The Horsell's Mouth Politics, pedantry and personal interests

In the dark - Broadcasting House seems to have its own view on economics

Apparently two separate blog entries in lightning succession trying to make hay out of the Hatfield House meetings clearly wasn’t enough for Nick Robinson, who surely won’t still be BBC Political Editor by the end of the year. The fact that no other media saw fit to run with this story in a big way shows how isolated he is, how drawn into the Labour spin trap.

We now have another blog post on Tory cuts that tries to have it all ways – saying the Conservatives will cut and if they don’t painting that as a U-turn and another slight on DC. He then helps perpetuate the myth that government spending boosts growth and will therefore aid a recovery. Government spending doesn’t boost growth - it creates its own growth, which then disappears once the subsidy is withdrawn. The UK would still be in recession without the Car Scrappage Scheme – with that scheme over, the car industry can expect a significant downturn in the months ahead.

Today, the Labour group on the LGA announced it would push for a 1% pay increase for the least well paid rather than exercise restraint. Again, the money that goes into propping up more and more public sector wages is a massive ongoing subsidy and one that cannot be withdrawn now it has been enacted without devastating unemployment. The reduction of the public sector headcount must be a target of a Conservative government because it is not healthy for our economy, society or democracy for such a large proportion of the population to be employed by the government.

But now so many are, reducing that number is a hugely painful and expensive thing to do. We mustn’t make the same mistake with the economy by using more government money to prop it up – it needs to be nurtured and kicked into a recovery of its own and the only way to do that is to reduce our debt. Yesterday Bill Gross told investors across the world to avoid the UK because of our huge debts, weak currency and fragile recovery. Like George Osborne, he sees that debt reduction – preferably quickly – is the only way to restore confidence, maintain our credit rating and keep interest rates down.

It’s all very well pumping money into the economy – even if it doesn’t actually promote sustainable growth. But if people’s mortgage rates go from 2.5% up to 6% within 12 months, it isn’t going to leave them with much money to aid the recovery; in fact, many of them will be worse off than they were while we were in recession.

So the BBC needs to stop chucking the last dice all over the place in support of Labour and start understanding that more borrowing and spending in the short-term is going to make the problem far, far worse. If they leave everything as it is, we will fingernail into a slow and drawn out recovery process during which many people will be worse off than they have been for the past two years.

Only by committing to reduce the deficit can we carry the confidence of the markets, which are the real force behind recovery. We need to cut public spending while keeping as many people as possible employed, to raise taxes for those that can afford it most and keep interest rates down while selling on as much of our debt as we can. It’s not going to be easy.