Monday, March 15, 2010

Double Deficit

Writing as one with an Achilles tendon injury, I would be very surprised to see David Beckham making a professional full recovery at his age, however talented his orthopedic surgeon. I wish him well of course but as one gets older, it's an injury that steadily degrades one's ability to run and if one does, then painful inflammation follows. Once upon a time, running marathons was a big part of my own life but with a damaged Achilles, jogging a mile without pain is a good result I find. Normally one ends up munching Neurofen if one tries it more than once in twenty-four hours!.

I had a curious and mildly unsettling experience on the train to London this morning, passing Whitstable. On what seems like the first day of spring and in the first carriage of the train, I saw a young and brilliantly coloured Pheasant flying on a course perpendicular to my own. At the last second, the bird noticed that the train was going to intersect its own flight path and tried to pull-up and skid sideways but Newtonian physics wasn't having any of it and the last thing I saw was its startled expression, followed by a loud thump on the carriage wall behind me. Poor bird!

Back in London, I was attending a District Councils' Network meeting at the Local Government Association, standing in for our own leader, Cllr Ezekiel, where the Conservative group of English council leaders, had a private briefing from Philip Hammond MP, Shadow Chief Secretary to the Trasury. I thought he made a very good argument for a change in government and for our own Conservative policies.

Now we know that nothing significant is going to come from the Budget we have to ask why? After all, we have spent £178 billion more than our tax revenues and Gordon Brown appears to believe that simple economic growth is enough to pick up the tab. After all, Labour policy to date has always been that someone else can pay the bills and rather than operating a deficit in the bad times and a surplus in the good years, we are now faced by the consequences of a double deficit, which is hardly a sign of fiscal prudence.

With an election only weeks away, Labour is going to leave its real cuts until later, so as not to frighten off the voters. The rises in National Insurance are a good example, because they won't appear until 2011, rather than April of this year.

The best analogy I can think of for all of this is a huge credit card bill. If you have £50,000 on your credit card and no easy way to pay it off, do you wait a year in denial and let the interest continue to build on that £50,000 or do you start making sensible economies now to try and bring the debt down as soon as possible? The Conservative view is that we start now and that we are clear by what is meant by 'front-line' services because starting earlier and offering a credible strategy will be less painful in the long term; particularly as the next government has to plan for the lifetime of the Parliament and calm the concerns of the markets in concert.

If you listen to Labour and the LibDems, you might imagine that the Conservatives plan savage cuts from day one of a new government and that simply isn't true. I recall from the time I did my paramedic training, a lecturer in a class on resuscitation, saying that 'Death is the worst possible form of ill-health' and the same can be said of our very sick economy. You do what you can to resuscitate it without making it worse and with a fiscal deficit of £178 billion, the patient is very sick indeed. Sitting on one's hands however and waiting for 2011 in the hope that business as - almost – usual – is the answer, doesn't appear credible or indeed honest to me.

Listening however, to the meeting of council leaders from across the country, Labour, Conservative and Liberal Democrat, something has to be done to address a huge range of problems which include public sector pensions to anti-social behavior and even concessionary fares. I've written here before that people still don't grasp the severity of the position this country now finds itself in because government, with a General Election to fight, is keeping the lid on the truth. Reading Newsweek magazine today, it reports: "The IMF says the UK needs the bigegst belt-tightening of EU economies, even ahead of Greece and Ireland."

In twelve months time, regardless of who wins on May 6th, people will start to understand what a £178 billion really means to their lives, their jobs, their services and ultimately their retirement prospects.

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