When will our politicians have the guts to use the 'C' word?
By Simon Heffer
"CUT" "CUT" "CUT" "CUT" "CUT" We are having a moment of insanity. Our country is hideously in debt and overspending more recklessly than at any time since the early 1970s. Yet all three of our main political parties, having resisted tax cuts for a beleaguered public during years when money was plentiful, have entered a bidding war to provide them when, as things stand, they are unaffordable. It seems no one wants blood on his hands when having to court votes at the next election. Everyone wants to be seen to be doing his bit to alleviate the plight of the aforementioned beleaguered: not least, perhaps, because none of them raised a finger against the policies that caused the damage now being inflicted. If you can't yet see the madness of this, let me help. The Liberal Democrats - the first to talk about tax cuts - say they will fund them by raising taxes on what they call "the wealthy". Happily, they have as much chance of getting into power as I have of appearing on a Cameron honours list. Therefore, we need not trouble ourselves with worrying about how we define "wealth"; or about the tax avoidance industry that would spring up the minute such a "wealth" tax were brought in; or about the absurdity of taxing more heavily, and thoroughly disincentivising, the most productive and enterprising of people at the very moment the economy is pitching into recession. This, however bonkers, is not quite yet in the same echelon of bonkersness as the plans of the two main parties. Yet no party dare use the "C " word in the context of the public sector. But it has to be cut. There is a Heathite fear of provoking unemployment, not least in the Tory party. It is cheaper to bribe an employer to take someone off the dole than to pay them the dole; yet it is even cheaper to take someone off the public payroll and pay them the dole. I am sure some of the 700,000 people who have joined the public payroll since 1997 are necessary. I am equally sure many of them (especially in white-collar office, lower- and middle-management) are not. It is time to sort out who is needed and who is not, and to allow the latter to take their chances in the private sector. Unemployment is, regrettably, a concomitant of recession in all but sovietised societies (and we know what happened to them in the end). The pretence that it can be avoided - or indeed that it should be avoided, given the likely new unemployed would have modern skills that would help them find work in a revived and stimulated private sector - is patronising and offensive. Instead of worrying about that, our politicians should accept the imperative of increasing demand, and of doing so by the massive transfer of resources from the public to the private sector. Having just witnessed the American election, I am aware of one other point. In the run-up to elections, people say absurd things about the economy to garner votes. Barack Obama has made $1.3 trillion of spending promises. He will shortly have a rendezvous with reality. He will not deliver on those promises. He will instead have to preside over a financial situation whose full horror we have yet to see here. Wiser and older heads in his administration will need a plan to deal with reality, even though one was not promised during his campaign. This is what we need here. An early election - which Mr Brown might as well call, since the Tories have been found out and are slipping back in the polls - would at least get all the lies and idiocies out of the way. One party would then have to confront reality, just as Mr Obama is about to have to do. Then we could end the pretence of a pain-free recession, and get on and take it. So long as our politicians feel they must butter us up and make out that what is to come won't hurt a bit, the only way is down. 
The Government, so far as one can deduce from the Prime Minister's serpentine performance yesterday, plans to cut taxes. It plans to fund them by borrowing. Mr Brown would not be drawn on whether, when and if better times come, these tax cuts would eventually be paid for by higher taxes. What else could happen? The debt will be incurred. Unless we are going to become a national version of Lehman Brothers, it will have to be paid off. Who will pay off that money? Where will it come from? There is only one answer. I apologise for continually quoting the late Lord Callaghan, but you can't spend your way out of recession. You can't borrow your way out of it either.
If Labour got this in 1976, why on earth doesn't it get it now? The Government no longer has any fiscal rules worth speaking of. It has abandoned monetary considerations, which means that, in two or three years' time, we shall be back to serious, and damaging, inflation. It does not understand that its bloating of the economy's unproductive sectors over the past dozen years has contributed massively to the present problems. Gordon Brown is the author of our current, grotesque misfortune. Why then is he still in office, particularly when his only answer to the problems he has caused is to promise to cause some more?
He is still there for two reasons: first, he has not asked the Queen for a dissolution of parliament, so that we can have an election that would let the country speak about this grave state of affairs; and second, because even if he had, the Opposition has shown itself serially incapable of grasping what is wrong, why it is wrong, and how to put it right. The shadow chancellor, despite his extensive office lavishly funded with Rothschild money, barely seems to want to engage in the debate. Perhaps he is too busy finding somewhere safe to go for his holidays next year; or perhaps he is still recovering from this year's. As we may recall, even before his embarrassment with Oleg Deripaska, he didn't have a clue what was going on, so at least he is consistent. It was left instead to Mr Cameron to announce the Tories' own plan to rescue Britain yesterday. It was to pay employers a bribe to take people off the dole; a bribe justified by the assertion that, at £2,500, it would be less than the £8,000 it costs to keep someone on the dole.
It is hard to come to terms with the sheer stupidity of this wheeze, but let us try. Employers hire people because their businesses have a service to provide, or a product to make, that the public demands. They choose people with the appropriate skills to provide this service or make this product. If there is no demand for the service or product, then no one will be hired to provide or make it, even if the Conservative Party promises the business concerned £2,500 to do so. When the economy is turning down, the imperative is to stimulate that demand. There is one obvious way of doing that, and that is to reduce spending on the unproductive sectors of the economy and transfer it, instead, to the productive sectors. There is only one sound means to do this. It is to cut back the size of the public sector and the role of the state, and to put at least some of the money saved into people's pockets through immediate tax cuts. 
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