Why the Telegraph is wrong to rubbish austerity – John Gelmini

Like Dr Alf, I think the title of the Telegraph article has an air of Marie Antoinette and “Let them eat cake about it” and Jeremy Warner’s photograph reveals a smug, overfed newspaper columnist, who hasn’t experienced “austerity” for a very long time, if ever.

The article fails to deal with the misery of austerity on its own and we are supposed to think that it is a case of being either a big state spender or a little state spender.

The possibility that one can earn foreign exchange through expanding exports, attract foreign investment from wealthy foreigners by making the tax system more attractive, that one can issue infrastructure bonds to bring in Sovereign Wealth and that by lowering Corporation taxes one can bring the trillions concealed offshore back onshore seems to have escaped Jeremy Warner. Warner, like the Westminster politicians likes to use the old TINA (There is no alternative), argument to support the idea of wreaking financial hardship on ordinary people, forcing the feckless and stupid to rummage in food banks whilst at the same time allowing Times 1000 CEOs to go on receiving “rewards for failure” and the income gap between those on average pay of £27,000 gbp a year and those at the top to be 450 to 1 and widening.

Germany, Sweden, Norway, Denmark, Singapore, Finland all of which have higher standards of living than us, and better managed economies, do not have income disparities like that (Germany’s is closer to 25 to 1).

So the question people like the overfed Jeremy Warner, and our political masters, need to be addressing is what else these other countries are doing that allows them to succeed and us to pretend that we are suddenly moving into the sunlit uplands because of George Osborne‘s “austerity”. The reality is that we have a consumer led expansion of credit which is benefiting buy to let landlords and driving up house prices whilst SMEs are starved of bank lending.

The sell-off of the Royal Mail and the privatization of the police, and bits of NHS provision will create one-off sums of money, whilst the transfer of traffic policing to the Highways Agency, will ensure that the massively increased traffic fines will go directly to the Treasury from 2014 onwards.

Meanwhile, the City of London moves steadily into decline as Singapore and Hong Kong move up on the rails to overtake New York which overtook London as the world’s leading financial center in November 2012.

Of course, the build-up to the 100th anniversary of the outbreak of World War 1, will provide a useful distraction for the balance of this year and doubtless the first footsteps of Royal baby George will provide another distraction until electioneering moves into full swing.

These events and what is happening in the Middle East or may yet happen take people’s eye off the ball in terms of our lamentable productivity, now 16% below the average for the G7, our lack of exports and our decline relative to other countries in terms of our ability to pay our way.

These issues do not sell newspapers but letting people wallow in nostalgia, the glow of past achievements and trivia does.

Jeremy Warner and his fellow “Let them eat cake” aficionados in the Westminster Village, the “Squirearchy” and the plutocratic elite will be pleased with themselves but have no reason to be.

John Gelmini

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