A Letter to the Guardian - Part 94

A proper blog with my thoughts on Conservative Party Conference to follow shortly, but first more amusement in this week's Epsom Guardian, where my letter of last week seems to have struck a nerve with Dr. Ted Bailey of Larkspur Way:

I bashed out a vague reply on the train this morning. It will obviously be cut down extensively should I choose to actually send it in, but I thought I would post it here for posterity.

It would take too long to ‘fisk’ Dr. Bailey’s letter (‘Speed and depth of public cuts doom us’) in its entirety, but I do offer these brief points by way of reply.

I do not view my projections for the private sector as unduly optimistic. The private sector created more than 300,000 jobs over the Summer months. The lowering of business rates and cancellation of NI for the first ten employees of any new company point to this pattern continuing.

Dr. Bailey is also wrong to suggest that the UK has seen ‘already savage cuts’ since the election. I know of no Governmental cuts to Sure Start since May. As to the cancellation of the BSF, if he wishes to defend such a bureaucratic monstrosity good luck to him. He will have to explain the merits of a school building scheme where it can often take three years to negotiate the planning process before the first brick is laid on the building itself; a scheme that saw costs rocket from £45 to 55bn due to consultant spend and red tape; and a scheme that was already three years behind schedule in 2009.

The countries he mentions in his letter as currently heading toward ‘double-dip’ recessions make my point for me, in that they are examples of what can go wrong if high spending is not restrained over a prolonged period of time. Interestingly, I was going to use Ireland as an example of a country which successfully managed to heavily reduce its spending whilst increasing economic growth, in the 1980s, but was unable to do so for reasons of space. I welcome the chance to do so now!

A final note. Alistair Darling did not propose a slower cuts programme, merely a smaller reduction over the same time-scale; 40% structural deficit reduction in 4yrs, rather than total reduction as the current Government is planning for. However, with current interest rates on our debt coming in at over £100m per day, I believe cutting our debt completely in this time-frame is no longer an aspiration of an Opposition – it is a necessity of Government.

James Tarbit

Deputy Chair, Political

Epsom and Ewell Conservative Future

P.s. For the record, Conservative Future is the section of the Conservative Party for under-30 year olds. With a membership of approximately 20,000, it is the largest youth political organisation in the UK.

A Letter to the Guardian - Brown vs. Darling II?

This letter appeared in last week's Epsom Guardian:

Quite apart from the fact that they didn't have the courage of their convictions to actually sign their name (though I can probably have a stab at the author), I felt the letter warranted a reply. I wrote into the Guardian, and am hoping to have my letter printed tomorrow. For the purposes of space, I had to reduce my original argument by about half, so the longer version is included below.

Personally, I think it is extremely foolish for Labour to continue to frame their economic argument in the crass terms of 'cuts vs. investment', though I imagine those like Ed Balls will continue to do. Given Ed Miliband used his debut speech yesterday to state that the Opposition will not fight against cuts they think are necessary/right, it brings up an interesting point of conflict between the two. Balls' name is, of course, being widely touted for the Shadow Chancellorship. Surely Labour would not get themselves into another situation where the Leader is saying one thing, and the Shadow Chancellor is thinking something different?

Anyway - the letter:

I read with interest the anonymous contribution in your last issue, (‘Budget Will Put People Out of Work‘).

The letter, as with much of Labour’s reaction to the Emergency Budget, seems to be based on the fallacy – in part put forward by a recent Institute of Fiscal Studies report - that cuts in the public sector will automatically lead to vast, lasting unemployment. A closed argument that fails to take account of the Coalition’s welfare and business policies; the emphasis placed on getting people off benefits and back into the workplace, and on rebalancing our economy.

This economic recovery will be one fostered within the private sector, and to ignore this forms a circular argument that implies the public sector is the only possible workplace in this country. Given the grossly swollen public sector that they inherited, with its accompanying pension liabilities to the tune of £1 trillion, not included in any Labour deficit projections, shifting the balance away from the public sector would seem sensible, and crass attacks such as this are unhelpful.

The argument also seems to fly in the face of the figures. The UK’s GDP grew by 1.2 per cent in the last quarter. The additional cuts announced by the Coalition that your writer finds so unpalatable amount to 0.1 per cent of GDP by quarter. Cutting in this way is not a cut in economic revival, it is merely a cut in the size of the State. A European Commission study on defecit reduction found that out of 74 consolidations, economic growth accelerated in 43 cases. You need only look at the examples of Finland and Sweden to see the benefits of growth in this way.

However, this private sector recovery will not succeed if, as your writer alleges, the Government is ‘pulling the plug’ on business. I think a local example will serve to oppose this. When the local franchise of Puccino’s risked going out of business due to rent increases, it was the Coalition’s rate cuts that ensured it could keep trading. Cuts in business rates to small and large businesses alike are offering real support whilst the recovery gets underway.

In a week when the IMF has said the Government’s plans for defecit reduction are ‘strong, credible and essential’; in a month when Moody’s Investors Service has endorsed George Osborne and stated that not sticking to his plans could affect our AAA credit rating; in a Conference season where Alistair Darling comes out in favour of a strong deficit reduction plan, it seems a nonsense to view the economic measures currently being taken by the Coalition as ‘reckless’. What this country needed after thirteen years of fiscal profligacy and staggering beurocracy was a Government prepared to take the tough decisions in order to ensure economic revival. In the Coalition government, I feel we have it.

James Tarbit
Deputy Chairman, Political
Epsom and Ewell Conservative Future

P.S. There is one thing the writer and I can agree on, however; their analysis of why ‘most people join the Tory party’ – because they wish a smaller state. After thirteen years of beurocratic interference with front-line services and degradation of civil liberties, I think many people would sympathise!