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By David Vance On October 10th, 2011

The future economic prospects of the United Kingdom are being framed by politicians as if there were two plausible choices. Let’s call them Plan A and Plan B.

With Plan A, we have the Coalition saying we need to stick with the idea of reducing the national budgetary deficit and on the other hand we have Labour and a section of the liberal media demanding Plan B, that we choose “growth” instead.

Which is right?

The fascinating aspect to all of this is that there is NO choice whatsoever but cynical politicians like to pretend otherwise. Let’s consider a few facts

According to that well know organ of the right, “The Guardian”, (sic) the European Commission’s spring economic forecast back in 2010 put the UK deficit in that calendar year at 12% of GDP, the highest of all 27 EU nations and worse than the Treasury’s own forecasts. This mountain of Debt was Gordon Brown’s farewell gift to the Nation and the culmination of almost a decade of profligate government spending. Unless it is cut, and cut savagely, the UK will turn into Greece, that’s the simple economic reality. Against that background, there is no growth but plenty of decline assured.

But to the political left, to the people who ran up the debt mountain, it’s not that simple. They now like to claim that rather than focusing on reducing the Debt mountain, we should be focusing on going for “growth” instead. Yes there should be deficit reduction but this needs to be done more slowly. The magic definition of what constitutes right amount of slowness is left dangling, just one of those pesky details that the boffins can sort out, later.

Shadow Chancellor Ed Balls has suggested that we cut VAT by 2% whilst imposing a tax on bankers bonuses. The problem here is that there is a £10bn gap between these two aspirations and that leads to…yes, you’ve guessed, more borrowing. The law of unintended consequences or a deliberate evasion?

The “growth” being advocated is a growth in spending. The actual economic growth being conjured up as a viable short term option is a pure socialist chimera, but it sounds nice and ever so plausible when dealing with the zombies in the media, the same people who never once questioned Labour during the profligacy years

The UK can only grow when National debt is reduced, when Interest Rates increase, when income taxes fall, when the State shrinks and when politicians stop pandering to uninformed populist appeal. I reckon the 12th of never is the target date for that.

2 Responses to “A FALSE CHOICE…”

  1. Does he speak a load of Balls? Who knows better about crushing crippling debt than one of the men who got us into this situation. Who rather than saying to Brown ‘is that a good odea?’ Balls actually said ‘go on my son borrow lots more!

    Still given the average voters stupidity and limited memory it’s entirely possible Balls could be finalising the destruction of the UK in a year or so.

  2. David –

    Yes, yet the Tories are not even rolling with fraudulent Plan A.

    The deficit and structural debt are both increasing while borrowing is increasing. August this year saw state borrowing hit a record high of £15.9billion for the month.

    What austerity is this?