We all know what Gordon's plan is; inject huge amounts of our cash into the economy to hide his mismanagement and generally bribe us, then let the Conservatives sort it all out while he shouts "Tory Cuts! Look, See, I was Right!" This reflects the basic problem; he has spent all the money and run up a huge debt, and we are not going to enjoy the painful process of fixing it all.
No doubt, in time, the Conservatives will fix it. By then, of course, the electorate will hate them for having done so and will run back to Labour so that they can screw it up all over again. The reason is, of course, simple; the electorate will suffer the pain under a Conservative government and will associate it with Tory policies, as they always have done.
So, let's do it differently this time. Osborne should identify all the additional Brown borrowing, and the additional Brown spending - i.e. that above and beyond what he has (I hope) identified as a reasonable, necessary and desirable level of government spending - and place it within a separate fund with a completely separate set of accounts. Then, introduce a new tax, hypothecated for that fund and that fund alone, and place the management of that fund with a trusted non-political body (or the nearest thing available after 12 years of Gordon) such as the Bank of England or the NAO. Give them a statutory duty to manage the fund and its associated tax so as to reduce the debt to zero within a specified time and meet the spending obligations until they can be reformed out, after which the tax is to expire and can no longer be raised.
Call the tax something lengthy and anodyne without an easy acronym - the "National Debt And Economic Recovery Tax", for example. Allow it to be nicknamed the "Labour Tax".
In this way, the blame for the pain will be associated with Labour for many years to come. It will take a correspondingly longer time for the electorate to forget (once again), and we might actually be able to let capitalism run for long enough for people to see that it works - for everybody.
I like the idea of having a 'Labour Tax', but aren't we paying enough of those already?! :-)
ReplyDeleteAs the very least, the Conservatives should free all government departmental spending. Over half of all new borrowing is being caused by increasing the budgets of every department, even though we are in a recession.
ReplyDeleteThe first thing the Tories will have to do is throw open the books and brutally, honestly tell us what the state of the nation's finances really is. That means admitting all the off-balance debt, all the liabilities, EVERYTHING.
ReplyDeleteOnly once we know how big the problem is can we start to fix it. It's going to be a tough job.