Wednesday, 21 April 2010

David Starkey's fairy story

Historian David Starkey has produced a short film.

To a backdrop of magical music and ancient stonework, he tells an interesting tale:
Listen my children, for I am about to tell you a fairy story.

By children, I mean those of you who are not jaded or cynical, who love your country, and believe that even some politicians love their country too, and are prepared to put its interests above their party, or their pockets. Now, I know this is silly, but it is a fairy story.

My story is about a great country, far far away across the ocean to the west, and long long ago, almost 15 years ago, in fact, which is way beyond the limit of political memory. It is country of noble rivers, of great forests, of endless prairies, and snowcapped mountains. It's rich in natural resources; it even has, for this is a fairy story, a people who speak our language, and share our values. And yet, this great country was on the brink of ruin.

For this people ... who were so like ourselves, though far away, and long ago, had spent too much, both individually and collectively. Their government debt stood at 70% of GDP. Their budget deficit was 9% of GDP. But, just as it seemed as though this great country was going to go over the brink... the people chose new leaders, who were — and remember, this is a fairy story — wise, imaginative, and brave.

The result was the great change. Their leaders didn't pretend, like ours, that the necessary money could be saved by 'efficiency savings', or argue about minute amounts of National Insurance contributions. Instead, they stopped government doing things.

Regional aid, and Department of Industry budgets were cut by up to 60%. Public sector employment declined by a quarter. And lo, within three years, the budget was back in surplus, and stayed there. The currency soared, and the economy boomed. And, like children, the Canadians, for it is they of whom I speak, lived happily ever after.
Interestingly, it seems that the transformation occurred not under a Canadian Conservative government, as one might expect, but rather under Jean Chr├ętien's Liberals, who I always took to be the Canadian equivalent of Labour. I'll see if I can dig up more information to corroborate Starkey's account.

To be sure, Canada today is not without its problems, and they will be hit hard by the financial catastrophe brewing south of the border, but the story nevertheless gives a timely reminder that a concerted effort to tackle deficits and debts by reducing the scope of government can yield impressive results, and quickly.

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