And so it goes on. Public sector borrowing in August was the highest figure ever.
Austerity rhetoric cannot mask the maths forever. Far from restoring sanity to public finances, the Coalition is presiding over appalling increase in public debt, which is expected to rise by over £100 billion this year.
The government said it would reduce the deficit by almost 5 percent this year. Data out yesterday suggests that over the second and third quarter of the year, the deficit is likely to have increased by almost a fifth.
These dreadful statistics show that if you run the economy the way Gordon Brown did, you end up in the same mess.
Just like under Gordon Brown, the Treasury is looking to various stimulus remedies to deal with what they still regards as a cyclical downturn. It is because of this that they have shied away from being much tougher on public spending. It explains why they have left the PFI taps running, merrily running up more off-balance sheet debt for the grand kids.
It is because of the Treasury team's misplaced faith in stimulus that they are happy to sit back and watch as the Bank of England embarks on another bout of print-money-and-pray madness.
Worst of all, the Treasury is so trapped in the stimulus frame of mind, it has simply not given enough thought to the fundamental problem of competitiveness. It is not just a case a new airport runways or tinkering with employment law. At a fundamental level, non-wage labour costs, energy costs and the costs of funding a bloated state bureaucracy are all far too high. If we want to produce wealth and prosper in the global economy, we need to lower them.
The Treasury still does not seem to get this. Until it does so, Britain will not prosper economically, nor the governing parties politically.blog comments powered by Disqus
"A revolutionary text ... right up there with the Communist manifesto" - Dominic Lawson, Sunday Times