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Si1

Frank Field Sounds Like A Tory ?

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Bribing voters with their own money is no longer an option

http://www.telegraph.co.uk/comment/6179934...-an-option.html

This election will be utterly different from the 17 before it - because parties will be judged on how they cut, not how they spend, says Frank Field [From Wikipedia: Labour MP for Birkenhead, From 1997-8, he served as the Minister of Welfare Reform, He has since been one of the Labour government's most vocal critics from within the party on the backbenches. ...Field's political stance has been somewhat at odds with the rest of the Parliamentary Labour Party in recent years.He is a member of the advisory board of the free-market think tank Reform, and of the new conservative magazine Standpoint. In May 2008, he said that Margaret Thatcher "is certainly a hero" and that "I still see Mrs T from time to time ��" I always call her 'Mrs T', when I talk to her."Although there have been attempts to get him to defect to the Conservatives, they have been without success. In 2008, Frank Field was named as the 100th most-influential right-winger in the United Kingdom by the Telegraph]

When asked by the Telegraph this week how he would like a Tory government to be remembered, David Cameron's answer was clear: "We sorted out the deficit."

History will indeed judge the next government by whether it walks the walk on public expenditure and provides a titanic dose of sanity to the public accounts. However, an election will have to be won first. And on this make-or-break issue, Cameron is now up against Alistair Darling, who is the first member of the Government to state publicly that the election will be a fundamentally different affair from the 17 before it.

The point is that ever since 1945, parties have competed for votes by promising to expand public expenditure. Bribing voters with their own money has been the order of the day. Now the tables have turned. Parties will be judged on how effectively they cut the size of the budget.

So voters are beginning to look for clear answers on two fronts. Will reducing public expenditure be dealt out in the old-fashioned style of cuts across the board? Or will a new government use the need to slash public expenditure as an agent to shape a new radical politics?

The reason this is so important is that this is no ordinary set of economic circumstances. All previous post-war recessions have seen the economy move back fairly quickly to what is called its long-term growth rate. This recession, however, has damaged the structure of the economy: the Institute for Fiscal Studies calculates that it has wiped out nearly five per cent of our total wealth. That means the country is permanently poorer, and will take well over a parliament just to restore its lost wealth.

The uniqueness of this recession also shows in the public accounts. In all previous recoveries, tax revenues have been quickly restored. Not so this time. The Government admits that, even with the economy growing once again, there will still be a gap of £80 billion in 2013 between revenue and spending.

So far, it has been successful in confusing the need to borrow over the shorter term, to make good the loss of revenue that comes with any recession, with the borrowing needed to make good this permanent decline in the tax take. Each week, the Government shovels out another load of debt on to the gilt market. Despite our printing money to buy back debt under quantitative easing, the task of selling more has been far from easy ��" and there will be something like 35 further debt auctions between now and the next general election, with each week's batch of IOUs proving harder to sell.

The reasons are simple. Quantitative easing is coming to an end. Britain is borrowing proportionately more than any other major economy, and lenders have a galaxy of countries from which to choose. When the Government is unable to print any more new money to buy its own debt, the market will insist on higher long-term interest rates. This will not only make it more difficult to sustain an economic recovery, but it will increase the cost of servicing this debt.

Here is the basis of the next decade's politics. Whoever wins the election will have to plan to hand over an increasing share of our national wealth, first to meet interest payments, and then to repay the debt itself. These transfer payments will cut our country's living standards.

Hence the importance of spelling out the nature of those public expenditure cuts. The sooner they start, the lower the long-term interest rates, and the smaller the amount of our future income that will have to be impounded for debt repayment.

My guess is that the Government will find it increasingly difficult to join this debate in any meaningful way in the long run-up to the election. So here is the big threat to Mr Cameron ��" and his great opportunity. The tougher the Opposition leader is in spelling out his policy on cuts, the more favourable will be the immediate market reaction, and the level of long-term interest rates so crucial in deciding the size of the final repayments.

The conventional wisdom that tells leaders not to inform voters about any pain that is coming is about to be turned on its head. A strategy based on cuts can now be refashioned from a reactionary into a radical manifesto. After all, Labour has nearly doubled public expenditure, but the gains the electorate hoped for have fully yet to materialise ��" so the way is open to argue that a radical strategy can achieve those improvements by spending less money.

Here are two examples that need to be replicated across the whole of the Government's budgets. The first is the muddle over pensions reform. Ministers plan to add an extra 5p to the standard rate of tax, which will still leave 40 per cent of pensioners on means-tested assistance. There is, of course, no way this money can be raised.

A truly reforming government could set itself the task of abolishing pension poverty by building up a compulsory funded scheme around the current pay-as-you-go state pension. It would mean that today's workers would have to put more of their pay into savings, but they would own their own assets, and gain a guarantee that no one would retire into poverty.

Such a reform would see the current £15 billion spent on means-testing for pensioners fall to almost nothing over the decades. Simultaneously, the Government should announce that its only goal in pensions was to secure that decent minimum for everyone, phasing out over a similar period the almost £40 billion taxpayers currently spend each year on subsidising pension savings.

These moves alone would transform the public accounts, lower the cost of borrowing, and so reduce the share of future income which will otherwise have to be paid in interest payments to finance the current debt programme.

A similarly radical approach must be imposed on the NHS. While productivity has improved by 23 per cent in the private sector over the past decade, in the public sector it has actually fallen. If the same productivity improvements had been delivered by the NHS, for example, the exact same level of service could have been bought for £26 billion less.

The radical alternative to an across-the-board cut in NHS services is to insist on the productivity increases that have already been delivered across the private sector. Labour has in the past been almost exclusively concerned about how much money is going into a service. The new politics will focus exclusively on outputs.

Of course, these new strategies would be difficult to enforce, especially in a country groaning under the weight of that colossal deficit. But our fiscal situation actually makes radical change more possible ��" and increases the likelihood that whoever wins the next election could head the league table of great reforming administrations.

edit: subtantial reformatting; wikipedia entry went v wrong

Edited by Si1

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I think Frank got tired of trying to defend the indefencable................i think he also tired of assh*les whom have been on the dole stright from school bitching that they don't have "this or that" & telling him that no way they "Working" for an extra £20 a week.

One thing is sure, the next 5 years will look nothing like the last 20!

Mike

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