The Brown Binge goes on
How’s the coalition government doing? You probably think things are going OK. We aren’t in Europe. We aren’t having a chaotic debt-driven meltdown. Nick Clegg and David Cameron seem to be getting along pretty well. And the Tories are slowly getting a grip on public spending.
But there’s a problem with this. You see, the Tories aren’t getting a grip on public spending. They talk about it a lot, as does the media, but the truth is that little is happening. The last decade has seen a 50% plus rise in real government spending in Britain, which has pushed the size of the state from 36% to 49% of GDP.
But no party has a plan to do much about it. Instead the coalition hope to keep spending roughly where it is. Their idea isn’t to make the debt problem go away by cutting spending, but to hope they can banish it with new and rising taxes and by increasing revenues from existing taxes (as GDP grows). So far there seems to be a party consensus that what analysts from Tullett Prebon call ‘the Brown Binge’ gets to stay.
This isn’t a good strategy. As Tullett Prebon points out, it reflects “an unwillingness to look reality in the face, and an abject failure to ask tough questions about the affordability of public spending, about the real outlook for growth, and about the burden being borne by hard-pressed taxpayers”. Ordinary people are living in a pretty grim world.
• Read the full editor’s letter here: The Brown Binge goes on.