THE TELEGRAPH: The Government is making a weak start in its attempt to deal with the deficit, says Simon Heffer.
There will be something new, we must be sure, to be announced today in the Chancellor’s review of public spending, even though so much of it has been leaked already and, of course, the defence review was announced yesterday. We are meant to be awed by the £83 billion reduction in the deficit planned over the next four years, but should doubt this attempt (which will probably be reasonably successful in the short term) to grab the favourable attentions of the markets will be enough.
Before George Osborne took office I had grave reservations about his understanding of economics and, more to the point, his understanding of why exactly we are in this mess. Nothing he has said since May, and nothing leaked in the last few days, has altered this view. Maybe we shall be pleasantly surprised by his genius today, but we should not be banking on it.
Rather, we should have reservations about what we have been told is proposed. The reduction of £83 billion sounds like a lot of money, but it still represents a £92 billion increase in public spending by 2014-15. It will leave a state that is still too large, that is too much of a drain on the productive areas of the economy, and that is undertaking functions that could be done more efficiently and cheaply if transferred to the private sector. It will also leave a level of debt that will impoverish us steadily as interest rates rise, as one day they must. More should have been cut, and there should have been no shame in having an ideological ambition to take the state out of people’s lives as far as possible. After all, it is part of the Liberal Democrat intellectual heritage to do that, isn’t it? Continue reading and comment >>> Simon Heffer | Tuesday, October 19, 2010