Planned austerity or unplanned austerity? – Rodney Willett – A response from Dr Alf

English: US President Barack Obama and British...

English: US President Barack Obama and British Prime Minister David Cameron trade bottles of beer to settle a bet they made on the U.S. vs. England World Cup Soccer game (which ended in a tie), during a bilateral meeting at the G20 Summit in Toronto, Canada, Saturday, June 26, 2010. (Photo credit: Wikipedia)

MANCHESTER, UNITED KINGDOM - OCTOBER 03:  Brit...

MANCHESTER, UNITED KINGDOM – OCTOBER 03: Britain’s Prime Minister David Cameron runs along a canal early in the morning on the second day of the Conservative Party’s annual conference on October 3, 2011 in Manchester, England. Chancellor George Osborne is expected to confirm a freeze on council tax for the second successive year during his speech at the Conservative Party conference. (Image credit: Getty Images via @daylife)

Mmmm....cake.  And government info.

Mmmm….cake. And government info. (Photo credit: emkeller)

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Rodney Willett sent me a tweet and invited my views on the following article. His article is well worth a read and I set out my response below.

A Devonian’s Political Blog.

Regular readers of this blog will know that I am passionately:

I favour a balanced model:

  • Growth AND
  • Austerity (targeted over the medium term)

My political views and my inherent bias are on record on my blog. You may wish to check this out!

Unlike Prime Minister David Cameron, I am proud to declare my political views but respect that they give me an inherent bias in my views of the World and indeed colors how others view me.  My political beliefs in summary are:

Returning to Rodney Willett’s article, I believe that UK Chancellor George Osborne has embarked upon “Unplanned Austerity“. Osborne has applied the bacon-slicer and top-sliced the Public Sector‘s budgets, with cuts falling on front-line services like healthcare, education, and military capability.  David Cameron’s Government has been proven to be an omni-shambles on Public Sector Reform. Let’s be clear, David Cameron’s Government does not have:

  • Strong leadership
  • Overarching vision
  • Coordinated and carefully analyzed strategy, and
  • Fully risked assessed, properly costed  and effectively managed delivery plans

However, I agree that with the UK’s debt levels, there is a place for carefully “planned austerity“. Personally, I believe that former Prime Minister, Gordon Brown,  made the right judgement calls in the financial crisis of 2008 and was a powerful player on the international stage at that time, unlike his successor David Cameron who has reduced the UK’s influence in the World.

What is required is, first and foremost, huge stimulus to increase demand, with massive incentives for both public and private sector capital spending, with the Government underwriting guarantees. At the same time, the Government must announce properly costed and risk assessed “planned austerity” program,  targeted at comprehensively remodelling the Public Sector in the medium term, with serious consolidation, de-layering, reduced pay levels, transformation and widespread outsourcing.

Of course, the above model is generalizable and equally applies to the EU and reducing the EU bureaucracy. It would also be appropriate for a 2nd term, President Obama. In many respects, a twenty-first century Marshall Plan is required to stimulate growth – Christine Lagrande, Managing Director of the IMF would be an ideal sponsor.

What do you think?

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4 responses

  1. Pingback: Dr Alf’s top twelve blogs in Aug. 2012 « Dr Alf's Blog

  2. Pingback: Planned Austerity and Devolution of Power – Dr Alf responds to Rodney Willett « Dr Alf's Blog

  3. Pingback: Planned austerity or unplanned austerity? – Rodney Willett – A response from John A Gelmini « Dr Alf's Blog

  4. Rodney Willett has a point but we do need a reasonable and planned injection of credit from the banks because initiatives like the Bank of Essex (a joint venture with Santander and Essex County Council), Foundation East based in Suffolk and the emerging “Bank of Cambridge” are not enough to replace bank lending for SMEs and not enough to fund new startups by school leavers who will otherwise never work because of complete lack of growth.

    Globalisation was originally a mental construct of the Bilderberg Group and has resulted in a nett loss of jobs in the West mirrored by a corresponding increase in the number of jobs in China, India and the rest of the Far East.

    Eventually this will lead to a loss of military power as we will not be able to afford it any longer.
    This is evidenced by the Navy risk register, which now shows that one nuclear submarine which is part of our deterrent, will have to remain in dock because of a lack of submariners and the fact that we now share aircraft carriers with the French and cannot protect our own coastline for lack of ability to afford a coastal protection vessel.

    As an island, we need to able to protect our sea lanes and trading routes, something which Henry VIIIth, one of England’s great kings recognised hundreds of years ago when he laid the foundations for us to become a super power.

    Twice we have nearly been starved to death in two world wars, yet those lessons have already been lost on our vacuous and extremely lazy Prime Minister, who is content to let more expensive food imports into the country, our young people to languish on the dole and our businesses to be starved of credit.

    We can reduce our deficit as has been suggested in the latest post above and by reducing the number of public bodies involved in administering public services and by strictly controlling staff numbers.
    Outsourcing of non-core functions is a given but we should where possible keep those jobs here and not offshore them so as to keep the tax revenues here where they belong.

    We must also look at our population size and composition.

    There are 35 million, too many people for our physical and financial resources (current population 63 million officially plus 4.5 million illegal immigrants and 250,000 new migrants a year) and too many, very costly, old people, often living in subsidized council houses at below market rents and costing the NHS and local authority budgets dearly.

    Our public services would cost a lot less if there were fewer people so measures like a new Assisted Migration Programme to reduce population numbers need to be pursued.

    We have 16.5 million people who are not working and not producing out of a potential workforce of 32 million. We need the economy to expand so that the dole bill is reduced and the proportion of those not engaged in tax and wealth generative employment falls to less than 20% of all people in the workforce.

    Similarly, we need to take action to improve our abysmal productivity(60% in the private sector and 40% in the public sector) which is 15th in the world and our poor value per taxpayer pound (17th).

    To improve our national top line we need:

    –An export programme of substantial proportions,faster writing down allowances

    –Language skills training

    –A competitive tax system

    –More innovation

    –Inward investment from the wealthy from overseas

    –Enterprise education

    –Money from Sovereign Wealth Funds for infrastructure solicited by Boris Johnson who has not insulted any foreign leaders of countries like China in the way David Cameron has and Margaret Thatcher never did in 18 years of office.

    –A real effort to recover money stolen from taxpayers by the rich and powerful.

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