The rollercoaster that is the British economy took another dip today, and you could be forgiven for getting dizzy and reaching for your sick bag.
Pension funds under pressure, an embattled pound and weak growth revealed today, sees the UK flirt with recession. Proof if you needed it, that we've got to go for growth, as laid out by last month’s mini, massive budget.
Prime Minister Liz Truss departs 10 Downing Street, Westminster, London, to attend Prime Minister's Questions at the Houses of Parliament. Picture date: Wednesday October 12, 2022.
Stefan Rousseau
Naturally the economy came up in this week’s Prime Ministers Questions.
The poet Rudyard Kipling famously said “if you can keep your head, while those around you are losing theirs”. And never has that sentiment been truer than now. If we stay on this bold path to growth, Britain can stage a strong recovery. Stay as we are, in the comfort zone of borrowed billions, it’s a race to the bottom. After decades of living on the never-never, this country needs to boost its income. The economy’s got to get bigger - that's what growth is.
So how do we get out of this slow motion economic car crash we are currently in?
Well it reminds me of that classic Irish joke, which I think I'm allowed to do as a Dolan. A man stops an Irishman in the street, and asks for directions. The Irishman says “well if I were you I wouldn't start from here. And that's where we are with the economy”.
Who knew shutting down the country on and off for two and a half years, in a vain attempt to stop a seasonal respiratory virus, would bring with it consequences. Who knew that borrowing half a trillion, paying perfectly healthy people to stay at home, mothballing the NHS and closing schools and once viable businesses, would come at a price. Well I knew and called it out on the national television and radio airwaves and many of called it out too, but we were the bad people, remember?
It’s early days, but Britain is now on a path to high growth and low tax. The next crucial step is the shrink the size of the state. We spend too much money. The media, the political establishment and we the public have been seduced into the idea that the government can do everything, and most dangerously, that they can somehow guarantee our livelihoods. They cannot.
During the austerity drive in the coalition government, in 2010, credit to the Tories and Lib Dems who massively cut down the size of the state, which had swollen under new labour. Don't forget the note left by Treasury minister Liam Byrne who said to the incoming minister “sorry there's no money left”. But we WERE left with a bigger bureaucracy and an inflated bill for public services.
Mark Dolan
GB News
Over five years the government slashed and burned in every department, which they called austerity, but which was really, living within our means. Did unemployment spiral as we cut back the public sector? Far from it. A million new jobs were created in the private sector, in that five-year period. As anyone who runs a household budget knows, you cannot spend more than is coming in, but since the war, expectations about how much we can expect from the government, and how little we must expect from ourselves, has grown steadily.
Welfare was once a safety net. For many now, with a million job vacancies out there, it’s a lifestyle choice. The NHS was once for the treatment of unforeseen diseases and accidents, now it’s there to expensively manage our unhealthy lifestyles. It’s the national sickness service. Eat the pizza, smoke the fags, drink the booze, and the doctors will sort it out.
We've been living in a fool's paradise, accelerated by the pandemic, in which state took responsibility for our lives, not us. Well I'm afraid it's supposed to be the other way round. The government wiping your arse, is what we've had for decades and it's pushing us further into the red, and ultimately bankruptcy.
We're not alone, America is swamped by the scale of its own national debt and Europe is trapped in a centre-left economic model of social democracy, ripped to the tits, on the wacky baccy of tax-and-spend.
It’s now a western disease - big government, big debt, big problem.
Which is why it was perfectly reasonable for Liz Truss, Liz The Builder as I like to call her, to look at linking benefit rises to average incomes, that’s around 5%, rather than linking handouts to inflation, at 10%.
Why should those receiving help get double the pay rise, of those who get up early in the morning and go off to work. It should always pay to work. That said, given that we have wilfully trashed the economy with the obscene experiment of lockdowns, which has had a disproportionate impact on the poorest, I think the full inflation busting pay rise is inevitable. And a country, even when on its uppers, must protect the poorest in society. But in the end a big state, big government and big spending, doesn't help anyone. Especially when it all goes on the overdraft.
Which is why the prospect of a Labour government under Keir Starmer and a terrifying 70s style state-run energy company, pumping taxpayers billions into the experiment of flaky renewables, will sink us further into this quagmire. In the pocket of the unions, Starmer will yield to public sector paid demands and Britain would stagger closer to the abyss.
It's a painful truth and I wish it wasn't so, but the government cannot wrap us in cotton wool from cradle to grave. That was a lie, built on the backs of future generations, who have always picked up the bill. This ponzi scheme could have continued for a while longer, but spendthrift politicians overplayed their hand with Covid – the straw that broke the camel’s back. Or a heavy log more like it. With a low tax, small state, big economy and with a handsome national income, that's how you look after everyone in our society, especially the poorest. It helps no one, to tax and spend your way to oblivion.
Our exciting new prime minister needs to make some tough decisions, and the economy needs some tough love. And if you don’t like the sound of that, tough luck.