When the Conservatives won the general election in the summer it came as a shock to many people – and no less to many Conservatives themselves.
Labour was humiliated and the Liberal Democrats made dust, the SNP rose from the political dead and the Conservatives saw off Ukip and won the right to run the country – without Nick Clegg looking over their shoulder.
There’s still so much for the Tories to do. Even though over 1.4 million jobs have been created in the last five years there are still too many people out of work. With the priority being to save existing jobs where possible and create new ones, average earnings had only started to improve – leaving too many people struggling, really struggling, to make a decent living.
While the economy has recovered and the recession left behind, the nation continues to spend more than it earns, meaning that each year we have a deficit which adds to our national debt. That’s the same as finding the total of your credit card and bank account balances have risen year-on-year and your interest payments have been getting higher and higher – even though interest rates are at an all-time low.
For a nation this becomes generational theft. It quite simply means that we are consuming – by giving ourselves benefits that we cannot afford – and then forcing future generations of our children’s children and their children, most of whom we won’t ever see, to pay the bill. It is scandalous and we should be ashamed.
So large is this debt that we cannot just clear it by working overtime or changing job. Yes, we have to earn more by being more productive as a nation, but we also have to find savings so that we end up with a surplus at the end of the year that brings down our overdraft until it is cleared.
That’s what George Osborne has repeatedly said he is going to do – but, it saddens me to say so, I have given up believing he has any intention of doing it. In this week’s Autumn Statement (that lays out the viability of our public finances) the Chancellor of the Exchequer bottled it. He gave up on taking hard decisions that only a few months ago he said were vitally necessary. He did this by saying the statistics had changed, there is to be a tax windfall. If there’s to be a tax windfall should we not all get a tax cut, maybe reducing VAT that helps everyone?
As I write this column, the national debt stands currently at £1,554,540,416,979 and the annual interest over the next five years on that debt will be a staggering £275 billion or £55bn a year. More than we will spend on our defence and just shy of what is spent on education.
To put that in context, imagine you had an overdraft of £155,454 – you would have to pay interest of £5500 each year just to stand still. But you then borrow another £10,000 each year so your debt continues to climb – making your interest climb too. That’s what we have been doing, paying off the interest but still borrowing more on top each year. It has to end.
George Osborne promised to take us out of deficit and into surplus but has twice shifted the date that this will happen. It was originally set for 2015-16 (this financial year) but he then “discovered” the recession was worse than expected and moved delivering a balanced budget to 2017-18. This year he moved it again, saying it would be 2019-20 – by the end of this parliament and fully ten years after he took control.
To achieve this fudge he said he needed to improve the revenues he was going to raise (through strong economic growth and cunning tax changes here and there) and by reducing our consumption on government spending and welfare. The cuts on working tax credit were not popular but these things never are. The budget on these has increased from £4bn per year at inception to £28bn a year now, at a time of minimal inflation. Some changes had to be made, he insisted. Now he insists it’s OK.
Why, after a general election when your party pulls off a famous victory, did the Chancellor invent such a divisive attack on benefits so as to tar his party with the nasty brush all over again? Why lose all that electoral goodwill in the past three months and then not go through with it? Does he honestly believe that those he upset will forgive him by 2020? How long before they let the Tories into their hearts again?
Either the bitter medicine was required to help cure the patient or it wasn’t. One can only conclude Osborne is no doctor, he either doesn’t know what he’s doing, or if he does he doesn’t have the bottle to see it through. And the man wants to be prime minister . . .
Oh, and the national debt as I finish? It’s gone up by £3,983,411 in the hour it took to write this.