A few months ago, the thought of Corbyn and his gang of magic money men was genuinely making me wonder whether we’d still have an economy by 2021. Ironically, the ruling Conservative party seem to have gone completely the same way; FREE MONEY FOR ALL!
Billions of pounds in furlough money, billions of pounds in bond purchases, negative interest rates, mortgage holidays, credit card holidays, small business grants…the fiscal hawk in me has pretty much fallen out of the sky by the now.
I cannot deny that the covid situation has caught the vast majority of governments completely off-guard but it occurs to me that government has become this vast behemoth which is directing and consuming ever more of our country’s time, energy and resources. Six months ago, I couldn’t imagine the urgent fervour with which so many people would anxiously be huddled around computers waiting for an update from the Government to dictate their very ability to leave their own homes, but here we are anyway.
The EU seems to be a few steps along from us in this regard; all nation countries will have to give up their national identity, share budgets, debt and most structures of societal governance. Our European brethren seem much happier to have large portions of their lives managed by people they’ve never met; it’s part of the price of a civilised society…but personally, I’d rather not have it as a main plank of my existence.
The fact that the UK narrowly voted to leave the EU several years ago indicates that we don’t want to share this socialist vision…but we only just voted to leave and by some measures actually didn’t at all. As a result, we now half a country that desperately wants to be subsumed by the EU behemoth and half a country that believes that being an isolated island with increasingly small degree of influence and economic impact is the best way forward. Again, I feel the truth of the matter lies somewhere in the middle, but the time for that conversation is long past.
This disagreement has spread through another area of political life. The size of government. The population of the UK has no clear idea of what it expects from government and that has allowed the public sector to grow larger and larger over time. In the UK, we now have an enormous amount of economic duplication which is a waste of both time and effort. Any assertion that the private sector, motivated by profit, isn’t concerned with helping the poor and under-privileged can easily be countered by pointing out the colossal lack of impact made by the public sector. The NHS is another great example; if it really was such an amazing facility, would there be such a thriving private sector alternative?
Unlike the public sector, which can always print more money, raise more taxes and borrow more bonds, the private sector is funded on its own merits by investors and borrowing from others in the private sector. If it doesn’t add value, customers don’t buy, investors withdraw capital and the company collapses.
The public sector has no such constraints. When was the last time you were listened to by a government or local representative? They do whatever they want, however they want, and with as much of your money as they want. If the public disapproves, good luck getting your money back (unlike the private sector) or getting the company shut down (unlike the private sector) or really having any ability to do anything other than go to the pub and moan about politicians for an hour or two.
The economic stress of this is significant; there are only one hundred pennies in a pound, and the more of them that are spent in the public sector means less that are invested in the private sector (in other words, the companies that employ most of us, pay our salaries and pensions and build the things we actually want in life as opposed to those things we are mandated to have by a Whitehall bureaucrat).
I was pretty hard on Corbyn’s magic money tree and I won’t be any less hard on Johnson’s. The economy is not some theoretical simulation that has no impact on our lives and when damaged, it takes time to restore – if it can’t be, millions of people will suffer catastrophic consequences with lack of food, water, healthcare, education and housing; let alone personal safety and security.
I don’t disagree that radical times call for radical measures, and I applaud the speed and decisiveness with which Rishi Sunak announced such a major wave of public support. But when we come out of the other side, I hope this country recognises that more taxes, more red tape and more bureaucracy is just as damaging to prosperity whether it comes from a politician in foreign politician in Brussels or one of our home grown varieties in Whitehall.