In his Autumn statement today, George Osborne has announced that the UK economy is growing. Whatever happens from here, he will forever be remembered as the Chancellor who made the cuts and tightened our belts. What we need to ask though is what his realistic choice has been?
When the coalition came to power, I seem to recall one outgoing Labour minister informing his successor that there was no money left. That government featured Ed Milliband as Energy secretary and Ed Balls as Education secretary. Both served as willing lieutenants to the Viv Nicholson of British Politics, Gordon Brown. The man who espoused prudence could spend money like few others. Judging by the comments made after meeting a Labour supporter during the last election campaign, it would also be fair to suggest that he didn't take kindly to the views of others either. It would seem that his protege Ed Balls has a similar tendency based on his responses today.
As a nation we have been allowed to become too dependent on the concept that the State will always be there to bail us out if we get in to trouble come what may. That has been a dangerous promise because our available resources, by definition, are always finite. Few seem to remember just how close we were to financial disaster in 2008. The current coalition literally had no choice but to make cuts. The welfare budget had long since got out of hand. The strain on the Health Service was also a huge problem which we continue to deal with today.
The news that our 15 year olds have done so badly at school is possibly the biggest of all indictments of the 13 years of Labour. This does not augur well for our future prosperity. It would serve us well to revisit an old mantra which praised the ethos of saving money rather than spending it. The latter was the problem with the last Labour government and it got ugly when there was no money left. If we are to be truly prudent (albeit that is now something of a toxic word in the light of it's abuse by Labour), we need to realise the merit of having something in reserve for days when we might need it. Having 33% unemployment among those leaving school is not surprising but it is avoidable.
I do think that George Osborne has missed one big trick in this announcement though. Capping small business tax is not enough. He really did need to cut it because small business will drive a bona fide recovery - not home buying. The latter is probably the single biggest factor which did for Brown and co.
As a country we do need to start taking the bull by the horns in terms of fossil fuel dependency so freezing the fuel tax escalator for petrol and diesel is not exactly progressive. This is just fire fighting. Far better to actually promote electric cars and renewable energy and reduce our dependence on fossil fuels.
As tempting as tax cuts might have been, Osborne has been right to resist doing so. We need to continue the reality check of making do with the essentials rather than reverting to back to a "have it all" mentality. Compromise is not that difficult if we all want a strong country.
It's also easy to forget that although our recent economic performance has been encouraging, we are not out of the woods by a long chalk. Now is not the time for complacency. We have to maintain the fiscal attitude and carry it in to and beyond the next government. Provided the latter doesn't feature anyone with the name Ed, this should be achievable.
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