Wednesday, 22 November 2017

The budget

Brexit mutineer captured
They just don't get it. Phillip Hammond gave an upbeat performance for someone with a reputation of  having less charisma than a spreadsheet. Not that it made a lot of difference. Like all Chancellors he threw out a lot of positive sounding figures, most of which were repeats of existing spending plans but were being reduced (although this was not mentioned) because of falling productivity and income streams.

Whilst some effort was made to make a case for housing investment and extra money for the NHS, the proposals were soon exposed by the political analysts as political hype. Even the right wing commentator and bruiser, Andrew Neil, skewered the lamentable Chief Secretary to the Treasury, Liz Truss, by showing that on any measure things had just got progressively worse since 2010. For example social housing had fallen from 36,000 houses a year in 2010 to just 5600 a year in 2016. Even the extra money for social housing would  only support an extra 3000 houses per annum and her claim that they were building more houses was simply preposterous.

Great play was made by Hammond of the investment in HS2 and Crossrail, the two biggets infrastructure projects in Europe but both further concentrating investment in the south east. Meanwhile the Trans Pennine route may get some cash for broadband on the trains. That's the extent of government priority for the northern powerhouse for you.

The main omission of the budget, as in every year since 2007, is that local government and public services have been sacrificed on the alter of treasury ignorance and ministerial incompetence. Ten years of austerity has resulted in many services barely functioning. 25% of staff have been lost through retirement, redundancy and non replacement of leavers. Buildings and land have been sold off, supplies and services cut back and important regulatory functions are failing to meet the schedules required to maintain standards. The remaining staff having had 7 years of pay cuts in real terms. Many developments and local initiatives that were dependent upon Councils have been abandoned or simply not emerged from the tunnel of despondency that the goverment has pushed local government into over the past seven years.

It needn't have been like this, I remember several meetings with Alistair Darling in 2008/2009, he was determined to invest in local developments to bring us out of the recession. Looking back at the economic performance since the recession, his strategy had started to work before his successor,George Osborne, stamped on the brakes of austerity. It is worth noting that the total national debt has grown from £1010bn to £1729bn (88% of the GDP) at a time when the principal objective was to pay off the debt. As the graph below shows the experiment in austerity has not been the answer that Cameron and Osborne promised and not unexpectedly Keynes was right.


If we add the centralisation of functions by both Westminster and Holyrood governments over the same period and their innate ability to micro manage (witness Police Scotland or school funding) we are watching a nation in freefall. All the evidence suggests that this is now being exacerbated as the uncertainty about Brexit deters future investment. What was remarkable this afternoon was the similarity of criticism of the budget from the TUC, the Institute of Directors, small businesses and public services. The Chancellor was trying to do too little too late and the consequences are dire.

No comments:

Post a Comment