We must face up to the fact that the nation is mired in poverty

Monday 14 January 2013

IF a lie is repeated often enough it seems to become an accepted truth.

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One of the greatest lies of all is that government expenditure is currently being cut. The projected figures for UK public spending from the Office of Budget Responsibility are: 2012-3, £674 billion; 2013-4 £720 billion; 2014-5 £731 billion; 2015-6 £745 billion and so on. There are no net cuts.

A responsible commentator might note that there are very substantial re-allocations. Pensioners have done very well out of this Government and the NHS is ring-fenced: two huge outgoings where budget growth continues. When the Coalition was formed, Nick Clegg said it was taking the country back to the long-term trend growth rate in public expenditure. There have been no overall cuts in expenditure taking place, nor are there proposed to be. Certainly debt interest has gone up; certainly resource has been re-allocated. And the demands on certain areas of the budget continue to rise with an ageing population. But that is very different from the easy potshots commentators and correspondents make. Why then is a story of cuts endlessly peddled? The Tories want to appear hard as nails to their backwoodsmen, the Liberal Democrats wish to appear fiscally prudent and Labour and the SNP wish to wield a large stick of abuse without needing to offer anything positive in return. But that politicians all sing from the same hymn sheet surely means it is the duty of the press to challenge it? One of the deputy governors of the Bank of England recently commented that the financial situation was akin to fighting a major war. And he is right. UK public debt is rising now at a rate only comparable with that of the First and Second World Wars. Even a very rosy prognosis indicates stabilisation at some 80% of GDP, up from 40% or so when the crisis began. Other commentators predict a rise to nearer 100% – Italian levels without even factoring in our huge pool of privately-held debt. And of course public expenditure is at an eye-watering 48% of GDP.Within the deficit there is a hard a core of structural debt, which has barely shifted since the Coalition came to power at some 4.5%. The original idea that a cut of £1 billion would lead to a loss of £500m in output has been discredited by the IMF, which has come up with a multiplier of 0.9 to 1.7. Much of the British economy is no longer healthily financing a public sector but is now reduced to dependence on an unsustainable fiscal position. We are all much poorer than we thought. There are many legitimate arguments to be had about how to stimulate demand in our economy and how to rebalance in a world where country after country is having to recognise it is on its own fiscal cliff. If we are to become richer again, it can only come from recognising our poverty now. Honesty may be deeply uncomfortable, but it is a necessity.Hugh Andrew,West Newington House,10 Newington Road, Edinburgh.THE word that keeps being brought up in the comments, analysis and correspondence around the current hot potato of welfare reform is "fairness". Indeed, the Coalition's argument for capping the rise in benefits to below inflation, at 1%, seems to be almost entirely based on its view that this is "fair" – conveniently ignoring the fact that a 1% rise for a civil servant on, say, £150,000 a year is a very different matter from a 1% rise for their much-vaunted hard-working hospital cleaner on, say, £18,000 a year. But amid all this talk about what is fair, why is it that we hear no discussion at all on what is just? Surely justice, rather than fairness, is the mark of a truly civilised society? This country used to see itself as founded on the sound Judaeo-Christian principle of justice, with a bias towards those living in poverty; and the main Christian churches in Britain still seek to promote the view that God has a preferential option for the poor. It would be a great boon if a mainstream political party could bring itself to promote that view as well.Rev Dr W J Harvey,501 Shields Road, Glasgow.

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We must face up to the fact that the nation is mired in poverty

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