Beneath Contempt

We need to keep this as a reminder of what they really think

It's amazing listening to those metro-media prog con pundits seeking to excuse Brown's abominable behaviour in Rochdale. Apparently, we all get angry about things, he's under a lot of stress, and he was just having a bad day.

But that's not at all what the rest of us heard. What we heard was a two-faced bully who holds even his own supporters in contempt. Contempt for the perfectly reasonable concerns of a perfectly reasonable woman facing up to the real problems millions like her encounter in their day-to-day lives.

And whether Brown likes it or not, they are concerned about immigration. He may not want to discuss it, but out here, it's A Very Big Issue.

We've blogged this many times, so we won't do so again here. But there is one point worth reiterating.

Quite a bit of the commentary we've heard over the last 24 hours has focused on the point that we can't do much about immigration, because of our EU membership. But that is nonsense.

The truth is that from 1997 to 2008 (the most recent year for which we have comprehensive ONS stats), net migration into the UK totalled 2 million. Of that, just 0.5m came from the EU - including the new members like Poland.

Moreover, during that same period, a net 0.8m UK citizens left. Which means that net migration from countries outside the EU totalled an extraordinary 2.2 million:

And that is all migration we could stop.

Yes, of course we would want to make exceptions for genuine asylum seekers. And we might want also to make exceptions for some high skill workers (although we could just give them fixed-term work permits).

But that is nothing to do with our EU obligations.

In truth, the EU point is a cop out. It's yet another convenient argument for closing down discussion on immigration. Metropolitan prog cons don't want to discuss it, and they hold those that do in contempt.

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www.gudanggrosiran.com Categories: Gordo, Immigration, lies, politicos

Busted

I dare you to watch (you'll need to keep a sick bag handy)

Do you remember 1997?

Of course you do. Who could forget that brave new world? A new day had dawned, had it not. A new leader, a new beginning, and a new Chancellor. A Chancellor who admonished his debt-addicted predecessor thus:

"The Chancellor is first and foremost the guardian of the people's money."

Yes indeed, ladies and gentlemen - the People's Money. The money that belongs not to the selfish grasping rapscallions who earned it, but to The People.

"During the 1990s the national debt has doubled. This year alone the taxpayer will pay out £25 billion in interest payments on debt, more than we spend on schools. Public finances must be sustainable over the long term. If they are not then it is the poor, the elderly, and those on fixed incomes who depend on public services that will suffer most. So, as with our approach to monetary policy, so in fiscal policy: we will now establish clear rules, a new discipline, openness, and accountability.

My first rule - the golden rule - ensures that over the economic cycle the Government will borrow only to invest and that current spending will be met from taxation.

My second rule is that, as a proportion of national income, public debt will be held at a prudent and stable level over the economic cycle. And to implement these rules, I am announcing today a five year deficit reduction plan.

Together, these rules and this plan will ensure a historic break from the short-termism and expediency that have characterised the recent fiscal policies of our country. As with our monetary policy, our fiscal policy will be all the more credible for being open and accountable."

Yes, that really is what he said.

And here we are 13 years later, with debt that has already doubled again, and which is set to double again by the end of the next parliament. And debt interest payments that within a year or two will again exceed the hugely increased schools budget.

As for ensuring "a historic break from short-termism and expediency", he did that all right. Entirely disregarding short-term considerations such as red signals, and matters of expediency such as staying alive, he cranked the controls to max and slammed us into the buffers at speed. From where recovery will be a very long-term undertaking indeed.

Of course, Brown also made a number of other ludicrous pledges during those first golden months. And one of the central ones was to lift the UK's productivity levels up to those of our more successful competitors. As he put it in his 1998 budget:

"..over the next few years we must seize this opportunity - by challenging ourselves to lift our productivity in each and every industry towards the levels of the world's best...

Breaking free from old ideas of state control and crude laissez-faire, our new ambition for Britain must be... to implement for our country a medium term strategy for growth."

Not the failed Wilson National Plan, you understand, nor the failed Callaghan industrial policy with its National Enterprise Board. No, a medium term strategy for growth - something brand new and whizzo and totally 21st Century. Which is how we got all those incredibly complex and expensive arrangements like R&D tax credits.

So how do you reckon it's worked out? How do you think we've done in the international productivity league tables under Labour?

As it happens, the ONS has recently given us an update. And needless to say, it doesn't look good.

Here's the summary chart, showing UK output per worker relative to G7 average (ex UK). As we can see, despite all the huffing and puffing - and expense - there was virtually no improvement between 1997 and 2008:

Now, you might say thank God. At least Labour didn't make productivity worse.

But you should note that the ONS numbers only go up to 2008, and we know that UK productivity fell during 2009. In fact, according to the ONS itself, output per worker fell by 3.1% in 2009 compared to 2008. So watch this space.

It really is amazing how apparently intelligent people can still recall 1997 with such fond memories (eg Victoria Coren on last night's Question Time). 13 years of Labour deceit and wishful thinking have left Britain crumpled up in a busted heap. Crushed under a pile of debt and economically prostrate.

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www.gudanggrosiran.com Categories: Gordo, new labour, productivity

A Man Without Honour

Are the cameras rolling?

Even by his own shameful standards, Brown's performance yesterday at the Chilcot enquiry was a shocker:

“Every request that the military commanders made to us for equipment was answered. No request was ever turned down.

We had a rising defence budget... The spending review of 2004 was welcomed by the chiefs of our defence staff. They were satisfied at the end of the review that they had the resources they needed.”

Unsurprisingly, our retired military leaders beg to differ. Lord Guthrie, ex-chief of the defence staff, says:

“He cannot get away with saying I gave them everything they asked for, that is simply disingenuous... To say the outcome of that process was ‘welcome’ is frankly hyperbole.”

Former head of the Army General Sir Richard Dannatt says:

"It is astonishing and offensive to suggest that if officers had had a choice, they would have chosen the Snatch Land Rover...

Gordon Brown bears responsibility, claiming credit for increasing funding when actually there was a reduction in value."

Ah, responsibility - a concept entirely unknown to the Great Helmsman. From the first moment he became Chancellor we discovered his total inability to take responsibility. Whether it was his destruction of final salary pensions for all but public servants, or his gross mismanagement of the public finances, or his disastrous financial regulatory system, he has never ever accepted that he might have got something wrong. His disasters are always someone else's fault.

And he's turned the abuse of statistics into a high art, painting rosy idealised pictures that have nothing whatsoever to do with the real world. Which is what he did again yesterday.

So let's take a closer look at those defence spending claims.

As usual, this turns out to be incredibly difficult. Under Brown, the government has deployed so many statistical smoke screens, it's very easy to lose track of what's going on. For example, in 2008-09 the official MOD website offers no fewer than three possible figures for defence spending. You can choose between:

• Defence spending "consistent with HM Treasury guidance", which comes in at £38.6bn; or
• Departmental Expenditure Limits (DEL), which comes in at £45.5bn; or
• Net cash requirement, which comes in at £36.4bn

And if you don't like any of those numbers, you can turn to HM Treasury which offers a further range of alternatives. For example, its supposedly definitive Public Expenditure Statistical Analyses 2009 (PESA) says defence spending in 2008-09 was £37.1bn. Well, that's what it says on page 74 anyway. But on page 29, it says it was £44.8bn. That figure purports to be the DEL basis, even though it's different to what MOD quotes for the same thing.

So after a couple of hours scratching your head, all you can really say is that defence spending in 2008-09 was somewhere between £36.4bn and £45.4bn, a 25% margin of obfuscation.

And when it comes to using official government numbers for comparisons over time, well, you can just forget that. The defence spending stats have had even more breaks and definitional changes that this government's notoriously rubbish crime stats.

Not for the first time, we need help from overseas. And fortunately for us, the statisticians at NATO publish data on defence spending across all their members on a broadly consistent basis. And even more fortunately, BOM's old friend Ted Bromund at the US Heritage Foundation has crunched all the numbers and reached some dependable conclusions. And Ted begins by making a crucial point:

"The best way to assess the level of national effort devoted to defense is to measure defense spending as a percentage of GDP. Comparisons of amounts of money over time are rendered meaningless by inflation, especially given that defense costs tend to increase more rapidly than costs in the civilian economy... Measuring defense spending as a percentage of GDP offers a stable and reliable yardstick."

This is a direct echo of the point being made by our defence chiefs today - what matters is not the money we put into defence, but its buying power. Defence costs have always risen more quickly than the general price level, reflecting the increasing sophistication of kit, and the fact that troops pay must be kept at least in line with average earnings, and they generally rise faster than prices. Looking at defence spending as a percentage of GDP is a much more realistic yardstick (albeit still not perfect).

So how has Labour done? Here's Ted's helpful chart (click on image to enlarge):

As we can see, although in strict technical weasel terms Brown is correct in saying that defence spending rose, that is only true when judged against the general price level in the economy - not the actual price of defence purchases. As a percentage of GDP, defence spending has fallen from 2.9% in 1996 to 2.2% in 2008. Ted says:

"What happened after 1997 was extraordinary. From 1999 onward, Britain's armed forces were regularly in action, first in the former Yugoslavia, then in Sierra Leone, then in Afghanistan and Iraq. Yet British defense spending as a share of GDP continued to decline...

The Labour governments have evaded the fundamental dilemma posed by their belief that... savings from increased efficiency were to allow the forces to do more with less. This ignored two factors. First, defense costs, especially for procuring advanced systems, are notoriously prone to rise faster than the rate of inflation. In Britain, one Royal United Services Institute expert estimates that defense costs increase 5-10 percent faster than inflation in the civilian economy. Second, while claiming that efficiency gains will materialize in the future is easy, actually achieving them is difficult, especially in government."

BOM readers will be familiar with Brown's repeated but entirely bogus claims to have saved billions through his so-called "efficiency programmes" - we've laughed hysterically about it many times.

But the difference here is that men have died as a result. Our woefully under-equipped troops have been put in harm's way because a loathsome self-righteous charlatan refused to pay for the kit they needed to do the job.

And today, this appalling man has gone to Afghanistan on a grandstanding photo op - a cynical ploy to counter the condemnation he's getting from our professional soldiers.

It makes you want to throw up.

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www.gudanggrosiran.com Categories: defence, Gordo

Her Majesty's Worst Ever PM

Little did she know...

[Many apologies - the initial version of this post omitted PM Heath altogether. Can't imagine how I left him out]

You can't help wondering what Her Majesty thinks of the arrogant dunderheads she's had to deal with since her Coronation in 1953. Since she came to the throne she's had 11 Prime Ministers, and almost without exception, they have all fallen short.

In her name, and without a shot being fired, they have surrendered large chunks of national sovereignty to a fascist superstate ruled over by the very people we'd spent the previous thousand years defending ourselves against. They have taken Britain into illegal wars bringing nothing but pain. They've watered down our criminal justice system and permitted a massive upsurge in lawlessness. They've dumbed down our education system, destroyed our work ethic, and undermined our cultural integrity. Her Majesty's great-great grandmother would have been seriously unamused.

But until now, she has at least been able to console herself with the thought that her subjects have benefited from an unprecedented rising tide of material prosperity. With one or two slight hiccups along the way, living standards have risen continuously throughout her reign. Overall, GDP per capita has trebled, an average annual growth rate of 2% pa. It has been an achievement without parallel in British history.

Moreover, every one of her Prime Ministers - every single one - has left average incomes higher than they found them.

Well, every Prime Minister until now, that is.

For the first time ever, Her Majesty has a Prime Minister who has presided over a fall in GDP per capita - and not a small fall either. Since the idiot Brown took over less than three years ago, per capita GDP has fallen by a catastrophic 5%.

Here's the complete Prime Ministerial record up to end-2009 (per capita GDP at basic prices; ONS data and BOM calcs):

Churchill (1953-55) +7%
Eden (1955-57) +2%
Macmillan (1957-63) +15%
Douglas-Home (1963-64) +4%
Wilson (1964-1970 and 1974-1976) +15%
Heath (1970-74) +12%
Callaghan (1976-1979) +7%
Thatcher (1979-1990) +26%
Major (1990-97) +13%
Blair (1997-2007) +27% (yes, on this measure, he beat Thatcher)
Brown (2007-2009) -5%

Please take a moment to absorb that list. Brown's record is miles worse that Callaghan's - despite all those Red Robbo strikes and the Winter of Discontent. And it's miles worse that Eden's - widely reckoned to be our worst post-WW2 PM.

Indeed, the damage suffered under Brown has been so extensive, average incomes have now fallen back to their level five years ago - the most dismal five years we've seen since the Coronation.

HM is no fool. She must be well aware what a complete dud Brown is. And just like the rest of us, she must watch the news, wondering HTF such an idiot can possibly be catching up in the polls.

But unlike the rest of us, she can't really leave if he gets back.

Instead, she'll have to sit there listening to another five years of his bullying lectures as her kingdom sinks into the abyss.

Off with his head!

PS The 1953 Coronation is Tyler's first memory. He watched it in a community hall alongside maybe a couple of hundred others. All staring at a 12 inch black and white telly. Kids today - they don't know they're born.

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www.gudanggrosiran.com Categories: economy, Gordo, politicos

And The Governance Was Without Form, And Void

Yesterday the Major had another of his increasingly frequent seizures. Comrade Brown claiming to be the champion of the middle class was just too much:

"How dare he! He's spent the last 13 years hunting us down like dogs! He's taxed us to buggery, destroyed our pensions, stuffed us with debt, banned our children from the top unis, dishonoured our womenfolk, seized our lands, burned down our golf clubs... and now he has the sheer brass neck to say he's our friend! Gaaaaaah!!!"

Of course, you and I understand that Brown was simply delivering another helping of meaningless pre-election drivel that will convince no one. But the poor Major takes these things to heart. He still clings to a quaint old-fashioned notion that Prime Ministers are meant to speak truth unto the nation - even when it's unpalatable.

And maybe Brown has dragged his office down to new depths of moral decrepitude, although following Bliar, that seems improbable. Much more worrying is his obvious and painful inability to fill the space. However you look at it, he simply isn't up to the job. His presence has created a dangerous dysfunctional void at the heart of government.

This morning we get an alarming new account of the void from a group of 60 senior civil servants from across Whitehall. They've contributed to a study by the Institute for Government, and here are some of their comments:

“What comes out of No 10 is lots of barmy ideas. It’s the worst possible kind of policy making, which is ‘here is a problem, let’s have a kneejerk reaction to it tomorrow on what we’re going to announce’ and quite frankly the less contact with No 10 the better.”

“All the worst bits of policy making come from the centre. It’s these people who think you change the world by publishing a strategy. And you don’t change a thing by publishing a strategy, it makes no difference whatsoever.”

“It’s no great secret that Gordon is not strategic...a cacophony of silence and confusion... The centre [No 10] is certainly dysfunctional and the Cabinet Office is fragmented.”

“It’s worse than under previous prime ministers. With Blair they did invite you to meetings, but not with Brown. They contracted into a little bunker. I had a very good working relationship with Downing Street under Blair but that changed when Brown came in and it contracted to a very small circle of people. You just got orders from Downing Street, not consultation, and that is still continuing today.”

Now OK, these people are civil servants and they have their own axes to grind - including greasing up to their prospective new masters. But what they say squares very closely with what we see out here: a stream of increasingly preposterous announcements about meat soon coming off ration and happiness for all, the grabbing of every available grandstanding opportunity, and a total failure to address any of the huge pachyderms rampaging round our wrecked national room.
 
So what to do?
 
Well, ditch hopeless Brown asap, of course. But apart from that?
 
The Civil Servants have a suggestion:

“The office of the British prime minister holds a concentration of formal power greater than that of almost any other country in the developed world.
 
In contrast, the fragmentation and lack of co-ordination at the centre of the civil service — the Treasury, No 10 and the Cabinet Office — leads to an administrative centre that is relatively weak. This curious situation has created a strategic gap at the heart of British government which inhibits the ability to set overall government priorities and translate them into action.”

Hmm. I think we can see what they want. A stronger centralised bureaucracy to balance the huge power of the PM.
 
To which we say, not on your nellie.
 
Yes, we can all agree that the British PM has far too much power - more than any of his counterparts in other major developed democracies. But no, we don't want to counterbalance that with a stronger unelected bureaucracy, thank you very much.
 
What we need - as we've said before - is first, a stronger legislature to counterbalance the power of the executive (we still favour a directly elected President, formally separated from our elected MPs - like the US), and second, radical decentralisation - most especially on the fiscal front.
 
Centralised power on the extraordinary scale we've got in the UK is always a threat to our liberties and our prosperity. But when the hot seat is filled by an inadequate like Brown, our entire system of government simply seizes up.
 
Now, WTF do we find a bold radical leader who is big enough to fill the space, but humble enough to know he has to give his power away?

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www.gudanggrosiran.com Categories: constitutional reform, Gordo, whitehall

Labour's Debt Explosion

When the unelected idiot Brown took over in 2007, the UK's official government debt stood at 47% of GDP. By the end of 2011 it will be 94%, a literal doubling over just four years. Under his incompetent management, the UK will have clocked up the biggest increase in debt of any major OECD economy.

So says the OECD itself in its latest World Economic Outlook (see here Annex Table 32).

But remember: the OECD's debt measure excludes most of our off-balance sheet Enron debt, like PFI and public sector pensions, which roughly double the final total. And it also excludes the trillions in guarantees given to our busted banks, whose most toxic chickens have still not finally come home to roost.

Labour always always burns our money - we know that. But even in Labour terms, Brown is the idot's idiot. Not only will he be leaving us our worst peacetime debt burden ever, he's also given his name to the famous Brown Bottom in the gold market - the time he flogged off our gold reserves when the market was at its lowest level for two decades (see this blog).

We don't know exactly what price he got for our 400 tons, but the market price at the time was below $300. And since the price is now over $1100, Tyler's fag packet says Brown's arrogance and stupidity lost us well in excess of £6bn.

Although admittedly, measured against what he's now done to us, £6bn pales into insignificance.

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www.gudanggrosiran.com Categories: debt, Gordo

More Of Your Cash Wibbled Away

I'll give you £1.5bn if I can wear the Big Hat

Never mind that we are stoney broke, the arrogant unelected clown masquarading as our PM has just blown another £1.5bn of our money in an attempt to buy himself some international status:

"At an EU summit in Brussels, the Prime Minister offered to pay the money into an EU fund intended to help poorer countries to cut their carbon emissions.

The offer will make Britain the largest contributor. France and Germany each promised around £1.2 billion to the EU fund, which will be worth around £6.5 billion in all."

Just so we're clear, Brown has agreed that we will pay 23% of the EU total, even though we only account for 13.6% of EU GDP. In other words, we are paying 70% more than our fair share.

And what is this fund anyway? How will it be spent? How much will get eaten up in the EU bureaucracy? Which wibbletech companies will get the orders? And which African dictator's Swiss account will benefit most? We know only too well what history tells us, but don't hold your breath for answers from Brown.

Meanwhile, the £180m pa tax-funded Met Office has published its latest scare story for Copenhagen:

"Global temperature for 2010 is expected to be 14.58 °C, the warmest on record."

Not one, but two places of decimals. That really is arrogance.

Of course, given enough computers, even the most blinkered monkeys will eventually hit the right answer. But we still suggest you note that prediction for future reference.

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www.gudanggrosiran.com Categories: eco wibble, Gordo

Head And Heart

Socialists have always speechified from the heart... even in March 1945

"The Conservative Party want people to believe that the ballot paper has an option marked change without consequence... But the financial crisis forced them to show their hand and they showed they had no hearts."
Brown to the Labour Conference today.

No hearts.

You see that's the thing about socialists - they somehow imagine that anyone who isn't a socialist doesn't have a heart.

They are the Good Guys, and on that basis they feel able to order your world, to relieve you of your freedoms and your cash, to subject you to substandard services, and to denigrate the whole concept of personal responsibility. It's a worldview that undermines prosperity, limits personal achievement, and corrodes the social fabric. But at least their hearts are in the right place.

I was going to blog Brown's speech, but frankly I can't be bothered.

On a day when we're all horrified by the latest catastrophic failure of Labour's PC police force to protect ordinary people in their own homes, who cares what Brown has to say about new flavours of ASBO? Who cares about his promises to set up re-education camps for teenage mums, or his new control orders for 50,000 problem families? Who cares about his U-turn on 24-hour drinking?

Who cares about the dozens of random new spending pledges he made? Or the fact that he doesn't actually have the money to deliver any of them?

And who cares that he's still telling the same old lies about how he saved 500,000 jobs, and how the Evil Tories would have let the financial system collapse, and how the ETs want ordinary hard-working people to live in ditches?

That's the funny thing about your heart ruling your head. It excuses not just wholesale incompetence, but it also lets you tell the most monstrous porkies. When your heart is big and you're the good guy, it seems you can do what the eff you like.

PS At least Andrew Neil got a grip on the slimey Liam Byrne and the slippery Mandy this pm as they attempted to spin Labour's record of lies and evasion on the economy. "Where did that figure of half a million saved jobs actually come from, given that the Treasury have disowned it? How can you claim you saved the economy when your fiscal package was so small (see this blog)? Why should anyone trust Brown on cuts when until this month he denied there'd even be any - even though they were already assumed in his spending plans?"

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www.gudanggrosiran.com Categories: Gordo

Losing The Will To Live

The set for next year's Labour conference

Listening to a sweaty Gordo blustering his way through this morning's session with Andy, it was easy to understand why Labour has lost the will to live. It would have been bad enough getting bludgeoned by Gord when they were all still on the winning side, but now they can hear the guns a few streets away it must be intolerable.

In fairness to Marr, he did have a go at asking a few questions. But as per, he wasn't much good at pinning down the answers. In particular, we could have done with a whole lot more clarity on the great question of the age - spending cuts.

As we understood it, Gord's argument goes like this:

• because of his epoch-shaping prudence while at No 11, the UK entered the recession (which was incidentally caused entirely by those idiotic yanks) much better equipped than other countries;
• compared to our profligate competitors, UK government debt was low, allowing him plenty of scope to support the economy via fiscal reflation - ie a package of tax cuts and more spending financed by borrowing;
• every other government in the world has since followed his glorious reflationary lead;
• only the Evil Tories would not have reflated as he did;
• the Evil Ts want to slash spending - they will relish the opportunity to destroy frontline services and execute expensive old people;
• in contrast, he will make the necessary Tough Choices via greater efficency
• everything will come right - you'll see

Marr did have a go at parrying some of this guff, but he left a lot out. And since it's important to have the complete picture, for future reference here are the Key Facts (all blogged previously):

1. While we entered the recession with relatively low official debt (47% of GDP compared to an OECD average of 74%), our massive current borrowing means that by the end of next year the gap will have virtually disappeared; moreover, our official debt excludes all those unfunded public sector pension liabilities (about 70% of GDP), and the bulk of our PFI debt (another 7-8%)
2. According to the OECD, both this year and next, the UK government will be borrowing more (as a percentage of GDP) than any other government among the OECD's 30 member states. When it comes to government borrowing, the OECD's basket case is not Ireland or Iceland or Italy or Greece, but us.
3. Brown's much hyped fiscal reflation package (mainly the temporary VAT cut) wasn't nearly as big as he likes to boast; indeed, it was actually one of the smallest among all the major economies; according to the definitive OECD analysis, for the period 2008-2010, it amounted to less than 1.5% of GDP, compared to an average 3.7% (the US package was worth 5.6% of GDP)
4. By far the bulk of fiscal support in the UK has come not from Brown's discretionary policy measures, but from the operation of the so-called automatic stabilisers (ie lower tax revenues and higher unemployment benefits); Here's the OECD's picture:


5. The fundamental reason our fiscal deficit is shot to buggery is not the recession, or Brown's reflationary package, but his reckless overspending while he was Chancellor; public sending was allowed to soar on the back of temporary and unsustainable tax revenues from the financial and property bubbles; which is why the OECD reckons our structural deficit (ie the bit that won't automatically disappear when the recession ends) is now in excess of 10% of GDP - a very scary position which implies public spending needs to be cut (or taxes increased) by a bowel-rending £140bn pa
6. Hoping to save that kind of dosh through greater efficiency is entirely delusional: as we've blogged many times, even the famous multi-year Gershon programme only seems to have saved aroung £5bn, at most.

Those, I'm afraid, are the grim facts.

And those same facts must be painfully clear to Darling's boys as they count off their final hours huddled round the map tables down in the bunker.

Maybe they haven't plucked up courage to tell the Führer to his face.

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www.gudanggrosiran.com Categories: cuts, Gordo

Brown's Secret File

Only watch if you want to scream

Aside from confirming the bleedin' obvious - that we are currently ruled by a barefaced liar - what else does the leaked HM Treasury file tell us? In particular, what does it say about the extent and shape of Brown's planned spending cuts?

Here's the critical spreadsheet, dated 21 April and fully consistent with the less detailed projections published with the Budget. Which is a crucial point. These figures are not some blue-sky scenario doodling - they reflect the Budget decisions actually made by Brown's government (click on image to enlarge):

Key points:

• Cuts - Just as the IFS worked out months ago, the budget incorporated big cuts in Departmental Expenditure Limits (DEL). DEL constitutes well over half our total public spending, including most of what we spend on the NHS, education, defence, and law and order. From 2009-10 to 2013-14, the Budget imposed a total cut across these programmes of 9.3% in real (inflation adjusted) terms. Not that you'd have guessed that from the lies spun by Brown and his wicked gang.
• Social security - after a projected 8.3% real increase this year, the Budget assumed further growth of just 6.3% over the whole of the next four years. With unemployment already up by 1 million since the downturn began, that is implausibly low... unless of course, the spending projection incorporates some undeclared cut in benefit rates.
• Debt interest - projected to more than double in real terms by 2013-14, reaching £64bn (this year's figure is put at "just" £27bn). As a percentage of GDP, it soars from just under 2% this year to 3.5% in two years time. Even so, the projection looks optimistic because not only will debt increase faster than the budget assumed, but also the average interest rate on that debt is most unlikely to decline, as we now know the Budget assumed (an assumed decline from 5% in 2008-9 to 4.6% in 2013-14).

So what should we conclude?

First, we've been lied to. Again.

Second, cutting departmental spending budgets by 9.3% will not be enough. We reckon spending on social security and debt interest will significantly overrun the HMT projections, implying the need for further cuts in departmental spending limits. Moreover, the Budget target to halve the deficit is insufficiently ambitious - the financial markets will not allow us to persist with a structural deficit of 5% of GDP indefinitely.

As St Vince told us only yesterday, a more realistic cuts target would be £80bn pa. Which, if it came entirely from departmental spending limits, would imply a cut of more like - gulp - 20%, more than double what Brown has been planning. Of course, departmental budgets could be spared some of that, but only if social security benefit rates got cut instead (hence the gathering pressure to cut "middle class welfare" such as Child Benefit).

But there is some good news: at least now we are starting to have a public debate about what to cut, rather than a yes/no slanging match about who's going to cut and who isn't.

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www.gudanggrosiran.com Categories: cuts, Gordo

Cuts? That's Not A Cut

So Gordo has done a complete U-turn (see here for excellent ConHome vid). He always promised Labour investment, but now he's delivering Labour cuts.

Except that all he actually said was:

"Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets. But when our plans are published in the coming months people will see that Labour will not support cuts in the vital frontline services on which people depend."

Hmm.

Costs, inefficencies, and unnecessary programmes - they don't sound much like the kind of the cuts the rest of us are talking about. And they don't sound much like the kind of cuts that would eliminate our £80-£150bn fiscal black hole (eg see this blog).

As all the serious cuts proposals tell us, squeezing the public sector pay bill will be absolutely central to any meaningful programme. But union-funded Labour absolutely cannot undertake such a squeeze. Period.

We are right back to 1979. Labour cannot confront the public sector unions, and the public sector unions - entirely understandably- will not accept a serious squeeze on their members.

At least we only have another 260 days to go.

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www.gudanggrosiran.com Categories: cuts, Gordo, new labour

Not A Bad Dream

Aren't they supposed to be green?

After a week dependent on BBC World for his news, Tyler had begun to wonder if it had all been a bad dream. Surely the BBC wouldn't be focused exclusively on environmental issues, arts projects in Africa, and celebrity gossip, if the world was really in economic meltdown.

On the plane back, five minutes with the Daily Mail reassured him he hadn't been dreaming. If anything, things have got even worse.

So what have we missed?

First, those green shoots have been cruelly blasted by the heatwave. The CSO says that when last sighted, GDP was still spiralling down. It fell by a scary 2.4% in Q1 (9.3% annualised):

So in the first year of Brown's slump, GDP has fallen by 4.9%. That's three times worse than the 1.6% decline in the first year (1990-91) of Major's recession. And 50% worse than the 3.3% fall in the first year (1979-80) of Thatcher's recession.

In other words, nomoreboomandbust Brown has smashed our economy far more comprehensively than most of us have ever experienced in our entire lifetimes.

Worse, whereas Thatcher and Major could both argue they'd simply been the unfortunate inheritors of someone else's recession, this one is of Brown's own making (yes, yes, I realise there are also global factors at play - but there always are).

So what else?

Well, the "government" is continuing its policy of rule by porkie pie. They have decided to ditch their scheduled review of public spending (the Comprehensive Spending Review), claiming that nobody knows how the economy will be in 2011.

The real reason of course, is that this side of the election they do not want to admit to the savage public spending cuts any government will have to make. It fools nobody, but since they are going to lose the election anyway, they presumably intend to spin the inevitable cuts as Tory Cuts made by The Evil Tories specifically to Grind The Faces of The Poor. Labour would never have done it.

Just how dumb do they think we are?

Meanwhile, the row between the government and the Bank of England is bubbling up quite nicely. As we've blogged before, the Bank thinks the government needs to get real about the dire fiscal outlook. They know only too well what happens once the markets lose confidence in a government's commitment to living within its means (cf the lamentable performance of H Wislon).

They're also concerned that Brown still hasn't understood just how pants his tripartite system of financial regulation actually is. They want their pre-97 powers of bank regulation restored - as do most outside commentators - whereas Brown is mainly concerned to save his own face.

His latest face-saving wheeze is to sell the Crock to Tesco. Not only would that show that his period of temporary public ownership really is temporary, but it would actually raise some much-needed cash.

Ah, but hang on a cotton-pickin' minute... will Tesco be taking the whole shebang, warts and toxic loans and all?

Er, no. Tesco will take the good stuff - ie the retail customer base - and we'll get left with all the rubbish. Which is more or less the self-same deal Branson and others wanted to do last year. The deal that stuffs taxpayers with all the losses, and none of the potential upside from the good bits.

You know, I'm so relieved I wasn't dreaming any of this stuff out there by the pool.

More to follow once I've caught up.

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www.gudanggrosiran.com Categories: cuts, debt, Gordo, politicos, slump

Walking Away

Gordons do not walk away

Many apologies for two days without posts. You're not interested in excuses - Tyler simply walked away from his duty. Or as this email puts it:

"Dear sir,

If you do not post at least once a day, please do try to convince me that your heart and soul are in this blog. You miss many opportunities to score points against our enemies and seem to display a laziness born of financial comfort which most of your followers cannot afford. Do your duty or else please stop imploring others to do theirs."

Thank you NS - I needed that. Admonishment duly received and understood.

As it happens, we know someone else who frets about his duty. A couple of weeks back, after a particularly gruelling run-in with the real world, he told us he would not walk away:

"I will get on with the job. I have faith in doing my duty ... I believe in never walking away in difficult times."

Admirable. The authentic fighting spirit of Gordon of Khartoum. He certainly didn't walk away: it's what made the Empire great.

Except that by yesterday, our modern day Gordon was reconsidering - maybe walking away wasn't such a bad option after all:

"To be honest, you could walk away from all of this tomorrow... I wouldn't worry if I never returned to all those places - Downing Street, Chequers ... And it would probably be good for my children."

To walk, or not to walk, that is the question. A classic struggle between duty and personal survival.

Ah, but what is this duty he's fretting about?

Clearly, it can't be duty to country. We never voted for him, he's taking us into a fiscal and economic abyss, and he's got the lowest poll ratings since the Sheriff of Nottingham. Virtually everyone agrees he should go now, and we'd all thank him for it.

So that can't be the duty he's worried about.

And it can't be his duty to the Labour Party, either. On BOM, we have no interest in Labour's survival, but it's pretty obvious Gordo's driving them to destruction. As the excellent Daniel Hannan puts it this morning:

"You don't have to be a spin doctor to see what Gordon Brown is doing to his party's popularity. He has taken Labour to a share of the popular vote it has not registered since before universal male suffrage, when it was a tiny band of trade-union-sponsored candidates. Anyone – anyone – would make a more electable leader, even Michael Foot, if the old boy could be persuaded to come out of retirement.

By hanging on, the party is repeating the mistake of John Major's Tories in the mid-1990s, trying the patience of an angry electorate, purchasing each day now at the cost of a week in eventual Opposition.

So why would Gordo want to destroy the Labour Party? Hannan reckons it's all a plot by Mandy and others to keep Gordo there just long enough for the Irish to ratify the EU constitution.

But there's a much simpler explanation - like so many driven control freaks, Gordo simply cannot accept that he has failed.

The duty he frets about is the duty to his own self-image as someone who never fails.

Of course, given the manifest failure all round, he can only sustain that self-image by persuading himself that things are somehow going to get better. Which is why he's spun that little world for himself that bears no relation to the one the rest of us inhabit.

Take this statement of his in yesterday's Grauniad interview:

"The Tories have made, for them, a cardinal mistake in that they admitted the truth - that if you take 10% off the health service or schools or policing, you've cut into the jobs, the services, the expectations. The Conservatives' mask has slipped. They cannot be a centre ground party any more, they can't talk about being mainstream. The choice has become a lot clearer."

Which must be a great comfort to him. Except of course, the Tories have specifically promised not to cut health spending (a serious error on our view - see previous posts). Gordo has chosen not to notice.

Neither has he chosen to notice that his own government is also planning to slash public spending after the election. According to him, they won't need to cut:

"No. It's a myth. Public spending will continue to rise. It's in our figures. We've costed it, and you're paying more in top rate tax to pay for it."

A myth? The guy's either the biggest liar since Doc Goebbels, or he's lost the plot.

As everyone else knows by now (and as we blogged here), under his published plans, public spending is set to fall after the election (ie after stripping out inflation). And spending on public services (health, schools, policing etc) is set to fall especially sharply (by 2.3% pa in real terms, according to the IFS). His tax increase for the undeserving rich comes nowhere near enough to fund continued spending growth.

From Hitler to the boss of Northern Rock, the heads of big organisations often get into situations like Gordo. They have failed, but they cannot bring themselves to recognise and accept that failure. So they cling on, despite the fact that virtually everybody wants them to go, and the stress is taking a terrible toll on their own health.

A few weeks ago there was a rather upsetting interview with Sir Stuart Rose, the beleaguered head of Marks and Sparks. He's always been a much more convincing presenter than Gordo, he has achieved much more than Gordo, and unlike Gordo, he was actually elected to his current post (by shareholders). But despite that, since the recession took hold, he's gone from hero to zero, and he's facing exactly the same kinds of pressure:

"It was a terrible year, you've no idea... it was the worst year of my life... but I believe I've come out and I'm stronger for it... Recently I've been looking at my garden, watching it grow. I've been standing there for two or three weekends in a row, looking at the buds... I now just live on my own and I don't have a relationship with anybody... you do feel a little bit of a vacuum in your life...

I said to myself this Christmas, I want to start doing more things for myself... M& S has completely eaten up my life... There have been times when it has been more than I wanted, but what can you do? When you're in, you're in."

It's that duty thing again, and you can feel the pressure crushing down on him.

But at least Rose knows his time's up, and he's got to go.

The really alarming thing about Gordo is that he simply doesn't understand that. And instead of accepting reality, he's now attempting to govern Britain on the basis of the fantasy that exists only inside his own head.

Scary.

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www.gudanggrosiran.com Categories: Gordo

Government By Porkie Pie

Brown's performance at yesterday's Prime Ministers Questions was breath-taking. Does he really think we'll believe his lies about future public spending growth (see previous posts eg here)? Does he really think we're that dumb?

The Major and I have been trying to remember if Gordo has ever told us the truth about anything. Consider his record:

• 10p tax rate fiasco - lied
• Abolished boom and bust - lied
• Government debt - lied
• EU constitution referendum - lied
• Immigration - lied
• Climate change - lied
• Choice of Chancellor - lied
• Abandoned election - lied

Frankly we're struggling, although the Major suspects this may be true:

The Prime Minister (Mr. Gordon Brown): "This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today."

So why does he lie so much?

Yes, we understand he's a liar, and that's what liars do. But surely he must have some inkling of how his lies land with the rest of us. Surely he couldn't have climbed to the top of the greasy pole without having at least some inkling. Could he?

And he's got so bad at it. In his early days as Chancellor he used to lie all the time, but he was better at it. His double-counting and dense statistical mendacity had a certain class - it was the work of a craftsman.

But now he's just pants. His lies about public spending growth are so thin and easy to disprove. Frankly, it's pathetic to behold.

The real question of course is whether he himself understands the difference between truth and lies. As we've said before, the scariest possibility is that he actually believes his own version of reality.

The rest of us may hear the Governor of the Bank of England, the Institute of Fiscal Studies, the credit rating agencies, and at least 364 economists, saying spending cuts are essential to save Britain from the knacker's yard. But Brown may simply believe they are all wrong.

Like many a scary control freak before him, he may think he's the only man who understands the real truth.

PS Yes, there was that other PM who ignored 364 economists, and was subsequently proved right. But Tyler remembers that other PM, and despite his photo-op on the No 10 doorstep, Mr B is no Mrs T.

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www.gudanggrosiran.com Categories: Gordo

Electors Have A Clear Choice - Truth Or Lies

One immortal soul heading downstairs

"This is the day when the Conservatives have revealed their true manifesto for this country. There can be no doubt that the choice, whenever it comes, is between a Government prepared to invest in the future and a Conservative Party that is going to cut."

So said our OMG-is-he-still-there "leader" at PMQs today.

What on earth is he talking about? In the most recent Budget, his own Chancellor - second-choice Chancellor though he may be - gave us the biggest public spending cuts since Labour's last biggest public spending cuts in 1976.

One explanation is that poor Mr Brown genuinely believes his Government is not planning to cut. After all, down there in the bunker he's had a lot of harrassment lately, and the good Doc reckons he really could be cracking up. It's quite possible he simply doesn't understand how bad things are, and thinks those twenty fresh divisions he's going to hurl against the Russkies actually exist.

So in a spirit of helpfulness may we remind him what Darling told us in April (also see this post, and note that some of the following figures are lifted from the excellent IFS analysis).

Darling said that spending will increase from £671bn this year to £752bn in 2013-14, which were the numbers Gordo repeated today. But of course, those are cash figures - not discounted for future inflation - and they include the temporary pre-election spending boost.

If instead we concentrate on the period post-2010-11, and adjust the cash numbers for Darling's own forecast of inflation, we find a rather different picture. Overall spending falls by 0.1% pa. But within that, debt interest and welfare benefits will unavoidably grow strongly. Which implies that Darling is planning Big Cuts in other areas.

Here's the IFS's summary of Darling's spending plans post-2011:

So as we can see, spending on debt interest explodes by 8.4% pa in real terms (actually, we reckon it will grow even faster than that - see this post). Welfare benefits and similar spending grow by almost 2% pa. Which means that Darling is planning cuts in all other spending - including the NHS and schools - of about 2.3% pa in real terms.

Furthermore, as the unfortunate Andrew Lansley blurted out this morning, if you ringfence the NHS and overseas aid - which Cam himself has inadvisedly promised - then the cuts elsewhere will be even bigger... around 10% over three years. And that is precisely what Darling is planning (well, either that, or his numbers are even more nonsensical than usual).

So does Gordo not know any of this? Is he really that far gone?

No of course not.

He is simply telling the British electorate another of his Gigantic Lies. Just like all those lies he told when he was Chancellor himself.

You do kinda wonder what went on in that famous manse of his.

I'm sure Jesus never said lying was OK.

And personally, I wouldn't want to be explaining this at the Pearly Gates.

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www.gudanggrosiran.com Categories: cuts, fiscal policy, Gordo

Comrade Commissar Gordon Chernenko

Entertaining piece by Matthew Parris this morning, in which he highlights the striking similarity between Gordo's cadaverous appearance yesterday, and Konstantin Chernenko, one of those life-support leaders the Soviets had immediately pre-Gorbachev (we'll gloss over the fact that two of Matt's most entertaining paras were lifted word for word straight out of Wiki, without attribution - albeit with quote marks).

And when you look at it, the parallels are eery.

Both Comrade C and Comrade B are zombies leading zombie governments. Both are at the helm only because no "colleague" has the guts to offer an alternative. Both are ineffectual and increasingly ludicrous figureheads propped up (literally in C's case) by Politburo colleagues. Comrade C lasts just a year before finally keeling over, and Comrade B only has a year left before he too keels.

As the year progresses, Comrade C becomes so weak he's rarely seen in public. His big set-piece speeches are written and delivered by someone else. At the annual Red Square march past, he is visible only because he's been secured to a hatstand atop the Lenin Mausoleum. But the Big Hat itself, complete with masses of gold braid, is being worn by the man who gives the leader's speech - the man who is the power behind the throne, the loathed and much feared Comrade Commissar Petrov Mandelsonski:

Are we having fun yet? (Comrade C is the second stiff from the left)

Leaders who cling on to power by shooting their opponents are one thing. Leaders who cling to power by being lashed to the hatstand are something else entirely.

PS On Any Questions one of the State Dumblebees asked Caroline Spelman why Gordo needed to call an election just because he's wildly unpopular - after all the Evil Thatch hadn't, and she was evil. Unfortunately, Spelman missed the correct answer, and wittered instead about Thursday's elections. The correct answer is - altogether now - Mrs T had been elected and therefore had a mandate. Brown - just like Chernenko - has no mandate whatsoever.

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www.gudanggrosiran.com Categories: Gordo, melt-down, politicos