Wednesday, 9 December 2009

Brown's Greek Tragedy

It's the Pre Budget Report today. What should we be expecting? More fantasy finance? More wishful thinking? More predictions which unravel within hours let alone the six months or so we have left before an election?

There have been various stories coming out of Number 11 that Alistair Darling has been standing up to Gordon Brown and refusing to toe the line. Well, we shall see. We know that if Brown or Ed Balls were delivering this statement today it would be full of their dividing lines, massaged figures and some outright lies quite frankly. Darling will probably be more subtle but he will still want to keep as much of the truth from us as he can get away with. That's why we're not getting a proper spending review before the election.

The bottom line though is this: the government has to make cuts, savage cuts. They've been spinning that they will be able to find those cuts through efficiency savings but this is patent nonsense. The last Budget included cuts hidden away in the small print and if Darling wants to ring fence any budgets such as the usual suspects - health, schools etc then that just means that the cuts will be even more savage elsewhere. When the Tories proposed, stupidly, to ringfence health spending Brown labelled Cameron Mr 10 Per Cent. Various sources are saying that Labour are about to make the same pledge and so they too are pencilling in 10 % or worse for some departments. They won't admit it for now and we won't have a spending review before an election so that they don't have to.

But there are already noises coming from the outside world about the size of our budget deficit. Greece's credit rating has already been downgraded and is in big trouble with all kinds of internal strife on the cards. They may end up having cuts imposed on them if they head to the IMF or the EU for help. We are heading the same way unless the next government gets to grips with our debt problem fast.

The Tories had a publicity stunt (and a rather good one) yesterday projecting Labour's debt crisis on to Battersea Power Station. It is this that they need constantly to remind the country of. For all Labour's talk about taxing the rich, efficiency savings and even some limited cuts, they are still refusing to acknowledge the scale of the problem and the rapidly approaching crisis. Budgets are going to have to be cut and taxes increased for everyone. Their silly gimmick about legislating to cut the deficit is meaningless until they tell us how.

Brown has been talking up those efficiency savings again this week, posing as a man who is acknowledging the need for cuts but pretending he can do it painlessly. He can't and he knows he can't but it is his dividing line and so he will keep repeating the same nonsense, arguing that a £175 billion deficit can be eradicated by being careful about pens, paperclips and envelopes.

But even if it were true that he can deliver painless cuts, this is an acknowledgement that the man who used to pose as Prudence Brown has been frittering away our money these last 12 years. He is admitting it by now claiming that he will be able save billions by suddenly becoming more efficient. So why wasn't Prudence doing that all along? According to those figures of potential savings he has cost us £100 billion or so these last 12 years by not being on top of the public finances. It's no use now talking tough on salaries and waste in the public sector. Why did he let it get out of hand in the first place?

Even if Darling is less overtly political tomorrow than Brown would have been, this is still going to be about the election rather than a real setting out of spending and tax. Labour know they are not going to be in power to implement them and so their promises are as meaningful as those of the Lib Dems. What they can do and will do is paint themselves as being less nasty than the Tories, safe in the knowledge that they are not going to have to be the nasty party. They will just be able to watch and criticise. It is up to the Tories to tell us over and over again that spending cuts and tax rises next year are inevitable and they are Gordon Brown's cuts and tax rises. He spent the money we didn't have, he allowed the inefficiency and out of control quangocracy, he lost control of the public finances. The party is over and Brown is leaving someone else to clear up.

Britain is on the precipice of a Greek style Fiscal tragedy. The brooding figure of Gordon Brown is looming and will be looming over us all today and for the next few years, even once he has finally been evicted from Downing Street.

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