Thursday, 29 June 2017

Finding the money

The way in which the Tories and the DUP have cobbled together a deal to keep May in power tells us a lot about the reality of government finances.  The cost of this isn’t just the £1 billion extra outside Barnett for Northern Ireland, it’s also the cost of abandoning badly thought through manifesto commitments on pensions, social care, and the winter fuel allowance.  (As a former Tory Chair put it, had the Tories actually put before the electorate the policies which they’ve now decided to implement, they might well have won the increased majority which May was seeking.)  The total expenditure over and above that implied by the manifesto is probably in excess of £20 billion.  Luckily for the Tories, they didn’t think it necessary to provide costings for their manifesto; had they done so, it would now be obvious just how many billions adrift they are.
That money has to come from somewhere, of course, and some of the discussion has talked about this being “taxpayers’ money”.  That implies that it’s coming from taxes one way or another, but that isn’t necessarily so; it could also come from borrowing.  Or the government could simply create more money.  In any event, finding a few extra billions isn’t a problem, because there really is a magic money tree (or even two) and the ease with which the government has agreed to find the money underlines that fact.  The obsession with reducing the debt is, and always has been, a smokescreen with which to hide an ideological commitment to a smaller state and an increase in wealth disparity.
The amazing thing is that, despite demonstrating time after time that the deficit isn’t a problem, the Tories can still make the media and other parties dance to their tune, and demand that they say how they will reduce the debt which the Tories are busy creating.  It’s a reflection on the quality of journalism today that they are getting away with it.

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