Bernard Ingham: Why Osborne must resist temptation and hold firm

In saying so, I am not forgetting that I have regularly praised Chancellor George Osborne for his consistency of purpose in reducing the £156bn budget deficit he inherited, albeit too slowly.

But the man is under pressure. An election is little over a year away.

I doubt whether he worries much about what Ed Miliband and Ed Balls get up to. They will always want to tax somebody more and spend more. They are death to sensible, prudent government.

No, the Chancellor’s problem is, first, his own side. Tory MPs are restive chiefly about the “squeezed middle” and the steady absorption of more of the middle class into the 40 per cent tax bracket because of the freezing of the threshold. They want tax cuts, even though we are still up to our gills in debt.

Then his Liberal Democrat partners, while nominally backing deficit reduction, want to present themselves as champions of the poorer paid by raising the threshold at which tax becomes due – in other words, taking people out of tax liability altogether.

Let us now turn from this jittery, political mess to economy reality. Quite simply, the UK cannot afford giveaway Budgets any more. As Labour’s Chief Secretary, Liam Byrne, cheekily informed his successor four years ago: the money has run out.

We are no more flush with it now. Austerity, as it is described, has only reduced our debt by about £50bn. We are still around £100bn in the red. We face another Parliament of austerity if we return Osborne and eventually endless years of it if we are stupid enough to elect Miliband and Balls who have bankruptcy written all over them.

Never forget the billions being added to the public debt every year so long as we have to borrow massively to cover our spending. And let us never forget that this nation now owes something like £1.3trillion (one thousand billion). It cannot go on. The more our public debt, the more crippled we are in running the country.

This is the measure of Gordon Brown’s years of largesse, trying to buy votes, especially among public sector workers, while at the same time wrecking British pensions.

It is also a measure of the blindness – not to say hypocrisy – of the health unions in threatening strikes over a one per cent pay rise.

We cannot in truth afford that after the way their political heroes – Brown, Balls and Miliband – laid waste to the public finances over the first decade of this century.

This means that we need to look at two things – what is the purpose of central government; and what are the major issues confronting it apart from debt.

The job of central government is easily defined: to defend the realm, the currency and the weak, to preserve law and order and – for purposes of emphasis – to manage the nation’s affairs sensibly to secure those ends.

If you are prepared to put to one side whether our armed forces and law enforcement system are in good shape, the major issues nagging government are obvious:

How can we re-equip the nation with modern infrastructure?

How can we raise productivity and find employment for nearly 1m unemployed young British people as distinct from foreigners?

How can we secure an education service that prepares the least gifted for work rather than the dole?

How can we underpin improving economic performance with an energy policy that secures supply rather than imperils it because of this idiotic and cripplingly expensive obsession with useless renewable sources of power?

How can we maintain a viable and effective health service under pressure from an ageing population and almost exponential developments in medical science?

In other words, how is the Chancellor to tackle these problems without spending money we would have to borrow?

He has something to crow about. Virtually every forecast has Britain set to grow faster than any other advanced economy.

Inflation is low. The private sector is creating jobs at a rare rate. Things are undoubtedly looking up.

But, measured by the remaining size of the deficit, the job is only a third done. To return to soundly based prosperity we need to eliminate it and create more wealth to reduce wider debt.

By all means give hope, Chancellor. But walk not into temptation. Stay resolute and No 10 will beckon.