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I am not being cynical but, I do fail to understand all the fuss and faux anger aimed at the Emergency Budget the other day in some sections of the media as well as by deposed politicians such as Harmon, it is a total joke if not a pantomime. The reality of course is for all these people is to maintain the fiction that they are important and their job “matters” in some way – hilarious !

According to them, George Osborne and David Cameron have “duped” their LidDem Coalition partners and have set the Country on the road to a “Tory doctrine inspired Hell” whereas the reality is rather more simple: We have a massive Budget Deficit which includes a “Structural Element” of some £70 billion annually, the choice is to start cutting early or, keep trying to hide under the Duvet in the vague hope that it “might go away”.

Sorry George but…

I am sure that George Osborne is a very clever chap and as Shadow Chancellor has no doubt been refining ideas and principles whilst in Opposition with a view to implementing them if ever he got to power however, theory is one thing, reality another. I do not imagine for one moment that George Osborne has mastered the minutiae of the UK Tax and Benefits system in the 7 weeks he was in Office prior to delivering his Budget and anyone who thinks so is a total Muppet.

The likely truth probably goes along the following lines: As I wrote several times on this blog at the time, my gut feeling was that we should have had the General Election last Autumn but for the sake of Brown’s vanity, he insisted on clinging on to power. From then but likely for some months before that, the top Civil Servants and brightest technical people at the Treasury, have been working flat out on mapping out the potential choices facing a new Government. That Government could be Tory, LibDem, a revived Labour one minus Brown or indeed, a coalition.

By the time the Coalition was formed, these Civil Servants would have produced a “pick and mix” menu of what is possible; “Yes Minister, you could do that but because of the impact of doing so, you could not also do that…” The point being that our Tax and Benefits System is by now so complex, it is only the deeply ‘nerdy’ technical people inside the Treasury who have a clue as to the likely “unintended consequences” of any action a politician may want to take.

Reality

Politicians can dress things up to show that “They are in charge and steering the Ship of State…” but the truth is that all politicians can do is create “Mood Music” and that is important because politics is the art of the possible and generating a “feel good factor” or “unity mood” as we are all in this together can often be the crucial element in solving quite large problems if it generates business confidence.

Governments big or small, of themselves have little positive to offer society apart from creating the right mood and environment/framework for society to work within. As an example, Governments do not create anything, they certainly don’t create wealth which can only come from the private sector. Bright politicians quickly get to understand this but people like Gordon Brown and one suspects Tony Blair, were too stupid and likely “fiddled” with things far too often personally with dire consequences for all.

To further illustrate this kind of practical reality, one only has to look at Afghanistan and the Opium crop: A bright person might say; “Why don’t we buy the whole Opium crop ? That would solve the problem at a stroke !” On the surface this would seem a reasonable approach, the farmers get probably very little money compared to the “Street Prices” for the finished product. But that said, a senior Civil Servant from the Foreign Office with experience of Afghanistan would point out just why it wouldn’t work.

Afghanistan is both Tribal and totally corrupt so all that would happen is that the farmer’s income would increase overnight as the bulk of the crop was sold to NATO but because the crop was ‘skimmed’ and that percentage sold on the Black Market. Because of a reduced supply, the price would go up dramatically along with the violence. On top of that, the Poppy crop becomes protected from being destroyed by NATO and the cash flow to both the Taliban and local Warlords increases also.

Back to the Budget

The ‘lefty press’ and Harriet Harmon attacking the Coalition Government over its measures is both funny and sad because if Labour had remained in power, the consequence for the UK economy would have been the same, particularly over the rise in VAT. Sure there would have been slight differences as Labour picked a slightly different medley from the “Pick and Mix” tray offered by the Treasury Civil Servants but the fiscal balance to this Budget would have been identical in terms of any money given away matched by increases elsewhere and overall major increases in the tax burden.

This is not rocket science. We have a major budget deficit problem and whoever was the Chancellor has only three tools to use in getting the job done: Reduce the number of Government employees, abolish some State Benefits and raise taxation, all people are arguing about is the balance of the mix between them, the annual figure will remain constant that needs to come out of the economy, whether that is £45 billion or £75 billion per year.