Wednesday, 9 December 2009

A Financial Fairytale

Just in time for Christmas the government served up a fairytale today. It was a grim fairytale, a tale of dark menacing shadows over the small island of Great Britain and a sorcerer's apprentice trying desperately to look as though he knew what he was doing as the evil and manipulative sorcerer glowered over his shoulder.

Yes it was a Brown PBR all right. Don't believe the spin, the sorcerer was weaving his usual spells in an attempt to look better than he is. Just take a look at some of the statistical sleight of hand employed to make things look better than they are. Just take a look at the things not mentioned. Just take a look at the laughably optimistic growth figures for the year after to make the borrowing look slightly less horrendous. Remember we were told that that we were going to be growing again by now and not just growing but sprouting like a beanstalk. Instead we get a different fairytale.

It's always best after one of these Budgets/PBRs to take your time, absorb the detail and see past the spin and lies. This one is no different. Yes it was a political budget, yes it tried to press certain populist buttons but ultimately, such is the state of the economy and the public finances, it would have taken a sorcerer capable of making an elephant disappear to make this look good. It wasn't that they didn't try though. Darling even claimed that he was in a position of strength. How we laughed.

And then there were the assertions about the achievements of the government. Brown keeps telling us that the government's policies have saved 500,000 jobs. That's not a statistic that's a fairytale too. There is no way anyone can make such a claim but of course no way to prove or disprove it. It's classic Brown.

The only reason that the unemployment figures are not looking much worse is that employers and employees have had the good sense to adopt a more flexible approach during the recession. Employees have taken unpaid leave, worked a shorter week or accepted pay freezes. This of course is only in the private sector. The public sector has carried on as though all is fine.

And the same government that is boasting about saving jobs is adopting more measures that will destroy jobs with a hike in National Insurance contributions - a tax on jobs. What the hell?

This is a big tax rise. I suppose we should give credit to Darling that he has bitten the bullet and raised taxes to pay off that giant deficit. But he has done so with typical shiftiness. NI contributions don't look as bad but in fact they are much worse and will hit the vast majority of wage earners, not the high paid and the rich. This is a tax rise in all but name. Wouldn't it have been nice if they could have had the integrity to just call it what it is instead of trying to cast one of their spells in the hope that we don't notice?

The bankers are predictably hit with a tax for one year. I have no problem with that. It's what they deserve. Whether this government are in a position to point fingers is a moot point. And they have the power to simply tell the publicly owned banks not to pay bonuses until they have put their houses in order. Why not just do that?

Darling made a few half-hearted attempts to show he is serious about reducing borrowing but it doesn't amount to much. Even the tax rises will be fed into more spending including increases in pensions and benefits we can't afford but which of course the next government (unlikely to be Labour) will find hard to reverse. Fortunately the markets will have been expecting this. It is however a sad indictment of this government. Even after the worst recession on record and facing borrowing unseen before in peacetime, they still couldn't bring themselves to do the right thing for the country. They preferred to play politics and try to trap the opposition. It sums them up. It's almost as if they are preparing for opposition already. Here they say, reverse this if you dare and we'll be ready to complain about it when you do. It's scorched earth politics of the lowest and most cynical kind.

When we look back on this government, this PBR today will tell us all we need to know. They created a mess and did not have the integrity to admit it let alone address our problems. Let's hope the papers tomorrow reflect their cynicism, effrontery and selfishness so that the British electorate can make the sorcerer and his apprentice, not to mention the man who would be sorcerer's apprentice who is currently sulking on the front bench all disappear next summer.

No comments:

Post a Comment

All comments are published at the absolute discretion of the owner of this blog, but there is a general presumption towards publication. This is a free speech blog.