Britannia Radio

I have just read the text of Gordon Brown's speech to the CBI today 
and have not yet recovered.  It is the most bombastic turgid drivel 
full of pomposity and little else that I've had the misfortune to 
have to read - on your behalf! .  I do NOT propose to bore readers by 
putting it all out but if you want to you, you can read it for 
yourself on:-
http://www.politicshome.com/landing.aspx#4717

Meanwhile here is some sound commonsense from Janet Daly .  She has 
cottoned on to the salient fact that it is only by cutting out the 
macro-waste in government expenditure (not just tinkering at the 
edges) that we have any hope of surviving the crisis as a viable 21st 
century major economy.  She also champions the two changes in 
government policy which I favour above others (as readers may have 
noticed!)
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TELEGRAPH   24.11.08
Alistair Darling must cut whole state, not just tax pennies
By Janet Daley


We appear to be in the midst of an epidemic of honesty. Politicians 
of every persuasion are tripping over one another to tell us, with 
brutal, terrifying candour, just how horrible our economic situation 
is and how much worse it is going to get.

Alistair Darling will, according to reliable reports, join in the 
chorus this afternoon by assuring the nation that whatever tax relief 
he may be offering in the short term will be strictly temporary: this 
bizarre message seems destined to dampen (if not kill outright) the 
incentive for people to spend, thus neatly taking the stimulus out of 
his "economic stimulus" package.

The Chancellor is clearly prepared to risk undermining the economic 
logic of his proposals for the sake of political gain. He, and 
presumably Gordon Brown, are so determined to neutralise the 
Conservative line of attack about a future "tax bombshell" (having 
traumatic memories of the damage done to them by that phrase in the 
general election of 1992) that they are actually planning to disarm 
it by agreeing with it.

Yes, indeed, they will say, don't be lulled into any false optimism - 
your taxes are going to go right back up in no time at all. We might 
lower high street prices for a nanosecond by reducing the rate of VAT 
to lure you into some momentary extravagance that will increase your 
personal debt, but as soon as conditions permit, we will claw it all 
back and then some.

So as well as having to pay for that spending spree that we enticed 
you to engage in, you'll be clobbered by the Treasury as well - maybe 
as soon as next year. Yes sir, the other guys are quite right - 
that's how it is. The last thing we would want to do is mislead you. 
Happy Christmas!

What strikes me as most depressing about this war of attrition, in 
which all the major parties seem determined to instill the maximum 
amount of anxiety (into a crisis in which a failure of confidence is 
the most critical factor), is the absence of any desire to learn more 
far-reaching lessons.

Why does "honesty", as interpreted by virtually all politicians, have 
to amount to resignation, to an acceptance of the present 
arrangements in which government spends a huge proportion of GDP 
running things it should not be running at all: providing services 
inefficiently, managing public projects incompetently, and 
administering areas of social and communal life with the kind of 
insensitivity for which agencies of the state are notorious?

At the moment, I accept that government must carry on pouring buckets 
of water on a forest fire - however hopeless and futile that may be. 
The bank bail-outs have not worked and I do not think the public 
spending bonanza will work either, but it is morally imperative that 
it be tried if only because the formula needs to be tested to 
destruction.

The only remedy that would be genuinely effective - significant cuts 
in business taxes and income tax - will finally have to come when 
everything else has been exhausted.

But at some point, a really radical thought must be entertained: we 
got into this mess because government over-reached itself as a 
provider, and failed as a regulator. The long-term answer must be for 
it to do less of the former and to raise its game on the latter.
The Conservatives talk of "sustainable" tax cuts being funded out of 
savings in expenditure, but their examples are minuscule, fiddly 
things: the ID card scheme should be scrapped and the NHS computer 
system should be decommissioned.

They talk of cutting waste (another plank on which Mr Darling plans 
to match them) of which, God knows, there is plenty - but they do not 
carry the argument to its logical conclusion: waste is endemic in 
government spending.

If you cut out one bit of it, another will spring forth to take its 
place because state-funded bureaucracy is self-replicating and self-
validating.

The power to spend other people's money without accountability to 
their individual wishes is corrupting.

When governments attempt to insert mechanisms into the system that 
would create analogues of the sort of accountability that private 
transactions offer, it ends by simply producing more unaccountable 
bureaucracy: the simulacrum of a market in which attempts to ensure 
value for money become sham exercises with fiddled figures, or 
ruthless, inappropriate crackdowns on expenditure that show little 
understanding of public needs.

Everybody is saying that, at last, we've got a real political debate 
with one side advocating immediate (unfunded) tax cuts and increased 
public spending, and the other warning against extra borrowing and 
calling for only those tax reductions that can be "afforded".

This is not a debate; it is a tactical skirmish. The real debate 
should be about the limits of government and the relationship between 
the production of wealth and the spending of it.

This present crisis, precisely because it is so earth-shakingly 
severe, is an opportunity to rethink the entire political settlement 
in which government has commandeered greater and greater proportions 
of privately created wealth in order to administer ever larger areas 
of social and communal life.

It does not simply guarantee and oversee the provision of basic 
services such as health and education; it owns the infrastructure of 
those services and directly employs the people who work in them.
Yes, we do need more spending to get us out of this emergency, but 
that spending should be channelled through the private sector: 
schools and hospitals could be "independent" (if you prefer that word 
to "private") and still be free at the point of use - to be run at 
taxpayers' expense but so much more efficiently and productively that 
it would cost the taxpayers less.

Now government is edging toward nationalisation of the banks, which 
it would presumably run with all the competence and efficiency that 
it once manufactured cars and steel.

It's a dangerous position and could easily end by default in a 
corporate state of dimensions that have not been dreamt of in the 
West for half a century. Alternatively, we can use this time to 
reassess the limitations of government capability.

Maybe we will have to wait until it is proved beyond doubt that all 
the government remedies for this crisis are useless, but at some 
point we could declare that one of the things we must now acknowledge 
(and the Tories are, however feebly, hinting at this already) is that 
the state has hugely over-extended itself.

It is borrowing too much because it is costing too much because it is 
doing too much.
=======================
CONSERVATIVE HOME BLOG   24.11.08
[This blog carries brief summaries of comment from around the media 
this morning - - cs]
-----------------------------------------------------------------
Tories hope for jackpot as Cameron gambles on tax...
"If today's massive "fiscal stimulus" is the Labour Government's 
biggest gamble, David Cameron's decision to oppose it is for him and 
his party just as crucial. From the moment that Alistair Darling sits 
down, the Conservative leadership will accuse him of recklessness for 
which the country will pay later. If they can persuade people they 
are right, victory at the next election is probably assured. " - 
Philip Webster's analysis in The Times
---------------------------------------
"But what if that fragile thing, confidence, does begin to return 
next year? What if the coordinated international action, and a return 
to liquidity in the financial system, and some kind of recovery in 
consumer spending, make the fiscal boost seem a success? Then Cameron 
is in a terrible position. He has turned himself from Sunny Dave to 
Mr Glum and still got it wrong. It will be too late to save himself 
by reshuffles. He is tied to his chum Osborne and the two of them 
will look too inexperienced." - Jackie Ashley in The Guardian
---------------------------------------
...as another leading columnist severely doubts Brown's motives
"Gordon Brown has a duty to do everything possible to prevent a 
recession from turning into a slump. At the very least, he ought to 
ensure he does nothing to make matters worse. Today, he will fail 
that test, for one reason: his motives. He is happy to risk further 
damage to the economy as long as he can inflict damage on the Tories. 
The only recovery which interests him is the recovery in his poll 
ratings. Today's measures are not economic. They are political." - 
Bruce Anderson in The Independent
-----------------------------------------
Retailers doubt VAT cut will be effective...
"Leading retailers fear the VAT cut will be too little to save the 
British high street as the latest figures show "unprecedented" sales 
are failing to get shoppers to part with their cash... Some believe 
certain businesses might pocket the handout to help their balance 
sheets - while others accuse the Government of creating a "logistical 
nightmare" for retailers who have already priced up products." - 
Daily Telegraph
----------------------------------------
...as does Trevor Kavanagh in The Sun
"If you're deep in debt, scared of the sack and watching your 
miserable pension pot evaporate, will you celebrate with a bottle of 
wine tonight to save 15p? Or splash out £500 on a plasma TV to save 
£12.50? If you've got £12,000 in a building society, will you keep it 
there or save £225 on a new car? Probably not, especially when you're 
going to have to pay it all back later, with interest." - Trevor 
Kavanagh in The Sun
---------------------------------------
Nigel Lawson: Britain will pay for Brown's fiscal boost
"Given that we are facing - at least in the UK - the worst recession 
since the war, it might be thought that the bigger the fiscal boost, 
the better. That would be a serious mistake. The truth is that the 
smaller the fiscal boost, the better." - Lord Lawson writing in the 
FT   [I think this highly idiosyncratiic remark needs further 
investigation! -cs]
-------------------------------------
Brown attacks Tories over "tax bombshell" claim
"Those people who say 'do nothing now' would leave people, as in the 
80s and the 90s, without hope that their mortgage problems could be 
sorted out, or their jobs problems could be sorted out. It would be 
lacking in compassion as well as irresponsible, in my view." - Gordon 
Brown quoted in The Times