asked to LOOK at cuts of up to 40% for two very good reasons: if they have to look at 40% you can be sure they'll be serious about the first 25%, and if we can cut a little more in some departments then we can cut a little LESS in others, maybe education, maybe housing.

The cuts in spending for departments will AVERAGE OUT at 25% less in 2015 than Labour would have spent. Or rather were going to spend, before they announced their own cuts. The forty-four billion in cuts that were going to be SOMEWHERE – they won't say where, except that it’s nowhere the Coalition look at cutting.

So that's 25% less than Labour on average in five years time. EXCEPT in Health and International Development, because those areas are protected. And when you think about the very VERY worst off, those are the people who the International Development budget is spent on. Protecting the International Development budget means that Great Britain CAN give help when its needed, like it's needed now in the Pakistan floods.



People have been somehow SURPRISED that the Liberal Democrats have not just GONE ALONG with these budget plans, but enthusiastically SUPPORTED them. Weren't we supposed to be to the left of Hard Labour?

Well in the first place, HELLO! We had Master Gideon raise the personal allowance by a thousand pounds and pay for it by increasing the capital gains tax paid mostly by rich folks. That's a more genuine and honest redistribution than any of the complicated Tax Credit schemes and wheezes that Mr Frown and Hard Labour came up with.

And in the second place, did you not notice how we'd been BEGGING the Government to try and get borrowing under control since at least 2003. Nevermind the "Orange Book Tendency", that was so-called lefty, Mr Dr Saint Vince "the Power" Cable.

What we said all along was this: thanks to Mr Frown's TOTAL FAILURE OF MANAGEMENT, the economy got blown to bits by the Credit Crunch, a catastrophe to which we were UNIQUELY vulnerable because Mr Frown based so much of our economic well-being on the FICTION of a PERPETUAL winning streak in the gambling dens of the City of London, resulting in a longest recession in, well, ever, so the economy is now in a FRAGILE and DELICATE state.

Therefore, even thought we WANT to bring down the frankly INSANE level of Government debt, we want to do it CAUTIOUSLY, and based on ADVICE and EVIDENCE.

Our JUDGEMENT, without sight of the books – or Father Dick Byrne's now notorious note that "there's no money left", oh hahaha – was to cut more slowly.

Then Greece happened. Then we had the advice from the Governor of the Bank of England. Then we saw the state of the government's finances.

The facts changed. So we changed our minds.

We were persuaded that the whirlpool was more of a threat than the monster.

(Actually, that sums up the whole decision to for a Coalition with the Tories rather than the Labour Party.)

Marks out of ten: in the balance.


In fact, the REAL fact about a hundred days is… that it's just TOO EARLY to tell.

Most of people's fears are so far JUST fears – there's a bit of EXPECTATION MANAGEMENT by our side going on (tell you it's going to be badword diabolical and then hope that things are only dreadful) and a LOT of whipping up by Hard Labour (prophesying doom and disaster just like the completely DIDN'T before THEY ran the economy into the ground, remember!).

This Government is planning to last for one THOUSAND, eight HUNDRED and twenty four day, so this is just the first 5%. There's another 95% to go, with a lot of REAL pain to get through, but hopefully some light at the other end of the tunnel.

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2 comments:

Andrew Hickey said...

Bravo! Wonderful piece. On the areas where I have A Clue, your analysis agrees with mine absolutely, and on the areas where I don't (economics and schools) it at least makes more sense than most of the nonsense I've read on those subjects...

anna said...

How would you rate the issue of Trident replacement so far? Seems that although the Conservatives are committed to replacing it they've realised there’s not enough money.