That’s an advertisement on TV by an insurance company that promises “not to make a drama our of a crisis.”
With yesterday’s spending review, and the reporting of it by their supporting media, our government seem determined to do the opposite. We are warned of “the biggest UK slump in 300 years” and there is much talk of “hard decisions “ and “tough choices.”
Let’s be clear.
There is a public health crisis. It is very serious. Over 50 000 people have died because of it. We need to make every possible personal sacrifice (such as having a nuclear family Christmas, minimising social mixing and travel, isolating ourselves if we have been in contact with someone with the virus, etc) to help contain it.
There is no economic crisis.
True, there has had to be, and will continue to be, extra public expenditure both to deal with the crisis (buying PPE, setting up a Test and Trace system, caring for those infected) and compensating those whose normal economic activity has had to be suspended. It is a shame that neither has been done very efficiently - indeed billions of pound have been wasted and had the government responsible been even marginally to the left there would have been uproar.
However, the rise in public debt to around 100% of national income (the debt to GDP ratio) is probably inevitable.
And such a level debt is perfectly manageable, as explained in an earlier post.
It is not a crisis.
In 1945, at the end of the war, the government’s debt was not 100% of GDP but more like two and a half times GDP - around 250%.
It remained at above 100% until 1963.
In that period successive governments introduced free milk for all schoolchildren, universal secondary education with new schools to facilitate it; provided free higher education along with maintenance grants; created the National Health Service (which included free dentistry ); took key industries such as the railways, water, electricity, and gas into public ownership and compensated the previous owners; increased the capacity of the building industry to build 300 000 houses per year, mostly for affordable rents; introduced family allowances; and still paid off 60% of the debt.
Even while the debt level was around 100% the 1960s were great fun, as already explained in that earlier post. It was the time of “swinging Britain,.” Even though Philip Larkin may have exaggerated its potency:
Sexual intercourse began
In nineteen sixty-three
(which was rather late for me) -
Between the end of the "Chatterley" ban
And the Beatles' first LP.
- it was a good time to be alive
But not for the first time, the Conservative government now puts into practice the dictum attributed to Winston Churchill; “Never let a good crisis go to waste.”
Back in 2008/9, when we had a world financial crisis, as soon as the Tories got hold of the government in 2010 they put the brakes on the Brown/Darling creative response which had started a recovery and introduced “austerity” in order to implement their dogma of a smaller, less caring , state.
They managed to convince the public that his was necessary, so that, while those who caused of the financial crisis got off scot free the poorest in our society paid the price.
Now that we have a genuine, and expensive, public health crisis, the talk of “difficult decisions” and “hard economic choices” is being bandied around to soften us up for the next stage of the process.
it is the poorest who will be expected to pay the price. The public service pay freeze will affect
some of the lowest paid workers who have actually most exposed to the dangers
of the virus and kept the health and hygiene service going. The £20 extra for Universal credit is to be
discontinued. Both of these, and other
cuts , will take demand out of the economy just a the time when it is most
needed to generate a revival. The decision to cut our Oversees Aid Budget by over £4bn at the very time when the poorest in the world need help most is a source of both self harm and national shame.
It is not a mater of that, like the Bourbons, the Tories have learned nothing from their past experiences. They know exactly what they are doing: using the public expenditure necessary to deal with a genuine health crisis to further their aim of an even more minimalist state, isolated from the EU, in which the haves flourish and the weakest go to the wall.