Tomorrow night's leaders'' debate will focus on the economy, and will presumably concentrate on the allegedly "huge" public deficit, the cuts in public services allegedly necessary to to put it right, and how soon these cuts should be implemented.
For an analysis which shows that the public finances are by no means in the parlous state that all the parties and most of the commentators seem to think, please see my post "The Economic 'Crisis' " of 8th April. It is also worth mentioning that the present is not a bad time to have a larger than normal public debt, as abnormally low interest rates make it less expensive to service.
The abandonment of the "like for like" replacement of Trident, the compulsory National Identity Card and expensive and ineffective national data-base schemes will obviously achieve welcome economies, but most cuts in public services will adversely affect those most dependent on the state, the poor and the vulnerable. Like, I suspect, most people, I have little faith in the idea that economies can be achieved by "efficiency savings" which do not affect front line services.
What speaks volumes about the parlous state , not of our economy but of our politics, is that no party has the courage to propose the alternative method of cutting current borrowing: that of raising taxes. The standard rate of income tax is 20% and it seems to be assumed that civilisation as we know it will end at any thought of its being raised. But as recently as the 19880s the rate was 25% and life seemed to trundle along quite comfortably for the overwhelming majority.
The adverse effects of the recession have fallen disproportionately on a minority of the population. Most of us are still comfortably off, and some with large mortgages have gained considerably as a result of low rates of interest. It is shameful that no party has the courage to say that, rather than cutting public services, the well heeled should, once the recovery is assured, be asked to pay a little more.
It is infantile to pretend that we can have Scandinavian levels of public services with American levels of tax. Someone should have the courage to say so
Wednesday, 28 April 2010
The Solution that Dare Not Speak its Name
Posted by Peter Wrigley at 05:57
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