Monday, 19 April 2010

Luke Johnson: the country is living beyond its means

Through The Last Ditch I discovered an article in the Financial Times by entrepreneur Luke Johnson.
Unquestionably this is no ordinary election. Britain has suffered 13 years of Labour rule, and the country is in a desperate state. It is like a company slithering towards bankruptcy. And, like any business that has to be turned round, there is one absolute rule to fix the mess: change the management. If there is no transformation at the top, then I fear we could become a bigger version of Argentina in 2001.

It is hard to comprehend how much damage Labour has done to our economic prospects, but I suppose that, like a frog in simmering water, if the heat is increased gradually, you almost fail to notice the pain – until it’s too late. The most damning statistic is the following: the state’s percentage of gross domestic product in Britain has risen from about 38 per cent in 1997 to perhaps 52 per cent today. Funding this vast amount of public largesse means the UK borrows 25 per cent of all its state spending. Clearly the country is living beyond its means.
Since 2008, in spite of a downturn, most British citizens have stayed in work, inflation has remained subdued – but the state has maintained its profligate spending habits. There is a belief that the worst is over, and that recovery is upon us. This is a dangerous illusion. The private sector is fragile, capital formation anaemic, productivity and competitiveness are inadequate, and industry has structural imbalances. Borrowings must be repaid, and this will lead to public sector job losses and higher taxes. The day of reckoning has been delayed by a venal Labour administration so intent on clinging to power that it has compounded the problems facing our nation.
There is much to despise about David Cameron's Conservatives, but like me, Johnson seems to recognise that our nation's financial future depends on them winning a majority, discarding their socialist masks, and cutting deep. He concludes:
So although I am neither a donor nor member of the Conservative party, nor do I have any party political ambitions, on this occasion I feel passionately that Labour must be thrown from office and a government formed with an adequate mandate – because more Labour is a form of national suicide.

No comments:

Post a Comment