Chancellor warns of "Toughest cuts for 20 years"

Alistair Darling has a piece in tomorrow's Times saying that Britain faces tough and painful spending cuts.

Which puts the promises from the PM and others to spend vast amounts of imaginary money in a vain attempt to win the election into perspective ...

Comments

Jane said…
I thought Daniel Finkenstein’s article in the Time (13th January) was profoundly interesting. He published a comment on the state of the economy and Labour’s leadership crisis. Finkenstein argues that Labour is concentrating on style and election strategy, but this has no substance. The attempted putsch by Hoon and Hewitt, like the naming of Gordon Brown, as the worst dressed man of the year (the crumpled suite look) is a diversion from the fundamental divisions within Labour. The real divisive factor is the issue of public spending.

Finkenstein refers to critical moments in the past in the article ‘The same old row. But with one big difference’. He cites historical examples in every Labour Government where divisions over public spending led closely to the collapse of the Government. However in all instances the Prime Minister came round to supporting the Chancellor. Auguse 23 1931 Ramsay MacDonald split from his colleagues and decided to enter a coalition with the Conservatives, because his Cabinet would not support the Chancellor’s programme. April 9 1951 Clement Atlee received Cabinet Ministers at his hospitcal bed, where he was recovering from surgery and 1968 Roy Jenkins, drove down country lanes to Barbara Castle’s cottage to persuade her to accept cuts in the Transport Departments budget. He was backed by “tricksy” Harold Wilson. Healey only succeeded in 1976 because then PM Jim Callaghan won over his critics by showing that he and his Chancellor were indivisible.

The differnce with Brown is that he is not backing his Chancellor and Brown has ended up the wrong side. Whilst Hoon and Hewitt were ineptly plotting, Finkenstein believes the real battle going on behind the scenes was that the Chancellor, with Peter Madelson in support, was having a dispute with the Education Minister Ed Balls over spending. The age old ideological debate about cuts.

Labour have been hounded by this division through every Government. The conflict between increased public spending leading to the need for efficiency savings. Successive Labour Governments have failed to restructure public services to make them sustainable. Public services never become self-reliant and prove a constant demanding strain on resources. I would add that this Labour Government has added, like no other so many layers of bureaucracy and quangos, that are leaching public resources. This like no other, on inheriting a healthy treasury, is responsible for a reversal that is unprecedented due to irresponsible squandering of resources. This Labour Government had a chance to build, on a strong economic base, sustainable public services. The resulting crisis now in public spending is worse than any other.

After much officicial denial preventing the party facing up to the extent of the debt crisis some members (including the Chancellor Alistair Darling) with a lot of prompting from the Conservatives, are coming round to the fact that this “cannot go on.”

It is probably more appropriate to leave Mr Finkenstein with the last comment, as he can put it more succinctly than I can. “The common attack on Mr Brown, the one we heard again last week from inside his party, is that he is a poor leader, that no one likes him, that he is a loser. But this verdict, damning though it is, is too kind”. The division over spending and Brown coming down on the wrong side will be the real judgment on his Government. What is really wrong with Brown is that he has made “one of the great public policy mistakes of the past fifty years”.

Popular posts from this blog

Nick Herbert on his visit to flood hit areas of Cumbria

Quotes of the day 19th August 2020

Quote of the day 24th July 2020