Borrowing
If we had a responsible opposition, then rather than taking a few cheap and inaccurate shots at George Osborne over public borrowing, they would be putting forward ideas to reduce it and giving him a very hard time.
I think the present team of treasury ministers have done very well to manage the deficit down under incredibly difficult political and economic circumstances. I see no possibility whatsoever of the forthcoming election producing an alternative team who might cut the deficit faster than George Osborne will.
But I think this country would be in a far better position if we had a real debate about how to cut the deficit faster instead of a few cheap gibes about it from people who anyone with two working brain cells knows would actually cut borrowing more slowly.
Let nobody forget that the last government left behind a position where they were spending four pounds for every three pounds of revenue and a national debt on course to hit £1.2 trillion.
When you get into as big a mess as the coalition inherited, cutting the deficit by a third takes an enormous effort, and that has been achieved. But it is not enough. We need to eliminate the deficit and start paying back Gordon Brown's debts, so that the burden of interest on the national debt goes back to merely being a large millstone round the taxpayer's neck rather than, as it is at the moment, a serious threat to the nation's financial stability.
It says something terrifying about the Labour party that Ed Balls is the nearest thing they have to a voice of sanity - some of his recent comments suggest that he has some idea how serious a problem the deficit is. Yet his proposals to reduce it, though quite inadequate, were still roundly attacked by many in his own party for going too far.
As for Miliband, his criticisms of the government for supposedly making the deficit worse by failing to address the needs of working people were the exact opposite of the truth. Insofar as the bad news on next year's borrowing is something which can be blamed on the government - and a lot of it was due to the fall in the price of oil, which can't - it was because many of the 1.8 million new jobs which the economy has created since 2010 were in the salary range which has been taken out of taxation by the government's rise in the personal allowance - a tax cut for working people rather than the rich.
If the present government had followed the precedent which Mr Miliband's mentor Gordon Brown set when he was in power and doubled the tax rate for the lowest paid taxpayers (which they did by scrapping the 10p tax rate) then tax revenues might have been much more buoyant -as long as it didn't discourage people from working.
Which, of course, it might well have done. That's why I think increasing tax thresholds so that the lowest paid workers are taken right out of income tax was the right thing to do.
But we have to look very hard for ways to cut the deficit further, and any politician who tells the voters it is going to be easy is wrong.
I think the present team of treasury ministers have done very well to manage the deficit down under incredibly difficult political and economic circumstances. I see no possibility whatsoever of the forthcoming election producing an alternative team who might cut the deficit faster than George Osborne will.
But I think this country would be in a far better position if we had a real debate about how to cut the deficit faster instead of a few cheap gibes about it from people who anyone with two working brain cells knows would actually cut borrowing more slowly.
Let nobody forget that the last government left behind a position where they were spending four pounds for every three pounds of revenue and a national debt on course to hit £1.2 trillion.
When you get into as big a mess as the coalition inherited, cutting the deficit by a third takes an enormous effort, and that has been achieved. But it is not enough. We need to eliminate the deficit and start paying back Gordon Brown's debts, so that the burden of interest on the national debt goes back to merely being a large millstone round the taxpayer's neck rather than, as it is at the moment, a serious threat to the nation's financial stability.
It says something terrifying about the Labour party that Ed Balls is the nearest thing they have to a voice of sanity - some of his recent comments suggest that he has some idea how serious a problem the deficit is. Yet his proposals to reduce it, though quite inadequate, were still roundly attacked by many in his own party for going too far.
As for Miliband, his criticisms of the government for supposedly making the deficit worse by failing to address the needs of working people were the exact opposite of the truth. Insofar as the bad news on next year's borrowing is something which can be blamed on the government - and a lot of it was due to the fall in the price of oil, which can't - it was because many of the 1.8 million new jobs which the economy has created since 2010 were in the salary range which has been taken out of taxation by the government's rise in the personal allowance - a tax cut for working people rather than the rich.
If the present government had followed the precedent which Mr Miliband's mentor Gordon Brown set when he was in power and doubled the tax rate for the lowest paid taxpayers (which they did by scrapping the 10p tax rate) then tax revenues might have been much more buoyant -as long as it didn't discourage people from working.
Which, of course, it might well have done. That's why I think increasing tax thresholds so that the lowest paid workers are taken right out of income tax was the right thing to do.
But we have to look very hard for ways to cut the deficit further, and any politician who tells the voters it is going to be easy is wrong.
Comments
well, i have been trying to do that for quite a long time now, granted now i am persuing a sideline on the European Union, which i could not resist, but, I wont have it said I have not been trying.
i will have to paraphrase as i dont really remember the wording or even the episode of Yes Minister, but its basically thats not the way public spending works, You dont work out what you need and how much you need to fund it, sir. Instead you campaign and grab as much as you can, then figure out what you are going to spend it on"
there is the problem, to end the deficit tomorrow, then its pretty simple really, there is this much money, when its gone, its gone, now how shall we spend it?
its pretty simple stuff lets say I earn £1000 a month. so i need say £300 to pay the mortage. thats important.
I need £200 to pay all the heating, cooking, and running the place bills.
I need £200 to spend on food.
I have 300 left, well his this and this would be nice, but i really need to pay off that credit card bill so there is another £100 gone, now i must get to work, hmm, £35 will do that if i use the train, oh wait we are getting low here, perhaps this and that that would be nice are not going to happen........
That is how to not only cut, but eliminate a deficit, set your budget to use what you have, dont set a budget and then try to raise the money to fund it.
During all the reaction to the Autumn Statement yesterday I didn't spot it if a single one of all the Labour, UKIP, nationalist or Green politicians who appeared on the box came out with a single credible suggestion to cut the deficit faster - one of the Labour people mentioned the Mansion Tax but they can't count that as deficit reduction as they plan to spend the proceeds on the NHS.
Every one of them took the easy road of scoring points on missed targets and most complained about not enough money on something, but not one politician said they should be reducing the deficit faster (though one or two journalists & commentators not seeking election did.)
Indeed several of the journalists and commentators remarked, in some cases with regret, that there was "no downside" for George Osborne on missing the borrowing targets because none of the other parties is proposing to do more to cut the deficit.
It produced exactly the feeling you were describing the other day Jim - I'm fed up with Earth, are there any openings on that mission to colonise Mars?