Fiona Melville

29th Nov 2011

A trite title but an apt one… Let’s go in reverse order as I’m an optimistic kind of person.

The Ugly

Our deficit and debt positions are ugly. Our economy is going to get uglier. Most peoples’ living standards are too.

The bad

Well I’d argue that increasing benefits but effectively decreasing pay is bad. I kind of understand why it’s being done and if it were the case that the poorest people in work would benefit from this the most it would be fine but I suspect that isn’t the case.

I also am very unkeen on the rowing back on the promises to be the greenest government ever – it is possible to go for clean growth and to be a world leader in clean technology but if you don’t incentivise it, it won’t happen. And, while I know it makes me sound like an out of touch metropolitan, I still think we should maintain carbon pricing and shift taxation from good things like work and saving onto bad things like pollution.

I also am slightly at a loss to justify the government spending taxpayers’ money on supporting businesses or mortgage applicants that banks won’t lend to; surely that is part of what got us into all this trouble to begin with? I’m prepared to be argued out of this one but it does seem counter-intuitive.

The good

Hmm. This is tougher. All the infrastructure projects are individually no doubt needed, but I wonder if they add up to something at a national level?

More people being able to buy their own home is a good thing for many reasons (not least, because people who own their homes are likely to have greater respect for and engagement with their surrounding communities) and I’m very pleased that the proceeds will be ploughed back into building more homes. I’d suggest, though, that as well as building new homes we should be aiming to refurbish existing buildings which have fallen out of use.

The Youth Contracts sound great if expensive (my maths is very shaky – maybe I should go to one of these new Maths Free Schools); I calculate that £1 billion for 410,000 young people for 6 months at 40 hours a week works out at something like £2.34 an hour which is £93 a week which is almost double the £50.95 of Job Seekers Allowance for 2011.

There are lots of other details but my overall impression is a lot of little bits and pieces. It all sounds very big and bazooka-like but is it? More to the point, should it be? Many of the measures announced since May last year will take time to have an effect; part of the criticism that we all, as Conservatives, made of Labour was that they used to do little widges here and a little tightening there, and then go back year after year and fiddle about some more; there was very little certainty, yet one of the very greatest confidence-builders any economy can have is advance knowledge enabling businesses to plan.

I’ll come back to the bazooka versus widges argument tomorrow, I think – it’s a much bigger conversation.