The public is totally uninterested in the dirty tricks behind closed doors which is the EU’s substitute for democracy . But the appointment of two nonentities to new Brussels posts marks a step up in power for the French and Germans who’ve played a very dirty game with consummate skill. In particular the French have now ensured that they will control the key economic posts in the new Commission - and that is where the real power lies.
But what will eventually interest the public more when they wake up is what’s coming. The argument now is focussing on the question of cuts or taxes. As Warner here suggests the likelihood is both - unless Brown were to survive in a hung parliament. (In which case we would go giggling to our end!) He suggests that the urgency is such that major tax rises would have to be the opening gambit because cuts take too long to take effect, The cuts would follow.
That is the measure of Brown’s legacy - we’ve run out of both money AND TIME!
Christina
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CONSERVATIVE HOME 21.11.09
William Hague accuses Brown over deal with France on EU jobs which will sell out the City of London
Jonathan Isaby
In my post yesterday morning on the Right's reaction to the appointment of Herman Van Rompuy and Baroness Ashton to their new European Union jobs, I alluded to concerns among Tories in Brussels about the fact that it was likely that a Commissioner from France or Germany would be responsible for the internal market and financial services.
The French newspaper, Le Monde, has suggested that the appointment of Baroness Ashton was indeed only agreed by the French on condition that a French MEP, Michel Barnier, be appointed the Commissioner (and indeed a Vice President of the Commission) responsible for... the internal market and financial services.
As today's Independent reports, William Hague is demanding the Government explain what has been agreed behind closed doors:
"If Gordon Brown has done a deal that would mean a French commissioner being in charge of the economic issues that affect Britain the most then that could be a serious concern. Our French partners have a different view on market issues that touch on Britain's vital economic interests. I look forward to the Government taking this opportunity to be completely open about what has been agreed."
In a letter to the Foreign Secretary, David Miliband, Mr Hague adds:
"The financial services sector is an area of extreme sensitivity for the British national interest. It is of crucial importance to the future of a pro-growth EU that there is no retreat from the principle of a free market within the EU."
Michael Fallon, the senior Conservative MP on the Treasury Select Commitee, echoed these concerns on Radio 4's The World Tonight yesterday evening (24 mins 30 second in, but only available on the BBC iPlayer for one week).
He said that the City would be "extremely alarmed" at the prospect of a "protectionist, anti-London and anti-market" Commissioner taking such a crucial portfolio and suggested that surrendering one of the big economic portfolios at the Commission (ie trade) for the position of High Representative on Foreign Affairs was detrimental to the UK's interests. He said that it was a case of "game, set and match to the French" in their desire to add to the regulatory burden on the City of London.
> Today's Times has a good account of the wheeling and dealing that went on over the allocation of jobs and suggests that a number of other British names were considered for the High Representative before Baroness Ashton, making here the fourth choice for the post.
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TELEGRAPH 21.11.09
Gordon Brown's financial delusions will cost Britain dear
Gordon Brown The PM still won't admit that too much state spending is economically destructive, says Jeremy Warner.
Vanitas, vanitatum et omnia vanitas... all is vanity. In the dying days of Gordon Brown's Government, this ancient saw seems truer than ever. The Prime Minister's position is becoming ever more tragic in its delusion.
Everyone now accepts that the coming fiscal consolidation has to be big, painful and urgent. Everyone, that is, apart from Mr Brown and his dwindling band of camp followers. Much of the Cabinet still seems to have its head buried in the sand. [And one or two of my readers too who think that a meaningless cand futile referendum - to decide . er . what? - is more important than the greatest economic catastrophe in living memory -cs]
The reason is obvious enough, and it has virtually nothing to do with the economic debate over whether spending your way out of trouble is a legitimate approach to tackling the recession.
The simple truth is that the Government cannot yet bring itself to admit that the vast increase in public spending it has presided over has to be put sharply into reverse. The leviathan Mr Brown has created is an odd sort of beast to be proud of, but it's his construct and he's not about to sign its death warrant.
The curiosity of this stance is not just that an intellect as formidable as Mr Brown should blindly still be pursuing such an economically destructive strategy, but that it is almost certainly electorally flawed, too. In his arrogance, the Prime Minister refuses to see it.
Of course, it is possible that Mr Brown knows all too well what needs to be done, but continues to think his best chance of re-election is to mislead the voters into thinking there is a pain-free alternative. If so, his position is even more deluded. Naivety is one thing, but lack of candour is unforgivable and will be punished at the ballot box.
Public debt is on an explosive course throughout the developed world, so Britain is hardly alone in facing fiscal ruin. Some of this deterioration can be put down directly to the effects of the recession and financial crisis, and will self-correct once the economy begins to grow again.
But in Britain, well over half of it is structural in nature, reducing the scope for fiscal repair when the economy recovers. Put simply, Britain has been spending way beyond the ability of the present tax base to pay.
Only Mr Brown seems incapable of seeing the perilous position this has put the country in. The Confederation of British Industry and the Organisation for Economic Co-operation and Development are just the latest to demand more draconian and immediate action. [that’s following the World Bank and the IMF -cs]
Over the past week, one or two shafts of realism do seem to have penetrated the neverland occupied by the Prime Minister and his allies. Both Mr Brown and Lord Mandelson have hinted at the need for further tax rises.
This admission ignores the fact that the underlying problem is not too little tax but too much spending. Unfortunately, it is almost inevitable that the immediate fix will be achieved through tax rises. Just as spending cuts are anathema to Labour, tax rises are ideologically unacceptable for the Tories, yet once in power they too would be forced to confront their demons.
This is because most spending cuts take time to implement and sometimes involve substantial upfront costs. Serious cuts that offer a permanent solution cannot be achieved except by taking the axe to entitlements.
Some benefits can be adapted relatively easily. Means testing of child benefit is an obvious example. But again the savings wouldn't be sufficient. Really deep inroads are only achieved via radical action, such as raising the age of entitlement to state and public-sector pensions. People require time to prepare for such changes. [They’ve HAD that time aplenty! -cs]
The immediate sticking plaster solution must come through tax rises. It may seem hard to believe the economy can be taxed any further without hitting the law of diminishing returns, but as governments have discovered down the ages, it's amazing what a little expropriation can do. The obvious targets are a big hike in VAT, a carbon tax and a windfall profits tax on the banks.
Provided everyone can feel confident that this increase in the tax burden is temporary and will be reversed as savings in public-sector spending are realised, it might be thought a price worth paying. A calamitous loss of confidence in the debt markets and a crippling rise in long term interest rates scarcely look more appetising. [There’s the British habit of understatement disguising what he is actually saying, Control by the IMF would mark Britain’s relegation to a third-rate banana republic with standards of existence to match -cs]
Economies that address their debt issues comprehensively will put themselves on a more competitive footing relative to those that don't. Short-term sacrifice will be repaid by superior economic growth.
In the US, with similar fiscal challenges, the Senate Budget Committee has proposed an independent commission as a way of breaking the deadlock between an administration determined to extend entitlements and a powerful Republican opposition that is pathologically against any increase in taxes. It may be that something similarly bipartisan is needed in Britain.
Not everyone in the Government is as stubbornly resistant to action as Mr Brown. Alistair Darling, the Chancellor, has demonstrated a better grasp of reality than his master. I guess next month's Pre-Budget Report will tell us who's won, but don't hold your breath. The only way to stop Mr Brown from spending is to remove his credit card.
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