Ron Simon seriously concerned about UK budget and Government’s economic competence
published this on 8:33 am, Friday, 24th April, 2009Community News| Politics | Comments (rss) | Respond | Ping |
As national concerns grow on the UK Government’s budget, Argyll Councillor Ron Simon pulls together the enormity of the debt we are facing and its long term impact on our lives.
Expressing the anger and the worries that most people feel, Mr Simon says: ‘The Chancellor has announced a borrowing requirement of around £700b over the next 5 years. My main concern is the burden we are putting on ourselves and our children. This will cost every man, woman and child in the UK almost £3,000 a year for at least a generation. And that’s assuming that he has got his assumptions correct. Let’s remember he got things considerably wrong this year.
‘When you consider interest etc, the cost of servicing this debt will amount to £23b this year, rising to £50b in 2013/14.
‘Putting this into context the cost of servicing the debt alone is more than the entire defence budget, more than the entire transport budget and approximately half of the UK’s health spending.
‘It is also worth drawing attention to the Government’s projected growth figures. Mr Darling forecasts that the economy will shrink by 3.5% this year and grow by 1.5% next year. Contrast this with the IMF’s World Economic Outlook Projections released the same day, they show the UK economy shrinking by 4.1% this year and again by 0.4% next.
‘This calls the credibility of the Chancellor’s assumptions into question. If the IMF is correct then that borrowing requirement will be significantly higher and subsequently so will be the annual cost of servicing that debt in future years. Paying for the mistakes and mismanagement of New Labour and greedy bankers will cost us dearly for many years to come.
‘There are two ways of repaying this debt, huge reductions in public spending and considerably higher taxation or, of course, a combination of both. Whatever breaks are there for business and bankers is great – however, they will have to understand that they will be taxed through the nose in the future if New Labour remain at the helm and pursue this borrowing.
‘Gordon Brown slammed bankers lending money too readily to people who were unable to repay it, thereby bringing about the credit crunch. On that note surely the question has to be asked, how much debt can the national economy take on before it is damaged irreparably? Or will the UK be a sub-prime case borrower in the future?
‘The Chancellor’s proposed ‘efficiency savings’ (New-Labour-speak for cuts) will impinge on front line services in Scotland. I think he could make some efficiency savings himself by abandoning the National Identity Card scheme and the NHS IT scheme, saving billions.
‘I would also suggest that since he is so enthusiastic about scrappage schemes, that he scraps Trident. Son of Trident is estimated to cost £26b with a further £70b maintenance during its lifetime.
‘These measures alone would reduce the borrowing requirement significantly.
‘There needs to be much more clarity from the UK government on how they intend to get the National deficit back into balance. I remain sceptical because I honestly think they have failed to think that far ahead’.
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April 24th, 2009 at 9:57 am
Sounds like we should be going independent then doesn’t it? The question would then be whether an independent state of Scotland would take on any part of Gordon’s debt, or whether Westminster should take, as I think it should, all responsibility.
April 24th, 2009 at 4:55 pm
Ron Simon has hit the nail on the head here as he often does. How are we going to pay for all of this? I suspect that Gordon Brown knows he is a lame duck as far as the next election is concerned. He is setting up an impossible task for the Tories. I would favour Independence as well. I never thought I would say that but now I see what a good job the SNP are doing working for Scotland I am convinced that people like Alex Salmond, Jim Mather and Ron Simon would do the right things for people in Argyll. Has anyone worked out what our share of the debt is and what it would cost to repay?
Good website by the way, this is the first time I have been on it. I will look it up again.
April 24th, 2009 at 11:49 pm
This is a budget with an eye on an imminent general election which must be held in the next year or so. Darling is following the route laid down by Gordon Brown which has always been a combination of expensive populist gimmicks acompanied by sonorous and serious sounding rhetoric designed to win votes in the short term. It is not a budget for the UK economy and is no more than taking out more huge loans to pay for existing loans which gives temporary relief in the hope that Labour can scramble to another election victory. We are very close now to a situation in which we cannot service our debt. It is chastening to realise that China holds the world’s economy by the whatsits and only the fact that a collapse of the US (and UK) economies would damage China who holds most of the world’s dollars has encouraged it to loan out huge sums to keep the rest of us afloat.
Brown boasted of continuous economic growth. What we had instead was continuous debt growth allowing a mirage of economic growth due to increasing retail activity. Sadly much of this increasing retail as we increased our debt was enriching the Far East from where we get much of our consumer goods as the UK has dropped from 4th position to around 17th position in the tables of the world’s productive economies over the past 20years.
What we see now is not only the end of NuLabour but the end of the the voodoo economics described as Thatcherism which proudly destroyed the ailing UK manufacturing base instead of sorting it and replaced it with “service” industries and the buying and selling of money and debt.
Gordon Brown’s fate now rests not with the Tories but with the Labour party huge sections of which hate him. Many of them may well feel that such is the mess we are in now the sooner it is handed over to the Tories the better. I am concerned with two features of political lfe in England at the moment. The first is the very real rise of the BNP which is achieving huge increases in votes all across England at by elections. It is entirely possible that the BNP will take a Euro seat. My other concern is the rise in the LibDem vote on the basis of the ridiculous easy ride they and Vince Cable are getting for stating the bleeding obvious about the economy. Some copmmentators are suggesting that the LibDems may pass Labour in the popular vote as they are only 6 points adrift in Engaldn in the latest opinion poll. If this happens I would suggest this is the end of the road for Labour who will never forma UK government again. This may be the most significant legacy of Margaret Thatcher. Her banal right wing populism was the genesis of Nulabour which in turn has destroyed real Labour. This is very sad because we need a counterbalance to right wing government
However I feel a radical left of centre grouping will re-emerge in an independent Scotland.