"We weren't elected to make cuts!" The case for independent local government (and elected mayors)

My grandfather as Chairman of Penge UDC in its final year - 1964

A while ago I wrote asking what local councillors are for. The article was written in response to the idea of councillors being 'mini-mayors' in their wards and I concluded:

Much though I see merit in the mini-mayor idea, it is a reminder that the 2000 Local Government Act emasculated local councillors and created the situation where many ended up flapping around wondering what their role and purpose might be.

And I remain of the view that Blair and Prescott's wholesale changes to the governance of local authorities did untold damage to the idea of local representation. It is also striking that, despite the more recent Localism Act allowing councils of any size to return to the old committee system, this has only happened where political circumstances made it something one or other of the two big parties could sign up to.

As a consequence of the 2000 Act (which introduced a system designed for a directly elected mayor but, in most cases, applied without such a beast), we have a governance system at local level that excludes all but a tiny minority of councillors. Moreover, the system places leaders of councils in a special position - in effect treated as de facto executive mayors. I've witnessed this problem - and it is a problem - in discussions and debates about the creation of new sub-regional structures to harbour decentralised powers and cash from central government.

Regardless of the political balance or make-up of local authorities, it is leaders that central government wishes to deal with, leaders that sit on decision-making panels, and leaders that define the position of the particular local authority. What we have is indistinguishable - except in its lack of democratic mandate, transparency and accountability - from a directly elected mayor.

At the same time as the granting of special position to leaders, councils have been faced with the necessity of reducing their spending. This has led to much hand-wringing while the prosaic job of getting savings made without doing too much damage to front line services was undertaken - largely successfully. it is this process of reducing local spending that often gets dubbed austerity. And has resulted in a further round of worries about the role of local councillors - along the lines of "we weren't elected to make cuts!"

Despite this, it is clear that austerity has led to a further undermining of the influence of most Councillors, who now find themselves open to range of practical and more wide-ranging challenges. There are now fewer Councillors- financial pressure is leading to a ‘Councillor cull’ as Councils are merged, if not statutorily, then for all practical purposes via sharing services. They have much less financial discretion, leaving doubts about whether even statutory services can be maintained. 95% of Councils in England are now sharing a total of 383 shared service arrangements, leading to a dilution of Councillor influence. ‘Backbench’ Councillors not involved in the strategic decision making find themselves increasingly in the dark re. the details of contractual arrangements which directly impact on their wards and which may be in place for 25 years.

Once again this suggests that the role and purpose of the local councillor is worthy of review. If you take the 'community leader' model of councillor where people are elected to champion a given place (and to act as a de facto gatekeeper to the local bureaucracy) then there's a good case for having a lot more councillors. There's quite a contrast between me representing 13,500 electors in Bingley Rural and the fortunate councillor for Tamarside in Torridge District with only 1300 or so voters. The problem is that, on this ratio, Bradford would have 300 councillors which is perhaps a few too many!

As you all know, I'm not a big fan of councillors as community leaders - the sort of view that Clive Betts MP, chairman of the local government select committee, holds:

Councillors are spending less time in council chambers and more time out and about in their communities. In future, they will increasingly need to be on the frontline, working with constituents and external organisations such as GPs, schools, police, local businesses and voluntary organisations to ensure their communities make the most of all the opportunities available to them.

This is the councillor as an agent of the state rather than as a representative of the people - turning our role around from decision-making to being part of implementing decisions made by others. This negation of the councillor's representative role is, in truth, the central failing of the system created under the 2000 Act. That Act sought to deny - in most circumstances - councillors their historic role of being the representatives of a given group of electors, charged with voting of their behalf. Today, your local councillor - unless you happen to live in the leader of a council's ward - no longer has that role when it comes to most decisions that affect where you live.

Understandably, leaders (and those who aspire to that role) make common cause with the councillors who like the community leadership role to resist reforms to the system that might allow for councillors to take on that historic representative role again. These leaders will point to places and times when the councillor does have a say - on the setting of the council tax, on planning decisions, on area committees. But they never mention the restraints on those decisions - the 'Section 151 Officers Report', the 'National Planning Policy Framework', or the council's own Constitution.

None of these things are the consequence of austerity (defined in this case as cuts to local council budgets) it's just that the need to reduce spending has led to difficult decisions being made. And for many local councillors the sudden realisation that they have precious little say over any of those decisions affecting their wards.

For all its flaws and failings, local government is almost always better managed and more effective than centrally-directed government. This is what Tim Worstall called Bjorn's Beer Effect:

You’re in a society of 10,000 people. You know the guy who raises the local tax money and allocates that local tax money. You also know where he has a beer on a Friday night. More importantly Bjorn knows that everyone knows he collects and spends the money: and also where he has a beer on a Friday. That money is going to be rather better spent than if it travels off possibly 3,000 miles into some faceless bureaucracy.

The point (and we in England need to recognise this) is that Bjorn, like his counterparts in France and Germany, is a directly-elected mayor. If UK local government is to realise the sort of autonomy and fiscal control that places eleswhere enjoy, it has to start by acknowledging its present governance is opaque, undemocratic and unaccountable. And it is the governance at fault not the quality of councillor or the complexity of the decisions that are being made. It's certainly nothing to do with austerity.

For a hundred years or so the UK - well, England really - had a local government system that worked pretty well. It had limited powers (although this being England it could always do things so long as they weren't expressly forbidden) but exercised those powers using the funds it raised locally. As a result things like water supplies, sewers, houses, museums, art galleries, parks and swimming pools were built and places - even the smallest of places - developed their own identity and sense of value.

All this changed over the years from the 1960s to today's position where local councils are lost, struggling to know whether they are a community-focused urban or rural district or a grand and powerful city region authority demanding of attention (and loads of cash from central government). We behave like the former and demand powers like the latter, we reject elected mayors in favour of powerful leaders pretending the two are somehow different, and we get together and demand loudly that Westminster gives us more attention.

If we want to make the case for decentralising our over-centralised state - 'devolution' as it's popularly called - we have to start with making the case for a system of governance better than the one imposed on us (but gleefully snatched up) by the 2000 Local Government Act. Mayors are part of that better system but so are stronger parish councils and a thorough debate about the role of the local councillor. Above all - and we know this - the great years of local government were when local councils didn't have to get either permission or cash from Whitehall to do what they felt was right.

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A warning from Greece: the crisis of government

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Today the Greeks are voting in a referendum. Other wiser and more informed folk will tell you what this is all about, how you should vote (if you were Greek) and what it all means for the poor benighted Greek people. As ever with these debates this wisdom will act more to confuse than to inform since the Greeks seem faced with a choice between poverty and bankruptcy or bankruptcy and poverty.

Instead of giving my advice (for what it's worth this is a rare example where not voting is the most logical option since the outcome isn't really affected by the choice - the Greeks are screwed regardless), I'd like instead to take this particular Greek tragedy as a warning. Not a warning about bankers, business or supranational authorities without accountability but a warning about government.

The politicians are presenting what has happened in Greece as a failure of economics. The bankers, the oligarchs, the mysterious market forces are the causes. Vast libraries of articles filled with 'charts' showing this or that about the situation are penned. Every single economist (or so it seems) appears in print with a slant on the crisis. The commentary on news channels is peppered with barely understood economic jargon and assorted talking heads appear on panels soberly discussing this economic catastrophe.

They are, for all their charts and tables, wrong because the problem is a problem of misplaced trust in government. Two generations of Greeks placed their trust in government believing that the state was their friend and had their interests at heart. Even when they knew some things weren't right, they carried on believing that none of this was existential - there'd be a bad patch or two but everything would carry on (more-or-less) working.

It really did seem that the state was the Greeks' friend - especially for the growing army of people who worked for that state and who retired from working for that state at the delightfully young age of 58 on 80% of final salary. Meanwhile ordinary Greeks got schools, hospitals and free university study plus a generous benefits system - all the superstructure of the modern European state. Not only did this make Greeks happy it also provided loads of jobs for the sons and daughters of Greece:

The expansion of Greece’s huge government sector took decades to create, but its growth in recent years has been particularly striking. Public employment grew by fivefold from 1970 through 2009 — at an annual growth rate of 4 percent, according to a recent academic study by Zafiris Tzannatos and Iannis Monogios.. Over the same four decades, employment in the private sector increased by only 27 percent — an annual rate of less than 1 percent.

It might look right now that the problem is a problem of banks, business and economics but peel back the skin of the Greek crisis and you see a problem of government - unsustainable, expansive government. And what didn't go along with this expansion of government was an expansion in taxes - Greeks got their modern welfare state on the cheap. And still set about dodging the taxes they were supposed to be paying:

...the authors also make an estimate of how much tax is being evaded in Greece. The debt-to-income ratio for wage-earners in a particular profession ought to provide a guide (though not a precise one) to the debt-to-income ratio that banks are comfortable with for self-employed borrowers in the same profession. That assumption enables the authors to work out what multiples banks are applying to reported incomes in various industries; how much taxable income is not being reported; and how much tax is being evaded (see table). At an aggregate level, the authors calculate that the self-employed in 2009 dodged taxes on at least €28 billion of unreported income, enough to fill 31% of the Greek budget deficit that year.

The Greeks aren't uniquely bad - self-employed people everywhere tend to underreport income - but there does seem to have been a reluctance to enforce tax collection. Perhaps Greece's huge black market - over 25% of GDP - has something to do with all this. That and the fact that "the three most tax-dodging professions account for about half the votes among Greek MPs". All this is a country where tax rates - certainly compared to Northern Europe - are low.

The problem here is that, while we don't trust the politicians we elect to run government, we continue to trust government. Yet the evidence from Greece (and if you look closely enough, just about everywhere else) is that we shouldn't be trusting government quite as much as we do. Don't take this as an argument for getting rid of government but rather as an encouragement to individuals, families and neighbourhoods to take control of their own business rather than to sub-contract it to a government.

The saddest thing about Greece is that the people do not think they have the option of rejecting their failed government - no-one is offering a new settlement based on family and community rather than the old system of state-directed largess. So they turned to a party promising an end to the bad stuff and a return to those comfortable days of safe state jobs and early retirement. After the essentially tactical (and largely purposeless) referendum, Greeks will again face the reality of their future - poverty and bankruptcy. Fingers will be pointed at all sorts of culprits - Germans, EU bureaucrats, bankers, businessmen, politicians who used to run Greece. But no-one will spot the real culprit - an unsustainable government filled with protected and entitled employees prepared to screw over the rest of the nation so as to sustain that protection and entitlement.

So my warning is to echo those words of Ronald Reagan and to remind you that government is not your friend, does not care about your circumstance and mostly seeks to sustain itself using other peoples' money. Much of what we call 'austerity' is simply the realisation that government is too bloated, to overweaning and too self-interested. And pretty unaffordable.

The Greek crisis is a crisis of government not a crisis of banks, economics or markets. It is government that must change to save Greece. And our governments must change too if we are to avoid the same fate.

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Big state, small state...on Simon Wren-Lewis's ideological obsession with big government

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Sometime the careful manufacture of a straw man is a useful tool to present an argument. Indeed, the thing with a hypothesised model as the basis for criticism - even if the real world is different - is that it allows people to marshall the strengths and understand the weaknesses of their ideology.

But this is a story about the other sort of straw man. The more common one constructed in order to provide sustenance for a given position regardless of the actual truth. Perhaps the most common straw man out there is the argument against any reform of the National Health Service on the basis that the only alternative is a "US-style health system". No-one proposes such a change but the opponents of the changes that are proposed always used this straw man to frame their argument.

However, for shockingly bad straw men, this blog post from Simon Wren-Lewis is a masterpiece. The core facts are (sort of, arguably) correct but are carefully placed alongside other facts to which they do not directly relate. All this to make this point about big government:

Perhaps it reflects the power of an ideology that its protagonists want to see no evil. Perhaps it is because those hurt by austerity somehow do not count. But the claim that Osborne’s cuts have been such a success that they will cause a “deeper intellectual wound to the left than we currently understand” is simply delusional. These are fantasy ideas from those living in an imaginary world, while in reality the policies they support do serious harm.

To  arrive at this position (and I've no quarrel with people thinking big government is just grand - it's just not a viewpoint I share) Wren-Lewis has had to strangle the evidence. Because the ideological bias is revealed - the protagonists of a small state are "evil" - it is clear that this was the starting point for the construction of the straw man rather than a more considered assessment (something we'd expect from an Oxford academic but don't get here) of the arguments for and against reducing the size of government.

So let's look at Wren-Lewis's arguments:

The first one relates to the idea - widely held but wholly inaccurate - that there is no longer any constituency still arguing, on principle, for a big state. I find this odd since the majority of our public policy discourse and especially that driven by Wren-Lewis's colleagues in academia demands ever more regulation, control and direction from government.  Perhaps if he had a conversation with some sociologists this might clear up his weird belief that support for a big state "...lost all its influence with Margaret Thatcher and New Labour, and it has also lost its influence in the rest of Europe." In historical terms the state remains large - reducing the government portion of GDP to 35% from its current level approaching 50% is an argument about the size of government but doesn't fundamentally challenge the central welfarist argument of modern government - a position supported (to differing degrees) by left, centre-left and centre-right.

Wren-Lewis next claims that 'small state people' (he manages to use the preferred term of abuse 'neoliberal' as well but 'small state people' is wonderfully patronising) are not as good as him because - he claims - not to have any "fixed ideological position" about whether the state should be large or small. Whereas, of course, the sad little state people are attached to their ideology. The problem is that Wren-Lewis doth protest too much - he is absolutely wedded to the idea of big government and to the view that government actions determine the direction of the economy not the aggregated choices of private individuals. It is true that, if (for whatever reason - call it ideology if you must) government sets out to reduce its size then this will have the short term effect Wren-Lewis describes. But this is essentially an argument for the big government macroeconomy that created the very financial crisis Wren-Lewis wants to blame on 'private sector activity'. The idea that the choices of big governments had no role in wrecking the economy a decade ago is a wholly indefensible position more revealing of Wren-Lewis's ideological preferences than any assessment of the facts.

Before his final piece of ideological legerdemain, Wren-Lewis arrives at the debate over whether the reductions in government spending have had a social cost. Which he presents via this little rant about food banks:

The number of food banks in the UK has grown massively over the last five years. The Trussell Trust estimate that more than half of their clients were receiving food because of benefit delays, sanctions, and financial difficulties relating to the bedroom tax and abolition of council tax relief.

Now I'm not going to deny that changes to welfare resulted in some hardship but the frank truth was that our system was unsustainable - even in a world where big government is OK. Wren-Lewis wants to argue that the reforms have been 'duds' - yet he knows that this is not the case. It is the old methods such as the Work Programme that evolved from Labour's New Deal schemes that are duds not the use of financial incentives to drive different choices. The problem is that the system of redistribution we have in the UK is now almost entirely paid for through borrowing (or if you prefer it the other way - because so much of the money raised in taxes goes in welfare payments there isn't enough left to provide the services we actually want government to provide so we have to borrow).

Finally Wren-Lewis arrives at his intellectually-dishonest conclusion in which he calls people on the right 'evil' and argues that the polices such people propose cause 'serious harm'. What Wren-Lewis cannot admit is that not only might that supposed harm be mitigated through some welfare-enhancing private action (those food banks, for example) but also that the policies of big government might also cause 'harm'. There are a whole series of government interventions and regulations that reduce trade, undermine enterprise and limit private choices - all of which might be described as 'harm'.

Wren-Lewis built a fine straw man. Truly magnificent in its vanity. But there's no truth in the central premise that people like Wren-Lewis are not wedded to the idea of big government in the manner that others (George Osborne in the main) are wedded to the idea of small government. And Wren-Lewis clearly demonstrates his ideological commitment to big government which means his splendid straw man collapses into a shallow polemic.

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Malnutrition and public health - it's not austerity that's the problem

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Some "Doctors" have written a letter to the British Medical Journal expressing concerns about malnutrition:

In a letter to the British Medical Journal, David Taylor-Robinson from the University of Liverpool and six other academics warn: "This has all the signs of a public health emergency that could go unrecognised until it is too late to take preventive action."

They say they are particularly worried about the number of children with malnutrition because it can cause cardiovascular and other chronic diseases in adulthood.

And the newspapers and broadcasters lap it up without asking some simple questions - ones like "how many cases of child malnutrition are there?"

To help them, here are the figures from an answer to a Parliamentary question  - in 2008/9 there were 201 cases of children admitted to hospital where  the primary or secondary diagnosis was malnutrition. In 2012/13 this figure had soared to 205 admissions.

There is absolutely no evidence at all - other than anecdotes from teachers - to support the contention that child malnutrition is rising. The thing that should concern us is malnutrition among the elderly because this has risen significantly. The question is why?

Here's one stab at assessment that followed a report in The Independent earlier this month:

People with certain long-term health conditions can't always retain all the nutrients they need - particularly the elderly, who might also struggle to make the trip to the supermarket. With this in mind, the higher incidence of malnutrition might also reflect broader demographic trends, including the fact that the UK's population is ageing. The most recent Nutrition Screening Survey showed that those aged 65 plus were more likely to be malnourished than those who were younger. In addition, it may also be that hospitals are now more likely to screen a patient for symptoms of malnourishment. 

The reasons for increased malnourishment may be entirely unrelated to the current economic climate. Since the elderly are largely protected from the impact of welfare reform and make up the overwhelming majority of malnutrition cases, we should perhaps look elsewhere for the causes of the problem. There may be consequences from 'austerity' - reductions in social care visits, for example - that impact on the elderly eating properly but equally the rise may be a simple reflection of people living longer.

All this may not suit the political agenda of the people writing to the BMJ but we should perhaps pay more attention to the real challenges rather than write ill-researched and polemical letters that serve only to misdirect (and get a nice headline).

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Austerity and government spending

Austerity is back in the news. Not that it ever went away, I guess. But it's back, the IMF has told us that we're too austere (thereby contradicting what it said the previous time and the time before that) and the masses hordes of pseudo-economics experts has leapt on the collected words of a few luminaries to say that the government needs to do something different.

They are, however, studiously vague about what that "something different" might look like. One day it sounds like printing loads of lovely pounds and scattering them like confetti across the nation. Later the same folk suggest - in the manner of business snuggling up to government - that we should "invest in infrastructure" with that freshly created and unearned cash.

Mostly though the cries of pain around "austerity" are about government spending rather than economic growth. Sometimes this is wrapped up in barely understood, quasi-Keynesian comments about aggregate demand thereby providing cover for a message that tries to tell us that the answer lies in borrowing more money to spend on (variously) higher benefits, new trains, tunnels under London, "boosting the housing market" and any number of special appeals from health and welfare lobbyists.

The central argument is that the problem is that we (consumers) aren't spending enough. Which is a bit rich when the government insists on taking round-a-bout half of all we earn so it can squander it inefficiently on heaven knows what. Plus of course the rest of the government's strategy - cheered on by the austerity worriers - is to inflate our way out of debt. For sure, we pretend that the high inflation of the past four years has been brought about by special factors but the truth is that the Bank of England, charged with controlling inflation, has been allowed to ignore its responsibilities by allowing that inflation to run well above the target level month in and month out.

Since the government hasn't really cut spending then we have to ask where the austerity comes from? It's a real fact that there are people out there who are more-or-less destitute - the latest reports from those food banks (for all their selective nature) tell us this is so. But are those people destitute because of government spending cuts - spending cuts that, in aggregate, haven't happened? Or are they destitute for some other reason - policy, regulatory or just plain bad luck?

It seems to me that, by focusing on the misguided view that the cure to economic problems lies with government (and central bank) action, we condemn many people to a much deeper 'austerity' that would have been the case had we focused instead on the things that do make people better off, that do end recession and that do prevent "austerity".

Growth comes from adding value - taking or doing things that make lives better, that allow us more time or that give us access to things we didn't have before. It doesn't come from taking money off Fred and giving it to Susan. It doesn't come from regulation, from controls or from the deranged view that a few suited masters in the Treasury can "run the economy". Every day I see exciting, creative people doing things to make the world better and brighter - sometimes just because they care but mostly because they can turn that value into money and that money into nice cars, foreign holidays, fancy clothes and a big house.

That's what will end austerity not government spending.

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Why I'm confused about those cuts...

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"Major cuts," is the cry. And I wonder. Mostly where the money is all going. For in the aggregate there are no cuts:

What’s more, the evidence indicates that U.K. has, at best, slowed down the growth of spending, but it has not engaged in actual spending cuts. I documented the trend in British spending earlier this year:

A look at the data in Her Majesty’s Fiscal Year 2012 Budget shows (see table 2.3) that total managed expenditures will increase from £696.4 billion in 2011–2012 to £733.5 billion in 2014–2015, and further to £756.3 billion in 2016–2017. Adjusted for population growth, this is slow growth, but not a savage cut. That table also shows a “projected” drop in Public Sector Gross Investment between 2012–2013, but if it ever materializes, it will be contained to that year alone.

And we're paying through the nose too:

Spending cuts in the UK can’t be blamed for the weak growth path the country is on. On the other hand, tax increases can. Here is a list:

• a VAT hike from 17.5 percent to 20 percent (probably the main culprit of the U.K.’s current problems)
• a new 50 percent tax bracket on incomes over £150,000, which will drop to 45 percent next year
• an increase in air-passenger duty to 8 percent
• “temporary” payroll tax of 50 percent on bonuses over £25,000
• a capital-gains tax hike
• a 0.088 percent levy on banks
• an increase to 7 percent in the stamp duty on the sale of properties worth more than £2 million and on properties bought through “non-natural persons.”

(For more, go here.) The bottom line is that the U.K. is another case of private-sector austerity (i.e., tax hikes) without public-sector austerity (i.e., spending cuts).

To paraphrase Ray Davies, I remain, yours truly...

...confused BD13.

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Krugman...Or When You Get Stuck Change the Subject

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I have just watched Paul Krugman's master class in punditry (note the use of this term rather than the term "economics" - there wasn't a great deal of economics in evidence) from yesterday evening's Newsnight. You can follow the link from the Great Man's blog .

What struck me wasn't that Krugman succeeded in putting the case against "austerity" although this was the billed intention but that whenever he reached the point where he might trip over his own argument he shifted the subject.

When confronted with the moral argument that debt means having something now rather than later - meaning of course that we, given the likely timescale for debt repayment, are taking that from future generations - Krugman chooses instead to talk about the lack of graduate job prospects. Rather than addressing the real issue raised - government debt as deferred taxation, Krugman chooses to talk about a relatively minor labour demand issue.

And then when Angela Leadsom raises supply side considerations - how to help the economy create jobs - Krugman lapses into accusations that Ms Leadsom and others are ideologically motivated and using the current crisis to shrink the size of the state. At no point in this does Krugman respond to or consider whether there are any supply side constraints. He waffles vaguely that there's no evidence of supply side constraint (in the US) and states baldly that the whole problem is a matter of demand. More seriously - from the point of debate - he accuses others of insincerity and exploitation without evidence.

On one level this was great telly - a clever pundit parading his skills and, no doubt, successfully flogging a few of his books (the real reason for his presence, of course). But, given that Krugman is billed as a "Nobel prize-winning economist" it was really disappointing that he chose political and ideological arguments as the basis for his opposition to austerity rather than economics.

Maybe that's because he doesn't have an economic leg to stand on? I wanted to understand the arguments - the economic arguments - against austerity but instead got political argument. And, whenever the challenge got close to denting that argument, Krugman either made ad hom attacks or changed the subject. We had the spectacle of two very polite 'opponents' allowing this man to attack them rather than responding to the serious points they raised. Rather disappointing really.

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Austerity - everywhere but government

aus·ter·i·ty/ôˈsteritē/

Noun:

Sternness or severity of manner or attitude. Extreme plainness and simplicity of style or appearance.

Or as European voters would have it, a monstrous evil loaded upon them by bankers and their cronies in government. But what exactly are we speaking of here – what exactly do we mean by ‘austerity’?

I’m not here to present some sort of economic case as to the existence or otherwise of austerity, of a time when financial reality forces us to adopt – from necessity – that plainness and simplicity of style. The truth is that austerity for most of us is a fact but the austerity isn’t being driven by cuts in public spending – there are, in aggregate, precious few of those cuts. No, the circumstances forcing us to live an austere life are coming from the private sector and from the manner in which governments have responded to the unresponsiveness of the private economy.

Look around you, speak to a few of your neighbours, wander down the food aisles of the supermarket and, above all, spend an hour or two watching television advertisements. All will tell you of two things – the two things that are bringing that unwanted austerity upon us:

1. We have less money in our pockets – for some of us this is because we don’t have any work but for nearly everyone the amount has fallen because employers, struggling for business, aren’t raising wages, are reducing hours, cutting overtime and ending bonuses. Plus, of course, the government, fixed on its own cash flow problems has bunged up taxes
2. What money we have in our pockets doesn’t buy as much – that’s right folks, we’ve never had the deflation we were promised at the start of this crisis. The clever folk in the treasury told us that we needed to keep real interest rates negative because otherwise deflation would destroy value and wealth – we would be doomed. Some of us said this was rubbish and that the government wanted some inflation so as to reduce its (and the banks’) debt problems. And we were right – there’s now been at least four years of above trend inflation. That’s four years where savings have shrunk, four years of price rises. Plus, to cap it all, the government has put up taxes – VAT, excise duties, airport tax

Austerity isn’t a consequence of reduced government spending but of other government actions – taxes that are too high, interest rates that are too low, running the Royal Mint’s printing presses at full whack and failing to cut spending. Yes that’s right – failing to cut spending.

Let’s remind you that over three years Bradford Council will have cut over £100 million from its budget – that’s 25% of what we get in grant from government. And it’s true, jobs have gone, some unnecessary cuts have been imposed, a few facilities have closed but, in the main, the “cuts” have barely inconvenienced the majority of the City’s population.

And look a little further – those financial strictures haven’t been applied to the NHS where budgets have risen not fallen, we’re still spending millions each week maintaining an unwanted armed presence in Afghanistan and the merest of dents has been made in the welfare budget. In truth the government predicts that spending will rise by £50 billion between 2011 and 2015 – what sort of dire austerity is that?

Yet there is austerity – people are struggling out there, we may not have starvation but everywhere you’ll see faces telling you it’s tough. As I said, watch those adverts – not just the offers of loans or the debt scams but the everyday adverts. Look at the styling, consider the way we now see less of the flash, hedonistic and aspiration imagery and instead get and older, solid, calming language.

And that austerity is the fault of government – for they have created the inflation, they have increased the taxes, they have made the jobs more expensive. What they haven’t done is cut their own spending.

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Ed Miliband, flat-earther

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I try hard to find some semblance of consistency, of common-sense within what passes for policy for the Labour Party but as ever it is notable by its absence. Take growth - here's Ed Miliband:

Growth, he said, was the current "missing ingredient"

Let's grant him that observation. But what part of an effective growth strategy involves tax rises? How can you believe that - when the problem is that people have too little to spend and that there's too little business investment - the right approach is to take more money off people?

If the problem isn't the need for "austerity" but the need for "growth" the solution isn't - and will never be - to make sure that people have less money. Yet this is exactly and precisely what the Labour Party - not to mention assorted socialists across Europe - are proposing.

A brave left-wing leader would reject the "government can fix it" solution and argue for something different - perhaps a return to mutualism and co-operation, maybe flexible employment laws and a Swedish or German approach to minimum wages or even (inspired by a re-reading of Thomas Paine) the embracing of free trade in finance and food.

But instead Ed Miliband joins the flat-earthers - visiting a dreadful deception on people by claiming that, contrary to truth, there is no need for austerity, that there is no recession and that we can carry on blithely spending other people's (and our grandchildrens') money on grand schemes, central planning and on the sustaining of a vast bureaucracy.

No government - right, left, centre, socialist, liberal, rainbow coalition - ever created growth. All government does is spend money - consume. People on the left rant and rave about out "consumerist" society but never recognise that the biggest and most indulgent consumer - the monster devouring ever more scarce resource - is not the rich banker or the flashy football star but their beloved state.

Once - as is now the case right across Europe - the state sucks up more than half what other people earn, the dire, inevitable end is in sight. Half of the state's spending is "nice to have" rather than essential to the nation's smooth operation. Yet people like Miliband persist with this bizarre belief that it will be OK is we just take even more away from those who earn it and give it to those who don't.

There is a problem and it is a problem of regulation, of the establishment, of selfishness.

The selfishness of a bloated state.

....

An interesting little jobs statistic...

****

Back in June 2008 - before the age of austerity, before the cuts, before all those civil servants were cast on the scrap heap, public sector employment in the UK was:

6,019,000 - that's 20.4% of the workforce

Now, after all the austerity, the draconian cuts and Osborne's reign of terror, public sector employment in the UK is:

5,942,000 - that's 20.4% of the workforce

Interesting don't you think?

Source: ONS (table EMP02 here)
....

Thoughts on what you would have read if the IT had worked!

***

I wrote a brilliant, insightful, budget-related article in my break today. You all would have been staggered by its depth, by the breadth of its argument and by the lyricism of its prose.

For reasons that are of no importance, I e-mailed it to my Council address. Sadly, Council IT has let me down this evening so you'll have to imagine the forceful brilliance of the article.

The great irony is that I wrote about the new obsession with being a "professional" - not that nasty lower class trade stuff. This is the snobbishness of a past age revisited in the public sector - a rejection of business, of getting your hand dirty and the professionalisation of everything - from managing a bin collection service to delivering meals on wheels.

We can't afford such superiority any more.

....