This headline echoes Cameron’s statement yesterday “Labour have lost the right to govern”. The PBR was the most cynical political manoeuvring possible when our country is in crisis. We need a clear out and we need a replacement with a strong mandate not oner looking over its shoulder at the LibDem’s perpetual vacillations.
This must happen soon before Britain reaches a point of no return.
Christina
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SUNDAY TIMES - Leader 13.12.09
A party no longer fit to govern
When Alistair Darling delivered his pre-budget report, the public had a right to expect three things. He needed to set out a credible plan to get public borrowing down. He had to be honest about the scale of spending cuts needed during the next parliament. And, if he chose to announce tax rises, they would be for reducing the debt, not spending even more on Britain’s public sector.
The chancellor failed on all three counts. Although Britain’s borrowing is at levels that led to Greece being downgraded last week, there was no credible plan. The Fiscal Responsibility Bill, which promises to halve the budget deficit over four years, is regarded in the markets with the same disdain as Gordon Brown’s fiscal rules; abandoned as soon as the going got tough. Mr Darling is asking investors to take Britain on trust, a commodity in short supply with this government.
We wanted to know whether the government would come clean on the spending cuts needed after the election. Instead we got outright deception. Mr Darling chose only to emphasise the spending that will be protected, including “frontline” health and schools. He further proposed a two-year annual limit of 1% on public sector pay settlements, a pale shadow of the wage freezes and salary cuts being endured by the private sector.
The chancellor astonishingly tried to claim there are no spending cuts built into his plans. It was left to the Institute for Fiscal Studies to reveal the truth. Outside ring-fenced areas, spending by departments will fall between 5.6% and 6.9% a year in real terms from 2011. Cutting the size of the state is essential but the public is being conned into thinking it can be done by efficiency savings. Those savings are needed but few can have any confidence in this government being able to deliver them. Worse still, Mr Darling introduced bad taxes. Bankers, having been bailed out by taxpayers, were foolish to believe bonuses could return with impunity. But windfall taxes are a bad idea and the tax on bankers’ bonuses is likely to cost the country money. Nor was the rise in National Insurance contributions any better, combining the damaging elements of a hike in income tax and a payroll tax on jobs. For individuals and businesses, this £3 billion-a-year rise would be hard enough to stomach if it was used to pay off debt. Instead it is being used to pour even more into the bottomless pit of public spending.
Of course Mr Darling may not be wholly responsible for what he announced last week. His report had Mr Brown’s fingerprints all over it, along with those of Ed Balls, the prime minister’s sidekick and a man who covets the chancellor’s job. To paraphrase Michael Heseltine, ‘it wasn’t all Darling; it was all Balls.’
The irony is that this dishonest and irresponsible exercise has provided a short-term boost for Labour. The Tory lead has dropped by four points to nine, taking us closer to the hung parliament that the markets so dread. It is perhaps no surprise that the windfall tax on bankers’ bonuses has proved popular, backed by nearly 80% of voters. In council by-elections last week, Labour won four seats, two from the Tories. David Cameron, who saw the pre-budget report as a gift for the Conservatives, may be feeling a little uncomfortable this weekend.
He should stay calm. A combination of deception and old Labour-style class war will not fool the voters. More likely they will see a government willing to sacrifice its reputation for economic management in a desperate bid for survival. The sooner we have an election the better.
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