The foolish and facile optimism so prevalent is a product of Brown’s spinning. No way can we escape the results of his reckless spending which has merely postponed the worst of the unemployment figures at the expense of a blighted generation ahead.
This is yet another person warning about the future.
Christina Speight
EVENING STANDARD
15.6.09
Come clean, Gordon Brown: the worst is still to come
Anthony Hilton
Despite those fabled green shoots, the reality is we have a decade of high taxes and low spending ahead...
Of the Prime Minister's various weaknesses, the most damaging is his tendency to treat the voters as if they are idiots. Everyone now knows that his 10-year boom as Chancellor was built on an orgy of debt, in which we all spent 110 per cent of our income and treated our houses like cash machines. We also now realise that money has to be paid back, so as a rule of thumb we can expect that for the next 10 years we will be able to spend just 90 per cent of our income, with the rest being used to put the nation's and our own finances back on an even keel. But not Prime Minister Gordon Brown.
He seems to want to convince us that life can go on much as before. Indeed his entire political strategy for winning the next election seems to be based on persuading us to believe that the biggest financial shock the world has ever seen will not really have any lasting impact.
This is the logic of the intensifying row over future public-spending cuts. Thus today his protégé Ed Balls, the schools secretary, rages that "the Tories are committed to cutting spending" and portrays the next election as a battle over "Labour investment versus Tory cuts". Mr Brown said the same thing last week when the Tory shadow health minister Andrew Lansley predicted cuts of up to 10 per cent in the NHS budget over the next few years. Doubtless Mr Brown's attack dogs will react similarly to shadow chancellor George Osborne's frankness today on future cuts. Whom does the PM think he is kidding?
For most people expect cuts whoever wins. This is not because the public is way ahead of the politicians in accepting the need to change their ways, though they are; it is because Alistair Darling's most recent budget said Labour would cut, too. Do a bit of work with a calculator, make the tricky adjustments between real spending and that which is made to appear higher only because of inflation, and what you find is that the forecasts published at Budget time seven weeks ago spell out clearly that Labour will make cuts, too.
It's not rocket science. You can't get as deep into debt as we have and expect people to continue to lend you money to stay afloat unless you also appear to make some effort to mend your ways. The Treasury and the Government have obviously recognised this - even if they are reluctant to make the admission in public.
The Budget small print shows that Labour is planning to cut real public spending by 0.3 per cent a year between April 2011 and April 2013. But given that the Prime Minister's favoured way of making these savings is by savage cuts in capital projects such as transport infrastructure, hospital and school building and military equipment, while leaving other favoured areas of spending untouched, where the axe does fall it will be really brutal. The reality is likely to be a 40 per cent cut in capital spending over those three years.
We as a nation are going to have to make some genuinely tough choices. We are going to have to rethink what we want from public services, how much we are prepared to pay for them and what we are prepared to sacrifice. Many things we do now we just will not be able to do in future - and it would be in everyone's interest if the Government would admit it.
There are chunks of government spending over which it has little or no control, so the other bits get hit out of all proportion. Government has, for example, to meet interest payments on the billions of new debt - and indeed the old - and it has no choice but to pay.
It also has to pay unemployment and other benefits to the millions who are likely to be thrown out of work - and the history of past recessions is that things appear to get much worse for at least a year after the first green shoots appear. Those payments are going to soar.
To get a feel for the pain to come and an estimate of how spending on unemployment will soar, just look at the looming job cuts in the car industry, in steel, in airlines, in the media. Over the past week, one economic forecaster after another has queued up to report a sighting of green shoots - a confirmation that the bitter economic winter is gradually giving way to spring. But we in this country, of all places, should know that a warm spring is not a guarantee of a hot summer. The worst part of any recession comes after the growth numbers have turned up but the effects of the earlier slowdown are still working through.
There is chronic overcapacity in so many industries and it is going to have to be dealt with. Then it will be the turn of services. Coming soon to a high street near you is the question of how many coffee shops, mobile phone stores, women's fashion outlets, fast food restaurant, sports retailers or health clubs does one town need? And who is going to be calling all those call centres? Most people have not really felt much pain from this recession yet and may think the worst is over now the economy has stopped falling. They are in for a rude awakening.
The Governor of the Bank of England knows this full well and that is why he keeps upsetting the Government with his warnings that we are nowhere near out of the woods. But it is not just Mervyn King. Last week Andrew Sentance, a member of the Monetary Policy Committee, said quite clearly in a speech that the country faces 10 years of what he called tight fiscal policies - which is economist-speak for higher taxes and lower spending.
The same message has come in the past few days from the deputy governors Paul Tucker and Charles Bean and almost every independent economist, trade association and lobbying group in the country and a few international bodies into the bargain.
Indeed, no one believes it is going to get any easier soon.
Surely they can't all be out of step while Brown is right.
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