Friday, 13 July 2012

Our grandchildren may be United in a Kingdom of Austerity.

Austerity – it’s the byword, and excuse for dismantling the United Kingdom’s social structure, for ripping apart the fabric of society in these islands. Westminster’s OMB (Office of Management and Budget) predicts we’ll still be under UK wide Austerity in 2060, that’s two unborn generations away and more.

Unless we act our children will still suffer under Austerity’s yoke.

OMB paints a canvas, vividly and brightly, which demonstrates Austerity will be endemic, systemic and largely unrelenting throughout the next fifty years.

The reality of Austerity is that it is fundamentally required, needed because of the fiscal mess we find ourselves in, and that fiscal mess is one that has been created by a succession of governments, Tory and Labour, ably supported, aided and abetted by a largely compliant media and establishment [City] who all act in their own best interest.

Austerity is rooted in mismanagement. Governments at Westminster have for decades, if not centuries been what can only be described as criminally negligent in their fiscal obligations to the electorate.

In the last week there have been several such areas of UK mismanagement, though not portrayed as such by the media and with absolutely no highlighting by the Conservative/Libdem Coalition government. These instances ranged from armed forces redundancies to hospital trusts going into administration under the burden of onerous Westminster mandated PFI contracts.

Examining one case in point, the armed forces redundancies, shows how the fools in their palaces in Westminster continue to play roulette, swiftly becoming Russian roulette, with our finances.

20,000 armed services redundancies, at a time when the economy is recording contraction and rapid decline in historical terms makes no sense for even the most basic student of economics when the alternatives are examined.

These 20,000 will not be employed, unless it’s to the detriment of the others who are already unfortunate enough to be short or long term unemployed. What it will do is increase the pool of available labour helping to shrink or stagnate pay and employee benefits. There will be more chasing every job; they will be willing to accept less in fear the position will go somewhere else. We have just witnessed the same happening in the dairy industry, where the price received in many cases no longer covers the costs of production. Bankruptcy follows, the already wealthy creditors get the assets for pennies.

These 20,000 now ex-military personnel will require housing, they will require subsistence, and they will require the medical care that we all enjoy, but will now contribute nothing of value to society.

They will be a drain on the nation’s already overstretched resources. Many will not adjust. The savings will not be what the government projects, but may come close to 1/3 of the official number. Westminster doesn’t take into account in its trumpeted data the knock on effects of base closures on local economies either – it’s all about the quick fix to the MOD budget.

There is a potential that Westminster and the MOD may save £100 million or a little more each year with these redundancies. The 20,000 will each just be another hidden face of Austerity. The 20,000 are actually needed, the services require boots on the ground, the men and women in uniform are already stretched to the breaking point. Psychological issues and stress related disorders are on the increase.

This is a criminally negligent and foolhardy use of national resources. Consider instead adding 20,000 to the services, in a time of Austerity and contraction the extra demand will kick start several local economies and revive long standing traditions.

The forces personnel give the government back almost 50% of their pay in direct and indirect taxation, so the real cost to the government and us – the taxpayer, is minimised. The money must first be uncovered to pay these personnel before we can tax their earnings [rather than supplying non-taxable benefits]. The same department, the MOD, would be charged with finding the funding.

The MOD could scrap Trident – sell the assets no longer required, and raise what’s reported to be £100 billion over the next thirty years. The MOD would then have some £3 billion plus per year to put into service personnel, with these 20,000 additional troops estimated to cost some £500 million a year the nation saves some £2.5 billion while it stimulates the economy and enhances the recovery – that’s smart Austerity. Reduce the unnecessary and enhance the required.

Trident, that’s stupidity, that’s posturing, that’s criminal fiscal mismanagement under the current economic conditions.

Without intelligent financial management, so evidently lacking at Westminster, the OMB reports that Austerity measures will have to continue, they will actually be required to unearth an extra £80bn per year by 2061.

£80bn per year is close to three times Holyrood’s current annual budget.

In its yearly check, the Office for Budget Responsibility said Britain's public finances were "clearly unsustainable" over the next 50 years, despite George Osborne's round of spending cuts.

Even if the UK government succeeds in saving its hoped for £123bn over the next seven years, the OBR said it would need to impose permanent tax increases or reduce spending by 1.1% of GDP – about £17bn in today's terms – to return the national debt to pre-crisis levels. It will not eliminate the debt, or permanently reverse its upwards trending, simply put it back in historical terms to 2008 levels, and hopefully manage it from there.

If the government continued with current policies, and if those policies succeeded, the OBR said public finances would improve until the mid-2020s. But there would still be a long-term deterioration in the decades that follow.

The only way to achieve more is with additional burdens on the individual and accelerated dismantling of the social structures of the United Kingdom.

OMB had this rather ominous wording in its final report.

"On current policy, we would expect the budget deficit to widen sufficiently over the long term to put public-sector net debt on a continuously rising trajectory as a share of national income," the report said. "This is clearly unsustainable."

OMB is telling George Osborne and David Cameron, in no uncertain terms – “your policies are mince”.

Rachel Reeves, shadow chief secretary to the Treasury, said: "The OBR's report sets out some of the huge challenges facing policymakers over the coming decades, including issues like the rising cost of social care, which this government has so far failed to grasp.

"But the failure of George Osborne's economic plan will make things worse. We are already seeing how the double-dip recession is causing borrowing to go up and an extra £150bn added to the debt. And Britain will pay a very heavy economic and social price if we continue to have years of slow growth and high long-term unemployment. That is why urgent action is needed now to get the economy moving again."

Intrinsically, Scotland has a referendum and a choice. It’s likely in either regard we will see Austerity in action. However, wouldn’t it be nice, wouldn’t it be intelligent if we awarded ourselves the right to make it an astute process, rather than an Astute class submarine?

Shouldn’t we put ourselves in the position of deciding for ourselves what our best path out of Austerity should be? Will we enhance our military as we eliminate toys that were designed never to be used, or will we strip our service personnel below any semblance of previously considered realistic levels just so we can point at some pictures and say “see what we’ve got” – ignoring the people who are required to man our regiments as they languish on the dole.

That this will be their life under present policies is certain, unless they choose to become the latest Scots forced from our shores by Westminster’s politically inspired clearances, for with benefit cuts to unemployment, housing, child support, welfare, disability and widows they will be in the same position as our ancient crofters. They will leave our shores or they will starve. Today however there is no new “promised land” awaiting them.

Should we allow another nation to choose whether our NHS survives, or if it is privatised, for with Westminster’s fiscal leverage they have that ability, or should we decide for ourselves?

Under Westminster, the Austerity in which we already find ourselves will dictate every aspect of our lives for years to come. Furthermore, according to Westminster it will continue to do so for the next half century. In a Scotland where London holds no sway we have the potential to escape from its effects in a few relatively short years.

Irrespective, the ability to decide where the cuts are made, the areas to be excised should be our choice and ours alone. To choose otherwise is to give London the scalpel and pray they take the right kidney.


  1. Sorry Hazel but you are fundamentally wrong when you state that "The reality of Austerity is that it is fundamentally required, needed because of the fiscal mess we find ourselves in....". Austerity is not required, in fact it is a self defeating policy, the big crash of the 30's proved that and its solution was espoused by John Maynard Keynes. The western world abandoned the agrremen t on full employment and adopted the mantra that the market is always right. It was and is only right for the winners, the rich and powerful elites that we allowed to govern us conspired to enrich themselves at our expense. Money is no longer based on a physical asset like gold, it is fiat money, unrepresented by assets. It is only a promise to pay and you can always pay if you print your own money, inflation will reduce the debt to acceptable levels (effectively a back door way of agreeing with creditors to pay less.
    The Solution is for governments to invest in infrastructure (real assets) thus employing people who pay taxes, spend their money and thus creating demand which will in turn create more jobs with people paying tax and thus the counties income will exceed its expenditure.

    1. Did you read the article? I asked why are they laying off service men when it would be better not to. Paying tax etc, local investments etc,. However, I do think Austerity in wasteful areas.. such as Trident will more than help pay for many things.

    2. Yes I did read the article, I agree that they are cutting things they should not cut and not cutting things that they should but my point was that there are two ways to pay for a deficit. One way is to cut spending and choices gave to be made, irrespective of austerity it is obscene that they are paying for trident and at the same time pensioners are freezing and starving to death, that is ultimately about the society you want to live in. The other (more sensible) way out of deficit is to increase your income, Danny Blanchflower recently wrote about this but Jo Stiglitz, Krugman and Layard are equaly in favour of this approach. Alex Salmond seems to adopt this approach as well given that Stigliz has been appointed as one of the council of economic advisors. That of course ( to repeat myself) does not mean that we should not prodigies our spending on a more sensible and humane way that the approach taken by Westminster, it simply means that we can improve our collective wealth by earning more.

    3. Sorry about the spelling that was on my phone :(

  2. Hazel - you're right to bring this up, but just what do these UK size cutbacks mean in purely Scottish terms? Isn't it time we started to focus only on what it means to Scotland and forget about overall effects to the UK.

    Trident is a UK element but based in Scotland and soon to be shown the door by whatever means. We don't want it or need it, but we'll use the base for our own naval needs; that is, if Lord Fraser of Carmylie doesn't let it be blown it up in spite.

    Billions of quid were tossed down the drain when brand new Nimrods were ripped apart by cranes and that's a sickening reminder of the attitude we're dealing with here. Was that just for spite? That was our maritime patrol arm wasted.

    What army and service personnel are Scottish and could be mustered for Scottish operations on independence, but being scrapped before then? Will the air bases at Leuchers, Lossiemouth and Kinloss be fit for our purposes after the wrecking crews are finished?

    If we knew what the defence profile needs to be for an independent Scotland, we could argue the toss about these scrappings and it's time we put a figure to stop this wanton waste going on.