Elections are decided on the personalities of the leaders of the parties, on the policies that they put forward but, above all, on the record of the government that has been in power up to the election. So let us have a look at what the Conservative led coalition has achieved and how the electorate should react to it.
The vital issue is the economy and the Conservative Party identified the Labour government?s budget deficit as the problem that they had to resolve.
Historically Conservative governments have always been strong in balancing public expenditure with the government?s revenue receipts. Under the Thatcher government, the 1990 budget was in surplus by £6 billion and the national debt stood at 27.7 per cent of GDP.
Gordon Brown, as Chancellor and as Prime Minister, decided to impose a ?Golden Rule?. This required the government to generate a budget surplus across the lifetime of an economic cycle. Unfortunately Labour?s inherent commitment to government spending was too strong, and they got round this commitment by defining the economic cycle to suit their own ends. So when the Coalition Government came to power in May 2010 it had inherited a budget deficit of £153.5 billion, 10.2% of GDP. Total expenditure was £673 billion, so the government was borrowing 23% of what they spent. In his June 2010 emergency Budget speech George Osborne said « As this is the last Budget in which the Golden Rule will appear, I would like to be the last Chancellor to report on it. We are set to miss the Golden Rule in this cycle by £485 billion. »
Conservatives believe that government deficits must be controlled not just out of blind adherence to political dogma but for sound practical reasons. Firstly higher government borrowing pushes interest rates up to a higher level than they would otherwise be, and that reduces private sector economic activity. Secondly, high borrowing results in pressures to increase taxation and taxation, however necessary, also reduces growth in the private sector economy. Finally increased public borrowing increases the National Debt, which requires greater government expenditure to service it. Those of us who live in France, of course, know all of that full well. So the government?s achievement on reducing the deficit to what is expected to be £90 billion in 2014/15, is strongly to be welcomed.
This has contributed to the trend for employment to rise and unemployment to fall that we have seen since late 2011/early 2012. There are currently 30.9 million people in work, 2 million more than when the government came to power. The official employment rate, i.e. the proportion of people aged from 16 to 64 in work, is 73.3%
The proportion of the economically active population who are unemployed (the unemployment rate) is 5.7%, compared to 7.8% when the government took office.
So the theory set out above works, and the reduction in the public deficit has yielded significant benefits to the UK economy. The painful austerity programme is not just adherence to political dogmatism that deserves public rejection, as our opponents would have the electorate believe, it is beneficial to the country as a whole, and particularly to those two million extra people who now have jobs.
Robin Baker
BCiP Member
Comments on « UK votes for UK laws » & « Devolution to Cities » – by Robin Baker
mercredi, octobre 1st, 2014UK votes for UK Laws
Christopher Chantrey?s article is excellent, well written and clearly argued. I just have one problem with it; I am not convinced.
That is because of a particular feature of the United Kingdom, which has led to the current structure: its imbalance. The UK is not comparable to Canada where the four major provinces have 86% of the population. In the UK, 84% live in England alone. That led to concerns in the other countries that, with a government chosen by the English dominated parliament, they were being swamped and their interests overlooked. Hence the demand for their own parliaments or assemblies. For the same reason there is no such concern in England and hence no appetite for an English parliament. But there is concern about too much government and its cost, which is why I do not believe that the idea of an English parliament and, inevitably, a separate English government accountable to it, will every fly.
Also it would all take too long, because the West Lothian question must be resolved as and when further powers are devolved to Holyrood. Since devolution, so far some legislation on education in England has been passed only with the support of Scottish Labour MPs. That is unfair. English votes for English laws could solve that. But we will soon be in a new ball game. The Scots have been promised ?extensive new powers for the Scottish Parliament?. These will include powers relating to taxation. If the Scottish Parliament can vote on part of the taxes paid by the Scots, that means that the Westminster Parliament must vote separately on taxes paid by other UK citizens. To have such taxes passed only because of the support of Scottish MPs would not just be unfair, it would be intolerable. And since Milliband will not commit himself on this issue, I want to see the Conservative Party campaign not just on English votes for English laws but on English votes for English taxes. Then we will see how Milliband responds to the English electorate on that. Of course such a system would be a great disadvantage to the Labour party, but they should have thought of that before they introduced devolution in the first place.
All this has been considered by the Commission on the Consequences of Devolution for the House of Commons, set up in 2012 and chaired by Sir William McKay. It reported in March last year and its conclusions can be summarised by:
?Decisions at the United Kingdom level with a separate and distinct effect for England (or for England-and-Wales) should normally be taken only with the consent of a majority of MPs for constituencies in England (or England-and-Wales).
This principle should be adopted by a resolution of the House of Commons and the generalised principle endorsed.
The internal processes of the UK Government for preparing legislation should include separate consideration of the interests of England.
Devolution arrangements all contain legislative provisions which preserve the sovereignty of the UK Parliament. Similarly the principle contains flexibility to cover cases where the situation is not ?normal? and where the interests of the whole of the UK need to be given greater weight than the interests of one part of it. The right of the House of Commons as a whole to make the final decision should remain. But there should be political accountability for any departure from the norm.?
So the analysis and the thinking have been done, the report has been published, we now just need to implement it.
Devolution to Cities
Michael Webster makes a good argument for further devolution to local councils. That is an interesting case but a complicated one because it would raise the whole question of local government finance. I do not think that it could work with a tax system that is not based on ability to pay. Let?s have a discussion meeting about it.
Robin Baker
Tags:2015 Election, British politics, Devolution, Scottish Referendum
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