Thursday, 27 June 2013

Is George Osborne turning into Gordon Brown?


Yesterday's Comprehensive Spending Review announcements - and today's infrastructure plans - are a series of re-treads. Themes we've heard before, but hoped never to have our minds numbed by again; numbers we kind-of-guessed but were now confirmed; cuts that we knew were coming, but hoped somehow to avoid.

Well, now they're here. And now we've cut to the level of bone, we've going right through the bone. With a buzzsaw.

It's a pitiful performance from a Treasury team who should really know better, and it's hard - as a historian of modern economic policy - to know what could possibly trump it for mendacity, obfuscation, meanness and just egregious error. 1954-55, when Chancellor Rab Butler cut taxes for an election and then had to raise them again? 1972-73, when the Conservatives went for 'growth' and only ended up crashing the secondary banking system? 1974-75, when Labour's most left-wing programme ever looked set fair to completely bankrupt Britain itself? 1980-81, an episode of such eye-watering sado-monetarism that it destroyed a fifth of British industry? 1990-92, during which time Britain's membership of the European Exchange Rate Mechanism brought the UK to its knees?

Okay, I grant you - that's a lot of competition. But this episode of absurdism and mistake takes the biscuit, it really does. Our situation is dire. Remember that despite headlines that the double-dip recession of 2011-12 has been revised away, technically it hasn't, because output still dropped in the first quarter of 2012. And remember too that one reason why that recession now looks like an economy bumping along, rather than plunging into new depths, is that numerical revisions now make the crash of 2007-2008 look even worse than it did at the time. We're still miles behind the output that we managed then. When will we make up the gap? Your guess is as good as mine.

The Treasury's answer? Stalling public sector pay rises (many of which they don't have any power to intervene in anyway) and stopping benefit claimants getting any cash for the first seven days they're in need - a measure likely to cost the economy more in the long run than it is to save anything. Nasty? Certainly? Economically effective? No. These measures are as likely to stick as the £5bn of 'efficiency savings' we're promised - completely uncosted promises that will likely melt away like snow in spring.

Recall, also, that these cuts are only for one single year - 2015/16. After that stretch out only at least two more years of pain, full of absolutely unbelievable and ridiculous assumptions about any government's ability to slash public spending. Take a look at the numbers if you don't believe me. We're skittering along on the assumption that the 2010-2018 cuts to the Home Office budget - including police funding - will be half of everything it spends, and just under forty per cent of the Defence budget. That will not happen, because it cannot happen in a developed society. No-one believes these numbers. Not commentators on The Telegraph. And not this historian, either. The whole debacle of announcing endless fantasies-that-become-nightmarish-realities might not be the main reason why Britain's debt is getting harder to sell on the bond market: the coming end of monetary laxness in the US is much more significant. But it sure ain't helping.

But do you know who the Chancellor (above) sounds like most? Gordon Brown, that's who. That sounds like an absurd comparison on the face of it - the smooth-faced Mr Osborne has little personally in common with the grizzled old bruiser who inhabited No. 11 between 1997 and 2007 - but all the same hallmarks are there. There's the statistical sleight-of-hand: Osborne tried to tell us, yesterday and today, that the Government was putting '£300 billion' into investment. Except he wasn't announcing much new money at all - just putting dates, times and numbers on schemes he'd already announced many times before. That's an old Gordon trait, of course. And Mr Osborne was trying to palm off gross investment - numbers that don't take account of depreciating state assets - as net investment, the really significant number that most governments have relied on for decades. While further giving the Housing budget a really good kicking - not the way to get building and construction going, really.

There's too much playing to the gallery. Too many well-worn phrases we've heard a thousand times before. Too much party politics, even for this most partisan of Chancellors.

The public understand that we're still in a mess, and they want some directions out of it. What they don't want is a load of half truths and evasions, shoddily presented in a mass of not-very-impressive graphs and tables. But that's what they've got from the Comprehensive Spending Review - a crying shame at a time when voters are crying out for almost anyone to speak to them as if they're grown-ups.

No comments:

Post a Comment