“When sorrows come, they come not single spies, but in battalions”. Shakespeare might almost have been thinking of the coalition government when he coined this particular one of his many memorable phrases.
Latest to let loose on George Osborne are Ryan Bourne and Tim Knox of the Centre for Policy Studies, in their less than snappily titled report “A Distorted Debate: the need for clarity on Debt, Deficit and Coalition Aims”. And they are not very complimentary.
The stated aims of the coalition for the UK economy on entering office in 2010 were to eliminate the current structural deficit by 2015 and stem the increase in public debt as a proportion of GDP. Nothing let setting hostages to fortune, as Gordon Brown found with his “Golden Rule”, although he did move not so much the goalposts as the playing field to ensure that he continued to meet it.
The deficit has fallen by around a quarter since 2010, but on a cyclically-adjusted basis (no, don’t worry, I don’t know what it means either) it had only been reduced by 13% by 31 March 2012. This had only been achieved to a limited extent by spending cuts (only 6% of the planned current spending contraction has been implemented), the great majority of the reduction having come from reduced investment spending and tax rises.
The official national debt forecast, meanwhile, is forecast to rise from 53% of gross domestic product in 2009-10 to a frankly terrifying 76% in 2014-15 – an absolute rise of £605 billion over the life of the Parliament. Not a lot of stemming going on there then, with high government borrowing and poor growth figures offering no consolation.
Intriguingly, the report also finds that the public has no idea what the government is trying to do or indeed whether it is succeeding. I will manfully resist the obvious cheap shot and content myself with saying that this might well be a relief to the government. The public is apparently very good at confusing the budget deficit and the national debt; of course in order to reduce the latter the former needs to be a surplus not a deficit, and we really are nowhere close to that situation.
Of course the government faced a Sisyphean task (he was that ancient Greek bloke who was condemned to push that rock uphill – presumably a task equivalent to being the modern Greek Chancellor) in trying to turn around the UK economy, which as Nick Clegg recently intimated is a long-term rather than a short or medium term project. But governments which don’t deliver on the economic front tend not to have a long-term. With another of the pieces of unintentional black humour that have been a feature of this week’s otherwise gloomy economic outlook, co-author Ryan Bourne says:
“With the recent dreadful borrowing figures, now would be a good time for the coalition to re-state the scale of our fiscal problems, and to set out how they will be addressed. Only by having a clear knowledge of the problems and solutions on offer from the different parties will the electorate be able to make an informed choice in 2015”.
Cynicism might lead me to say that the last thing the coalition needs right now is for the electorate to have a clear knowledge of the problems, particularly given that its solutions do not currently appear to be working. And it would be fantastic if someone came up with a clear set of solutions to our mounting economic woes, but I’m not holding my breath. Now if the politicians were to come out and say “we have no idea how to get us out of this mess” that would be refreshing (if scary), but that isn’t the kind of thing that politicians say, even when it’s true.