It doesn’t matter which party you vote for in next year’s General Election — in every case, you will be voting for a fantasy budget.
At least that is the conclusion of Bloomberg’s senior UK economist Jamie Murray in his most recent note in advance of the government’s Autumn Statement. And here’s the chart that proves it:
As Murray says:
Assuming that ring-fenced departments continue to be protected after the election (no party is campaigning on spending cuts in education and health spending) means that spending on services such as justice, policing, diplomacy, defence and transport could fall by almost 60 per cent in the decade to 2018/19 — it’s for the reader to judge whether that’s credible.
Well if it is for the reader to judge, colour this reader incredulous. The very idea of 60% cuts to policing, defence and the judiciary is so ludicrous as to be laughable. Except that it’s not a laughing matter. These are the policies on which the public are being asked to vote. And they’re being misled.
Murray continues (emphasis added):
Overall, there is a lot of work to be done to restore balance to the public finances. The only thing known for certain is that the current plans will change. Whichever party/parties take office in May, an emergency budget can be expected which will see these plans rewritten.
So once they have scared people with the imminent need to cut the deficit to ward off the dangerous bond vigilantes that could bankrupt the country to win the odd marginal seat the victor/victors will almost immediately do a 180 and announce that, in fact, they never intended to deliver on these promises. All in the name of fiscal responsibility!
At an event last week Matthew Whittaker, chief economist at the non-partisan think-tank Resolution Foundation, said that vetting the proposed spending plans of major political parties in the UK was becoming impossible due to the increasing gap between what they were offering the public and what it would mean in practice. As he put it:
“The gap between the scale of consolidation implicit in their plans and what the electorate has been told to date is just too large. The electorate shouldn’t be subjected to another largely empty fiscal debate like it was at the last election. Currently we are facing a candour deficit as well as a fiscal one.”
Unfortunately the current debate looks every bit as bad as the 2010 election. In fact, on many measures, it looks a great deal worse.
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