That was the quote left by
Labour’s Chief Secretary to the Treasury in 2010. It was a joke – but like many
jokes it was true.
And whatever criticisms are made
of the Government’s economic and welfare policy that fact mustn’t been
forgotten: there isn’t any money to do all the things people would otherwise
like to do. The public finances were left in a real and unsustainable mess and
most of the growth in the 2000’s was artificial on the back of borrowed money
fuelling asset price inflation (mostly houses).
A further constraint is that
unlike say Italy or Japan, a lot of the money the Government borrows is lent by
people and organisations in other countries. Any interest therefore is paid
away from the country and becomes a real cost to the UK economy. It’s therefore
essential – really essential - that the Government keeps paying low interest
rates – hence the initial determination to keep an AAA credit rating.
From the beginning the Government
has had to balance:
- the need to get public spending
under control
- the need to do it in a way
broadly acceptable to the public
- the benefit of growing the
public sector
- the need to reduce the
riskiness of banks by reducing their balance sheets and increasing their
capital strength
- different priorities of the two
parties in the coalition.
And from the beginning the
approach to cutting the deficit initially maintained the credit rating and even
when it was reduced interest rates on UK government debt remains low
The latest budget has to be seen
in this context and it is a good effort to provide some stimulus and help to
the economy at a time, to repeat the quote, when there’s no money left. And criticisms of it should reflect the fact: there's no money left.
That informs what the Council has to do. As I've said before, I care about spending money wisely. Quality is important but so is value. Even more important is being transparent about how the money is being spent. It comes from taxpayers: they should be able to see where it goes. I note that the Council tax demand which I've just received does not, as in earlier years, include a summary of next year's budget or this year's outturn. Or, if they were concerned about wasting paper, a reference to where a summary can be found easily. That's a shame and it's something I'd want to change.