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Devolution: Learn How to Lead…

Guest blogger St Etienne considers that an end to what he describes as ‘the immature and irresponsible behaviour’ of devolved politicians is the one cut that could command popular public support in the post-CSR period…

Reproduced from HM Treasury flickrstream

Both the SNP and Labour have huge opportunities to tell a story not just about standing up to London and for Scotland, but taking national leadership, and telling a narrative which is about the kind of public services we want. And central to this is challenging trade unions to be constructive, proactive and imaginative in a way they haven’t been about work, jobs and organisation since the heyday of Upper Clyde Shipbuilders nearly forty years ago. Whoever can dare to move out of a bunker mentality could position themselves well for years to come, long after recession and ‘cuts’ have become part of our national folklore like the 1980s and the poll tax.

As Scottish commentator Gerry Hassan broke ranks last month to call on their regional government to display a sense of leadership in the ensuing government cutbacks, on our own Northern Irish politicians should display a similar sense of leadership.

As it stands however the regional fiefdoms are awash with non-revenue raising politicos telling us how the Westminster government is penalising our poor souls with unnecessary cutbacks, pertinently without giving any form of solution to the deep rooted issues themselves.

It’s easy to glibly shout ‘NO CUTS’ to your budget when all you do is sign off on where the money goes without thought for where it is coming from i.e. we the taxpayers. If the dire straits exhibited by Greece earlier this year weren’t reason enough to mobilise the forces of austerity, you’d think the latest in a series of economic beatings our neighbours down south have endured since would have concentrated minds on the threat lurking just under the surface.

Not so.

One of the largest party’s at Stormont initial reaction was to behave with all the statemanship of a child who wants their ball back, while the other remains ambivalent at best (Sammy Wilson excepted). As we have come to expect SF later came out with a last minute PR exercise in ‘pretendonomics’ that gave the papers something to write about for all of a day. The usual pie-in-the-sky waffle a few days before the decision was to be announced, one that was likely already made. A cynical move? An immature one more like.

Hassan as I understand it is a respected figure among those Ostrich-like elements in Scotland who still have the perennial opposition/protest politics mindset of problems always being someone else’s fault. The similarly cringeworthy ‘Say No to Tory Cuts’ spiel wheeled out as an attempted ‘campaign’ by Sinn Fein provides a mirror image in responsibility deficiency.

Refusing to face up to economic realities in a mature manner is far from the sole preserve of the regions. In my opinion it’s a social disease borne out of the dawn of the welfare state and the days of the baby boomer generation, where slowly but surely an inflated sense of entitlement has turned many to be drip fed zombie like by the never ending cycle of government programmes and stimuli.

As spending masters, the executive will have to show leadership sooner or later and decide what fiefdoms will bear the cost. There is an obvious risk that once left up to Stormont the whole thing will descend quickly into farce.

As the devolved administrations belatedly become tasked to earn their keep – who’s to say if they don’t get it right they should not also be in line for the chop?

St Etienne

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Filed under: business, Coalition Government, devolution, economy, guest blogger, , ,

8 Responses

  1. fair_deal says:

    Your analysis omits that the only devolved region to successfully implement cuts in this financial year was NI (with Wales spreading ti and scotland delaying it)

  2. st etienne says:

    Well, it’s a start I guess. However there is the danger that fiddling about a bit with a few figures here and there passes as bold government decision making – reference each of the local party’s ideas on the economy

  3. Progressive Unionist says:

    This piece seems entirely in the spirit of those Tory backbenchers who brayed and cheered while Osborne announced his cuts…. ideologically delighted to be hacking down “the state” without any cognizance of the terrible effect these Tory cuts will have on middle/low-income working families.

    The highly respected and neutral Institute of Fiscal Studies states that these Tory-LibDem cuts will fall disproportionately on the poor and on low-income hard-working families.

    Many top economists such as Joe Stiglitz and Nobel Prize Laureate Paul Krugman are saying this Tory recipe of massive spending cuts is suicidal for the British economy.

    While we need to bring down the deficit we don’t need to do so too fast, too soon.

    The Tories (with their Lib Dem accomplices) are playing fast and loose with the British economy – they want to cut way too fast, way too soon, because they’re still trapped in their divisive Thatcherite ideology of forcing middle-Britain to pay for the fook-ups of the Tory bankers and the Tory “financial wizards” who caused this depression/recession.

    • st etienne says:

      Incorrect.

      For starters Paul Krugman is in my view cheerleading a largely discredited economic theory, as evidenced by the fact it’s currently being played out in the US under the auspices of the Democratic Party. He has no special insight into the UK economy; there are many who say he has none into his own. Stiglitz is no different.

      Secondly no one is under any illusions about the pain here. The point is thanks to the structural short-termism built into the current mainstream democratic process it’s been allowed to build up for decades.

      The pain is better felt now while manageable rather than heap even more pain on future generations. The yelping from the media as various funding sources are turned off at the tap is cringeworthy and shows just how unjustified our ‘entitlements’ have become.

      The cuts hit the upper middle and lower class. They hit everyone because everyone must pay for living beyond our means previously. If the poor get hit more because they are the group who have been living beyond their means the most.

      At the end of the day you cannot live beyond your means in perpetuity. Fundamentally it is not government’s responsibility to attempt to support this notion, it is government’s responsibility to break it.

      I say that as someone who does not want to pay for it in the future.

      Have those protesting the cuts anything to say to the children they would condemn to paying for their demands?

      Lastly the ‘financial wizards’ who caused this were a bunch of academic minded professionals reacting to market demand for products they didn’t understand. Financial awareness is partially but not wholly the preserve of the person selling the product. Society bought into the game – particularly so in the last decade – because it guaranteed to extend the standard of living to which it had been accustomed.

      It was a stimuli of cheap money. Exactly the sort of fallacy Keynesian economists such as those you reference are still advocating today.

      And it’s neither a trait solely of the right nor the left. It was endemic to the country as a whole.

  4. Seymour Major says:

    PU

    Many top economists such as Joe Stiglitz and Nobel Prize Laureate Paul Krugman are saying this Tory recipe of massive spending cuts is suicidal for the British economy

    Well, the money markets gave the “thumbs down” to Labour’s budget last March and gave it the “thumbs up” to the coalition’s plans.

    The one good lesson that Conservatives learned was that they should not be influenced by leading economists. They were right to ignore them in the 1980s

    http://www.telegraph.co.uk/comment/personal-view/3623669/How-364-economists-got-it-totally-wrong.html

    They are right to ignore tham now. Today, we had the release of the latest GDP figures for the last quarter – 0.8% not the 0.4% feared. This is set to put the tails between the legs of the doommongers. As James Forsyth of the Spectator writes

    Perhaps, the most important thing about the 0.8 percent growth figure for the third quarter announced this morning is that all but 0.1 percent of it came from the private sector. The strength of the private sector in this quarter suggests that the coalition is right to think that the private sector can more than make up for the jobs that will be lost in the public sector over the coming months.

    http://www.spectator.co.uk/coffeehouse/6416633/a-double-boost-for-the-coalitions-economic-strategy.thtml

  5. Progressive Unionist says:

    Seymour I very much hope you are right about the private sector picking up the slack, because otherwise we are heading straight for a double-dip when the 500,000 public sector workers are laid off and have nowhere to turn for jobs (and nowhere to turn for money except JSA and Housing Benefit!) – for lower-paid public sector workers, the State will end up paying them almost as much in JSA+HB as it’s paying them in wages, while of course losing the services the State gets by employing them for 35/40 hours a week.

    St. Etienne – “At the end of the day you cannot live beyond your means in perpetuity.” – this is very true on an individual level, but rather counter-intuitively it doesn’t work for states. The best thing for states to do is to spend while the private sector is weak, and pull back to some extent while the private sector is strong.

    You might say Krugman and Stiglitz are peddling discredited economics – I couldn’t disagree more. Obama’s economic stimulus – far lower than Krugman would have liked – did manage to stave off the prospect of a 1930s style depression.

    In fairness, we may have our disagreements about economics – but an objective observer would say the jury’s still out. Indeed Obama’s recipe of economic stimulus (although not going so far as Krugman or Stiglitz would recommend) and Cameron/Clegg’s austerity massive cutbacks present a very interesting contrast – a fascinating economic experiment were it not for the millions of real livelihoods at stake.

    Me I think it’s nuts to be withdrawing money from the economy at a time when the private sector is still barely off life-support, but for the sake of millions of British working families I hope I am wrong – and doubtless we shall see what happens to the Clegg/Cameron’s economic recipe over the not too distant future…

    • st etienne says:

      and likewise that of Obama’s – whose spending policies are raising the ire of middle America with each passing day. The ‘tea party’ fad over there may not know what they want but they know what they don’t. Personally I think the number one concern for the US is a 90s Japan style ‘lost decade’ of stagnant growth, or indeed deflation.

      Burning through the cash now, and simultaneously cheapening the debt with quantitative easing raises the risk of simply running out of gas.

      In terms of weak private sector back in the UK, as well as echoing Seymour’s point on actual reported growth – with the caveat that these numbers tend to be notoriously inaccurate on first pass – I would put forward the belief that expecting state spending to support things recreates the same moral hazard that helped bail out certain banking institutions.

      Hindsight will be 20/20 but one thing seems certain – the balance of world power is shifting.

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