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A tragically missed opportunity – the United Kingdom goverment spending review.

I will not say that there are no good ideas in yesterday’s U.K. government spending review – that I do not welcome some of the ideas for saving money. However, overall the exercise can only be fairly judged a failure – a failure of nerve as much as a failure of intellect. An effort has been made (unlike the utter fantasy world that is current American policy), but it is not enough – not nearly enough, to really deal with the fundemental problems.

What was done was enough to satisfy the bond market presently (to keep the United Kindom’s Triple A rating), but that is a bare minimum – so much more could, and should, have been done.

It is true that some problems were seriously examined – for example the government pension crises (with the raise in the retirement age in 2018/2020). But there was no sense of a fundemental spending review – of thinking for the long term on such matters as health, education or even welfare (although the government has made some moves towards reform on this).

The basic (and brutal) fact remains – U.K. government spending remains insanely high and this spending review will not really bring it down.

Even long discredited ideas such as overseas “development aid” (discredited by such works as the late Peter Bauer’s “Dissent On Development”) are not only maintained but expanded. And absurdities such as the television tax (to fund the leftist propaganda of the BBC) are only frozen – not abolished. Even Crossrail (a project which is violating the private property rights of people in their homes and business enterprises across London) is to be continued with.

Is the government getting out of things that it has no business to be in such as “Media, Culture and Sport” (or “welfare for the toffs” as some have called it) – no, although the budget is being cut.

Has the government really thought out long term defence – the only honest reply can be “no” (aircraft carriers without aircraft – and a lack of clarity about Trident).

Has the government got a clear plan for VICTORY (it appears to a be a forebidden word) in Afghanistan – or are we just spending money (and lives) without a clear aim? Does anyone doubt the answer to that?

Is there any really fundemental rethinking of the long term structure of the Welfare State – see above, the only honest reply can be “not really”.

Is there even a formal acceptance that credit bubble financial expansion (which is where former Prime Minister Brown got his revenue from to finance the explosion in government spending) can not continue?

Certainly not – the government believes that lending should be expanded (i.e. back to the credit bubble) even whilst it increases taxes on saving and its officials, at the Bank of England, sneer at savers and declare they should spend their money (the “demand” fallacy) – no language is too harsh in relation to the wrong headed attitude on this question.

Is there a clear committment to no more bank bailouts? No – the government just pretends that more regulations (on top of the thousands of pages of regulations that already exist) can square the circle of “cheap money” (i.e. lending not based on real savings) and sound banking (we can not have both).

Have we even got out of the money wasting (and wildly regulating) extra layer of government, that is the European Union – NO.

None of the above would be so bad if the spending review had been advertised as a holding exercise.

“Listen – we have to do something now FAST, to stop a panic on bond markets and the costs of us borrowing money exploding. But we are thinking about the fundemental problems of policy and we will come back later”.

But that is not what was done. On the contrary the whole matter was advertised as the great solution – the Duke of York led all his men up to the top of the hill and …. he led them back down again.

All the savage attacks from the BBC (and so on) would have been worth it – if the real long term problems had been dealt with, but they have not. I repeat – it was a holding exercise, better than doing nothing at all. But still a missed opportunity, a tragically missed opportunity.

What would Sir Robert Peel have done in this situation? Or Gladstone? Or even Sir Robert Walpole back in the corrupt early 18th century?

They would idenitfied what was just plain silly (such as “Development Aid” or the “Department of Culture, Media and Sport” and, of course, “E.U. membership” – a club we should not be in, even if it was free) and hit on the head at once. And they would have also looked at what the government could not do in the long term and started to work to reduce the role of the state. Not in a cruel way (Walpole’s enemies said he was corrupt, not that he was cruel, and Sir Robert Peel did more for the starving in Ireland than anyone else – it was a terrible misfortune for them that he fell from office when he did), but still in a fundemental way.

But it is vain to talk in this way – because there simply are not the people of this sort in high positions in politics today. Unlike some (by no means all) of the politicians of the past, the present occupyers of their positions seem to have no long term view of what the government should be doing and what it should not be doing. No clear vision of where they want to go and how to get there – no “vision thing” as President George Herbert Walker Bush sadly called it (and he was talking sadly, he was not seering at vision when he de facto admitted he did not have it). I am not saying they have an evil collectivist ideology – but rather than they just have no clear grasp of what they think would be the correct position to work towards.

I do not care whether the people trying to make the policy judgements are called “conservatives”, “liberals”, “libertarians”, or whatever – what I care about is are the basic problems being dealt with in a sustainable way.

And the grim reply has to be “no”.

The fundemental issues of policy will have to be dealt with at some point (the very viability of the country depends upon it – yes pompous, but sometimes being pompous is appropriate) – but now it will be more difficult, precisely because the government has said it has basically done all that needs to be done. And it has not.


  1. Lynne says:

    Our politiciancs do have a vision. A shared one that contains lots and lots of twenty pound notes falling into their troughs. They also have a collective long term vision, in a similar vein, but this one contains truckloads of Euros…

  2. NickM says:

    Much though I agree with most of your analysis here. Not least because the pissing and moaning would have been no more intense if their had been significant cuts in things that really do need cutting and those could fill not one but two aircraft carriers (which is fortunate). But the question you fail to address is “Whose opportunity?” I would suggest not iDave or ?Nick’s. It’s only a missed opportunity if it’s something you wanted to do. If the economy wasn’t so clearly in the soup not a bloody chance of meaningful cuts from either. What do you thing “Big Society” is about? It’s rebranding is all. As is shifting some QUNAGOs into Whitehall. It’s shuffling a pack of bad scrabble tiles rather than tossing them in and hoping for at least one vowel. And it’s what the government wants to do. Not what they weren’t brave enough to do.

  3. El Draque says:

    I too had the feeling of a big let-down.
    But there may be consequences not so far announced. The government won’t announce that fake charities won’t get grants, but it’s highly likely that there will be cuts nevertheless.
    Police may decide to go easy on minor drug posession, but I would have preferred that it was decriminalised.

    We shall see. Above all, our credit rating must be maintained. No British government has defaulted for 800 years, it must be kept that way.

  4. Paul Marks says:

    One point I did not make clearly enough is that I do not think the office holders have an evil ideology (Comrade Barack they are not).

    I do not even think they are in it for the money – for example David Cameron is very rich.

    It is (in a way) worse than that – it is if “the lights are on, but no one is at home” when it comes to the beliefs in their souls.

    I have been (quite rightly) told off about my bad language – so I will leave it at that.

    Still did any of the British based people see the front page of the “Daily Mirror”? It was wonderfully dishonest.

    It had the government cutting all things they have not cut (the NHS and all).

    It started me thinking how wonderful it would be to live in the “Mirror Universe” and where the “doorway” might be.

    Not that the other newspapers were much better – they all bought the “big cuts”, “rolling back of the state” line.

    And most of them (including, of course, the brain dead [watch it Paul - sorry] Financial Times) thought it was all a “gamble”.

    As if a minor move to live slightly closer to your means was a very “risky” move – borrowing money and creating money out of thin air not being risky at all of course.

    The public seem to have bought this propaganda line that “the cuts” must not be “too deep” or “too fast” – mainly because the BBC (and so on) tell the pulic that every hour of the day.

    So when the economy does go back into recession (which it will) the public will blame “the cuts”.

    I suppose I should hang myself – but I do not have the courage (or the practical skills).

  5. NickM says:

    Yes, I did see The Mirror and even by their standards…

    I also saw the Manchester Evening News which suggested that Manchester will lose 40,000 jobs overnight.

    All untrue.

    You are very right about the lack of the “vision thing”. I honestly don’t think iDave has a vision beyond a vague belief of everything as it was but just done a bit better because his mob are in charge. That of course is not to say it will be done any better at all but that is the closest thing he has to a desire.

    PS Isn’t the MEN owned by the Mirror? Or the Guardian? It’s a terrible rag any which way.

  6. Kinuachdrach says:

    Being serious for a moment — spending “cuts” are necessary, but not sufficient. There also needs to be regulatory reform (i.e., rollbacks) to allow the private sector to expand, hire people, and ultimately provide more tax revenue. Open those coal mines! Build those steel mills!

    But, hey! It is a start. The mighty upward swing of government spending will slow slightly. At least this is preparing the ground for the great day when the bond market speaks at last, and big government runs into the wall. To quote Obama’s hero Mao Tse Tung, the six thousand mile march began with a single step.

  7. Lynne says:


    English Heritage – Grand Theft Stonehenge


  8. NickM says:

    I think you spotted the elephant we’ve all forgotten about for a bit. I think it’s more important. If iDave really wanted to make a difference then he’d roll-back all the shite Labour hurled at business – especially small business. An end to “third way” corporatism would be delightful but I don’t see it. It wouldn’t fit with “big society”.

    Ah, yes. NT are no better. Weird thing. I once visited the Atlanta Heritage Center (I think that’s the name) and the same middle-aged, middle class harpies you get here were wandering around this tobacco baron’s mansion like their personal fiefdom. The same twin-set and pearls, the same attitude of distain toward visitors to their (and that is meant personally, not corporately) house. Even a Georgia version of the same, “Eff ‘orf” accent. There must be a lab in China where they clone them.

    “I’m sorry Mr Li this batch will have to be junked, comrade Wei left out the condescension gene”.

    “Send former comrade Wei to the vat!”

  9. Roue le Jour says:

    Nick, you mentioned over at Samizdata your fears of stagnation Jappanese style, well I think this is how you achieve it. Brown advanced the socialist ratchet several clicks and the coalition has made it clear they will not undo it. As long as that ratchet keeps clicking relentlessly upwards, then eventually the economy must collapse under the crushing weight of the state.

    Personally, I think there is only one answer, the disenfranchisement of of the welfare recipient and government employed. Both of these groups have interests which run counter to the interest of the nation. We want to be rich and free, but the welfare recipient wants our money and the government employee wants our liberty.

  10. RAB says:

    Cuts? What cuts?

    This bunch of weasely bastards are just spending less fast than the last lot. All they are doing is re-arranging the deck chairs.

    I was just looking and a map of Britain with all the cuts highlighted over at the telegraph. I picked out Bristol and there are 12 cuts, all from the Arts Council to Legs Akimbo style travelling players and Arts Workshops and such. But the amounts are piddling. £500 off this, £350 off that, the whole fuckin lot doesn’t add up to much more than five grand! That will really get us out of the doodoo wont it?

    English Heritage are evil. My business partner and I looked into how they aquired Stonehenge in the first place, around the time of the Battle of the Beanfield. What we found was that the covenant that grants the land to them specifically states that access to the stones must be free at all times. They have blatently ignored that havent they? Still they got a poke in the eye with the cuts. Their new Visitor Centre has been cancelled. Hooray!

    Besides, if you want to go and see a Henge, go to Avebury instead. Much more fun, it even has a pub in the middle of it.

  11. Bod says:

    Agree with RAB on that one.

    There are a bunch of lesser-known henges in the area, Avebury being one of the best-known, and you don’t have to deal with the same concentration of ‘Druids’ and poseurs.

    For readers who aren’t native to the area, Avebury and its henge is conveniently close to Overton Hill, the southern end of the Ridgeway, a 5000 year old highway that winds its way around the north west of London. Of all Britain’s long-ish-distance footpaths, it used to be one of the most ‘approachable’ paths for the ‘more mature and portly’ crew (of which I am now an example) and combines plenty of archaeological sites along the footpath (well, more like bridlepath really). It’s also conveniently close to roads so you can descend to watering-places if you’re not into burning up the miles.

    This concludes my PSA

  12. Paul Marks says:

    I think it is going to be worse than Japan – both for Britain and the United States.

    Many Japanese manufacturing enterprises have held up in spite of the orgy of madness from their govenrment – but then the Japanese level of statism was much SMALLER to start with.

    Britain and the U.S. started their credit bubble bust with governments that were already out of control (Bush is America, Brown here) – and then wildly increased their level of statism on top of the already vast base.

    No way their economies can really take this.

  13. Paul Marks says:

    I would love to go walking – each day I get worse (sitting in a chair in a box is not good for me).

    As for “this is preparing the ground for future cuts” actually the government has undermined the possibilty, by saying this is really dramatic and solves the problem and …….

    Really Ian B. is correct – IF this is conservativism it is of no use to us (or anyone else) that is why I was so angry with him, there is no way for me to get at Mr Cameron (so Ian will have to do).

    “Unjust” – me?

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