Full steam ahead for ship of fools

At the 2010 UK election, the Conservatives promised to eliminate the government deficit while Labour offered only to halve it.  Five years later, the deficit has been halved, yet Cameron boasts of this ‘achievement’ while Miliband attacks the cuts it necessitated.  Such is politics.

In 2010, 70% of voters thought the economy was the most pressing issue.  Now only 30% do.  Not only have many voters ceased to worry about the parlous state of government finances — they don’t even understand them.  Only 14% realise that total debt keeps getting bigger until the deficit (the gap between revenue and spending) is eliminated.

Because the government is still borrowing to finance its spending, Britain’s national debt has escalated from £1.07 trillion in 2010 to £1.6 trillion (82% of GDP) today.  Even with record-low interest rates, more is spent each year servicing this debt (£43bn) than on defence.  When interest rates eventually rise, this burden will become impossible to manage.  Britain will be like Greece.

Yet at this election, neither Labour nor Tories will explain how they plan to eliminate the deficit, still less start paying down the debt.  Both parties have promised they won’t increase income tax (except for the very highest earners), or VAT (Britain’s equivalent of GST), or National Insurance.  Nor will they reduce spending on health, education or age pensions — the big ticket items.

Clearly, then, neither politicians nor voters are taking the deficit seriously any more.  Instead, they argue about immigration (which as an EU member Britain can do little to control) and the NHS (still heralded on all sides as the ‘envy of the world’ despite poor health outcomes compared with other European countries with insurance-based systems).

So, with neither crew nor passengers looking where they are going, the ship of fools steams full ahead towards the iceberg.

 

Peter Saunders is a Distinguished Fellow at the Centre for Independent Studies.