Monday, April 27, 2009
All Labour Governments eventually run out of money and last week this one proved that it was no different. The damage that Labour has done to the public finances is truly horrendous. They have saddled future generations with an unprecedented amount of debt; vastly more than in 1976 when Britain was forced to go cap in hand to the IMF and even more than in the aftermath of World War 2.
Gordon Brown once trumpeted that he abided by certain fiscal rules which included public debt not exceeding 40% of Gross Domestic Product. In fact he will end up with borrowing at a staggering 80% of GDP. To get back to his 40% figure may take up to 40 years! These crippling debts will have to be paid off not just by today’s generation but by our children as well, whose futures Gordon Brown has mortgaged.
In 2009 alone Gordon Brown says that he will borrow £175 billion. In last year’s budget he told us this figure would be only £38 billion. Independent analysts suggest that the true figure may exceed £200 billion.
The Government has a track record of getting its numbers wrong. Last year they said the economy would grow by 2.5%, now they say that it will shrink by 3.5%.
What is even more worrying is that the levels of planned government borrowing are based on some very optimistic assumptions about future economic growth. Gordon Brown says that the economy will grow by 1.25% in 2010 and 3.5% the following year. Considering how Labour got their sums so drastically wrong in the past and the fact that independent forecasters predict far worse figures for the future, we must surely worry at the actual amount of borrowing Labour will end up saddling the country with. The IMF predicts that the economy will shrink by over 4% this year and will shrink by nearly half a percent the following year.
Confidence in the economy will not come back unless the Government comes clean about the scale of the problem. It needs to set out a clear programme for showing how the debt will be repaid. Public spending restraint must be at the forefront of such a programme and the Government must prioritise. We cannot afford expensive and unnecessary schemes such as identity cards and we need to do away with the costly and unaccountable quangos that Gordon Brown has spawned. This would save billions.
The key failure in last week’s budget was the Government continuing to spin and deceive about the state of the public finances. No one believes the Government’s figures. This budget can be summed up in one word: Dishonest.
What Britain needs is some straight talking and honesty. I believe that this will only come with a change in government.