Look after the pennies, we over a certain age were taught, and the pounds will look after themselves. A reference to this discipline can be the only positive explanation of the clash between the three main political parties over their difference in views to the rise in national insurance. The Tory proposal to cancel labour’s proposed increase in NI contributions will mean a loss of Government income of £6 billion pounds, I will decline from printing this in full as the continual use of so many 0s will bring on my RSI, and the Parties have argued over whether this money could be raised by Government savings elsewhere and whether an increase in NI will or will not lead to a loss of jobs. With an annual deficit of £167 billion, our debts are increasing by £167 billion every year; this £6 Billion does not appear to be significant. And it probably isn’t.
No of the Parties, however, have the guts to spell out just how bad the situation is and that the only way out is going to be painful, at least to the majority. No doubt there are some that are so cushioned by their wealth that they will escape with nothing more than a slight bruise, but for the rest of us, the hard working and the feckless, “there will be trouble ahead”.
There seems to me to be two ways of reducing the deficit, and we shall only succeed if we follow both. This truth is known by everyone but the reckless feckless as this is the only way out of debt, whether you are Jo Bloggs or Gordon Brown. It doesn’t take a lot of intelligence to understand this so all three claimants to the Chancellor’s chair should be able to grasp this.
The first thing the country has to do is to stop spending so much, and the other thing is to try to earn more. Simples. The ability of the individual or the country to earn more does depend upon the costs of production, so the increase in NI is a step in the wrong direction. We need to increase our output both to export more and import less. Both of these will decrease the deficit, or at least lessen the effect of continuing increases in imported oil and gas costs.
The other essential step is to spend less. Ah, there’s the rub!
Whoever wins the next election has to dismantle much of the welfare state as we have grown to know. The art, and skill, will be to do it so as not to cause a total collapse. A game of JengaTM, with everything at stake.
I will include within the welfare state all that is managed by the public sector, not just the benefits system and health service. Anyone who has worked in any part of the public sector will have seen a huge amount of waste that could easily be dispensed with, so the 1%, the cost of the lost NI contributions, will be no problem to achieve. But the big gains can only be made by changing the attitude of those that work in or are elected officers of public sector organisations. My own experience of public service organisations leads me to suggest that the first action needs to be ending the belief within budget holders that they must spend this years budget or they won’t get so much next year. The fact that their pay scale can depend on the size of their budget means that any decrease in budget can have serious repercussions. Much more serious than overspending, in fact. The other attitude I have seen amongst local authority Managers is the opposition shown to calls for cuts by only identifying those that they know the elected officers will not support. Much better say that a cut will mean the closure of an old persons home than a few pieces of equipment won’t be replaced that year or a custom and practice dating back to the days of the horse and cart is tackled.
But, by far the biggest challenge for any of the parties, is the absolute need to change the moral attitude of a large number of individuals that they have a right for any of the services and benefits that are on offer and it is the Government’s fault when they don’t have these rights fulfilled. The fact that so many of those at Westminster have displayed these very same attitudes does not fair well for the challenge ahead, even if those who form the next Government are willing to face the challenge. A recent story in the Daily Mail, about a family with a large family all being brought up on an income of £42,000 a year, entirely from benefits, even if half true, is a measure of the challenge that the next Government must tackle. Allegedly, as they say, the “mother” was quoted as saying that she was happy to take the money- “I’m just working with the system that’s there”. Very much like the MP’s response “ I only claimed what I was entitled to”.
The Daily Mail couple were happy to go on having children if the rest of us were going to pay for their upkeep. Indeed they considered that they had a right to a bigger house, on the state, to accommodate their desire to have even more children. What working couple with a family and mortgage would consider that they had a right to a bigger house? Well perhaps the current financial situation, fuelled as it has been by those who have obtained bigger and bigger mortgages on bigger and bigger houses, is evidence that more than a few thought they had such a right, but others, perhaps remembering that other learnt truth- cut your coat to suit your clothe, will have limited their family size to their earned income.
Just how the Government will cut the benefits bill, as they must, will be the biggest challenge of the decade but if Brown, Cameron and Clegg don’t grasp the nettle next month then we are all in for a sorry future.
No comments:
Post a Comment