Wednesday, 20 October 2010

A Right Bloody Mess

Well, from what I can see, the coalition government's "spending review" is already in chaos. Just one example is the fact we'll have aircraft carriers but no aircraft to fly from them. My opinion on that score is already known, but it does underly the panic in whitehall and the hurried thinking thats going on.

The independant nature of our armed forces is effectively to end, with large holes in our future capability.

The next furore is the number of jobs that the government acknowledges may be lost as a result of spending cuts. The photo of Danny Alexander reading the draft copy of the spending review (whether deliberately or by accident) leaks the figure of 490,000 public sector jobs to be lost, with associated private sector jobs to go of a similar magnitude: some million jobs could be lost as a direct result of the spending cuts.

However, here's the dillemma: David Cameron doesn't have the luxury Margaret Thatcher had of North Sea Oil revenue and the sale of public owned assets to pay for this huge increase in unemployment. So just where is the money coming from to pay for this huge increase in unproductive labour?

Growth is set to be flat for the foreseeable future, so the only other way of funding the increased welfare bill is increased taxation. One might hope that all the recent immigrants from the East European EU countries bugger off back home to help reduce welfare costs.

All in all, so far all I've seen of the so-called "Spending Review" is a dogs breakfast of hurried policies and cuts, with very little aparrent thought going into where the axe falls.

Considering the Cameron/Osborne double act had many years to plan various scenarios for reducing the debt legacy left by Labour, I'm not at all impressed by the aparrent ad-hoc nature of government spending policy.

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