The Budget: fix the roof while the sun is shining.

There is a very well argued piece by veteran economic commentator Hamish McRae about a modest improvement in the economic position for the Budget at

http://www.independent.co.uk/news/business/comment/hamish-mcrae/budget-2015-everythings-coming-up-roses-no-thanks-to-our-political-masters-10108574.html

Two particularly good quotes:

"Politics being politics, there will be stuff about the Chancellor “giving away” a pre-election bonus – an infuriating phrase, since he is not giving away anything, merely taking a bit less."

and

"But do we need to have a surplus, or would it be adequate (as Labour proposes) just to start reducing the national debt in relation to GDP? In other words, would it be good enough to have a deficit of, say, 2 per cent of GDP? That should be the key economic question at the election: how prudent should the next government be?"

"My judgement, for what it is worth, is that it would be safer to err on the side of prudence, because there is a strong probability of the next global recession happening during the next parliament. They seem to come at 10-year intervals and 2018 is not that far away."


I'd give a bit more credit to the improvements in the fundamentals to the Long Term Economic Plan than Hamish does. But he is dead right that economic winds can blow a bit better, as they are doing now, or blow a lot worse.

Which is why we need to work harder on getting the debt down, and Hamish is absolutely right to criticise Ed Balls for not moving fast enough or far enough to a position we can actually pay back some of the debt.

A major part of the mess we are still in is because the last Labour government didn't do enough to keep borrowing and debt down when Britain was last in a good economic position - as they saying goes, Brown and Balls didn't fix the roof while the sun was shining.

It is clear that Balls and Miliband still have not learned that lesson - which is why Britain absolutely cannot afford to risk letting Labour back into control of the economy until they do.

Comments

Jim said…
They went loopy. Yes there was a strong economy, and yes the times were good. Part of that of course was a bubble in housing and mis managed banks. However its during this climate (when things can only conceivably get worse, not better) that the desision was made to go into deficit. "to borrow now to invest" of course nothing was invested it was used to secure labour votes instead. Quite clever as its not bribing people with their own money, its bribing people with their future money or childrens money. I saw that at the time and remember well the "borrow to invest budget speech" I remember thinking this is going to end in tears. Thats why a government should never have that level of power, desisions on public spending can only be made by the public. The method of having a few people responsible for the desision but not carry the responsibility is foolish. To my mind brown, balls and blair should all be serving prison sentences now

Popular posts from this blog

Nick Herbert on his visit to flood hit areas of Cumbria

Quotes of the day 19th August 2020

Quote of the day 24th July 2020