Georgie Porgie Pudding And Pie, Became The Chancellor And Told A Big Lie

As Freedonia suffers wave after wave of Sylvanian attack in the Marx Brothers Duck Soup, Rufus T.Firefly (Groucho) puts out an emergency call to the world.  "We're in a mess, folks, we're in a mess."  In recent months, both the Greek and Irish Finance Ministers have put out similar calls.  On both occasions, the reply from the international community has reflected the response Firefly received: "Help is on the way!"

According to many on the right, our economy was very close to being the next to echo Firefly's call.  Of course Britain, particularly Conservative Britain, could never hold out the begging bowl to its neighbours, could it?  Dennis Healy's 1978 negotiations with the IMF are always characterised as the Labour Government going "cap in hand".  No, asking for aid would never do.  So when there is a deficit, we must borrow from the markets and in order to give them confidence, we must show that we are getting our financial house in order.  Of course, we all know what financial markets like.  Stringent public spending cuts and low taxation.  So, if that's what we need, then that's what the Tories have to do, right?

Well, only right if you swallow several pieces of propaganda beforehand.  Ever since the last election, Conservative politicians have wasted no time in accusing Labour of spending too much and getting the country into a mess.  The only alternative, then, is to cut public spending, hard, deep and fast.  The second piece of mischief making we've heard constantly since last May is that if we tax more, people will go to work elsewhere.  Therefore to keep the best people, we must hold our noses while they receive large payments in the form of salary and bonuses, as it is they who will lead the recovery, out of Labour's broken society and into the sunlit uplands of a prosperous Tory Britain. (I'm worried at how easily I can write these phrases and can almost imagine Land of Hope and Glory playing in the background......)

The only problem with these two claims is that they are political rhetoric and not much more.  What George Osborne fails to tell us is far more interesting than anything he does.  For instance, he constantly claims that he did not know how bad the figures were until he entered the Treasury in May.  However, he has kept pretty quiet about the massive fall in tax revenues the country suffered between 2008 and 2010 when unemployment rose, and how borrowing had to increase in order to plug the gap.  Why?  Because, of course, that would be an argument for getting more people into work and therefore increasing revenue.  At a time when the Conservatives are desperate to lay off as many librarians and lollipop people as possible, the idea of actually investing in jobs plays no part in their ideological desires.  The fact that the gaps in the economy are a product of a shortfall in income rather than an excess of expenditure seems to have passed our esteemed Chancellor by.  Either that, or he has decided we would be better off not knowing.

The second claim, of course, is that the well paid (and I am trying desperately not to mention everyones least favourite sector, but failing miserably.....BANKERS!!!) will take their talents somewhere else if they are asked to help out.  Where exactly they are meant to head to is not quite made clear.  USA?  Not enough Government-subsidised Private Schools.  Ireland?  Greece?  Portugal?  Spain?  They have enough issues with their own bankers without importing ours.  France?  Hardly.  A British banker working in France would be about as popular as....well, as popular as they are in this country.  Only they would pay more tax.  Trough-bound pigs do not cut off their snouts to spite their faces.

It's also interesting that we as a nation often boast about having the finest Universities in the world, but the present Government seem oblivious to the prospect that there may soon not be enough British students to fill them.  Strange how the theory goes that we cannot tax failure, but we can sting the hell out of future potential without worrying that the next decades teachers, managers, engineers and nurses might well choose to go off to study somewhere else.

If high public spending was such an issue for George Osborne, it is legitimate to ask why he agreed to match Labour's spending commitments for the first two years of a Tory administration, a promise that was quietly allowed to fall by the wayside after the election.  After all, successful economies just don't have lots of Government spending, do they?  That's why three of the countries whose spending has risen most in the last ten years are China, India and Brazil.  All countries we are told have, erm, successful economies.

Keynes was right.  When times are bad, invest.  Reap the tax revenues and increase taxation to recoup the money when things have picked up.  The Tory way is to throw people out of work, pay them to be idle, then blame them for not being able to find a job.  If only we had millions of inherited wealth waiting for us like Mr Osborne.  Maybe one day, we will have a Chancellor with enough guts to make sure he and other wealthy individuals pay their fair share of tax.