Bill Carmichael: Harsh truth is that austerity never really bit
IMAGINE you have reached that time of life when you think it wise to gather the children together to explain the terms of your will, just so nobody gets a nasty shock when you are gone.
“Children, I am afraid your mother and I have been on a bit of a wild spending spree in recent years, living totally beyond our means with lots of fine dining and expensive holidays.
“As a result there’s absolutely nothing left – so in terms of cash and assets you will inherit precisely nothing. Not a bean.
“And unfortunately, there’s still £200,000 outstanding on the mortgage and we’ve run up a £100,000 credit card bill that you will have to pay off when we are gone. Ha ha ha! Sorry – but we’ve had a ball!”
Outrageous? Indeed, it militates against every parental instinct to leave your children better off than you ever were yourself.
Only the most selfish and feckless parent would leave their family mired in unsustainable levels of crippling debt.
But that’s what governments do as a matter of routine – and the current Conservative administration is no exception. The motto they live by is spend today and let some other poor sod pay the bill in the future.
Current UK government debt has almost doubled over the last 10 years and now stands at a staggering £1.8 trillion – and we are adding to that debt mountain every day.
This money will one day have to be paid off through the hard work of our offspring at the expense of their own standards of living. By stubbornly refusing to live within our means today, we are effectively stealing from our own children and grandchildren tomorrow.
What about “austerity” and the “savage cuts”, I hear you ask. Indeed “austerity” is the fashionable word of the moment. In her conference speech last week, Theresa May indicated an end to “austerity” and this week in the Commons she and Jeremy Corbyn repeatedly clashed over how long “austerity” is likely to continue.
Well, here’s the brutal truth – austerity is not coming to an end, because it was never actually imposed in the first place!
Don’t get me wrong, certain areas of public services have seen cuts – for example in adult social care for the elderly and infirm provided by local authorities, which has been absolutely hammered.
But the hard statistics don’t lie and the tale they tell is of massive increases in total public spending as our Government burns through cash with all the restraint of a drunken sailor home on shore leave.
Look at the cold facts. Total public spending in 2010, when the Conservative-led coalition came to power, amounted to £672bn. This year it will be in the region of £800bn – a rise of almost 20 per cent.
Because we, as a country, consistently spend on public services far more than we earn in terms of tax revenue, much of this money has to be borrowed.
As a result, we are now spending almost £50bn a year just to service the interest payments on the debt. That’s about the same as we spend on defence and more than we spend on the police, housing or transport.
It goes without saying that if we didn’t have to spend so much in servicing this huge debt we could massively increase public spending at no extra cost to the taxpayer.
Our total debt as a proportion to output (GDP) was around 30 per cent in 2010. Today it is more than 85 per cent! Honestly! Austerity? What austerity?
Theresa May’s solution to this debt crisis is to borrow and spend even more. She told the Conservative party conference that taxes would also have to rise to fund a splurge on public services, including the NHS.
This is the same NHS incidentally, that plunged to 35th on an annual international comparison of healthcare efficiency last month, putting it behind Algeria, Turkey and Poland. Without reform isn’t Mrs May just pouring good money after bad?
But even the Prime Minister’s fabulous generosity with other people’s money pales into insignificance besides Labour’s insane plans to spend an extra £500bn.
If that happens you can expect the UK to make the socialist paradise of Venezuela, where inflation is expected to top 10 million per cent next year, look like the very model of stability and financial responsibility.
Oh for a party that actually promised to reduce spending and taxes instead of increasing both. But that’s never going to happen, is it?