Rob Wilson's Westminster Diary

Rob Wilson MP • Published 27 Nov 2008 12:00 0 Comments

See also:

FOR the past few years, people have said to me that "you political parties are all the same now, there's no choice".

I have had some sympathy with this view at times, but not now! A huge difference has opened up between the two main parties which will be the main battleground at the next General Election.

The Pre-Budget Report makes clear what that choice will be. Eye-watering tax rises from Labour, spending restraint from the Conservatives.

Most people understand, because they run household budgets that if you go on a huge spending splurge and run up debts, there should follow a period of sensible restraint. Save a bit, pay off the debts, get everything back on course.

Well, Britain enters this recession with one of the largest budget deficits in the modern world. The gap between the tax that comes in and the spending that goes out is likely to be £70 billion this year. Forecasters are pencilling in numbers of over £120 billion for next year. That's another £4,000 per family in taxes.

When the Conservatives handed over the economy in 1997, nobody doubts it was in excellent shape and performing strongly.

It should have been running budget surpluses for years, so that debt was paid off and money was put aside for a rainy day. Instead, the Chancellor decided to spend recklessly on the basis that he had abolished 'Boom and Bust'.

Of course he had not, because nobody can.

It meant that when Britain's economic prospects dramatically worsened there was nothing the Government could do.

The idea it's all come from America is ludicrous and the Prime Minister knows it. He hopes that if he keeps repeating this rubbish the public will believe him.

But the statistics don't lie and the only countries in a worse position than Britain regarding debt are Pakistan, Egypt and Hungary.

Now we're in this mess, Gordon Brown has made it clear he is going to add to Britain's borrowing problem (which soon could be a crisis) with an unfunded tax con. He is going to temporarily lower taxes, create a borrowing bombshell, and then raise taxes rapidly. He'll wait until after the election to do it though.

So there's the choice, because unsustainable borrowing now means one of two things later: higher taxes or spending restraint. So the big question is what choice does Britain take to defuse the borrowing bombshell?

Labour has chosen massive tax rises. They always raise taxes after an election and ministers have told us that's what they will do this time.

Conservatives are making it clear that instead we will go for spending restraint. Temporary tax cuts are no use to anyone, we want long-term sustainable tax cuts.

Haven't we all had enough of this Government's wasteful spending now? Do we really believe the Government can spend our money better than we can ourselves?

But we need tax cuts now to help the economy recover don't we? Yes, but not funded from more borrowing! We need targeted tax cuts funded from savings elsewhere.

But, the Prime Minister argues, every country in the world is borrowing to cut taxes because the International Monetary Fund, the European Central Bank and others have told them to - the Conservatives are on their own! Another whopper from Mr Brown, it's simply untrue.

By removing a few important words from these institutions he changes the meaning of what they say. Both have said that a fiscal stimulus is a good idea, but only for those countries that can afford it, i.e. those that have a surplus or low borrowing.

We have neither, quite the opposite in fact.

So if the Prime Minister knows this is economic madness, why do it? Simple, he has to hold a General Election very soon and he thinks a short reflation of the economy and a dash to the polls will give him a victory based on a message of "trust me, I've seen you through this, things are improving."

As a businessman I know this is a dangerous con. It would be a pyrrhic victory for all but Gordon Brown and one that will ensure our economy struggles for the next decade.

This blog appeared in Reading Chronicle 27 Nov 08

Return to the main index, get more from this section or browse our Opinion archives.

Follow @rdgchronicle