The Chancellor’s black holes

Today in the Commons it was the Chancellor’s turn to show he has gained his diploma in Tory bashing from the Ed Balls academy.

Apparently the failure to build Crossrail during the last fifteen years is all down to the Conservatives who were in power for five of the fifteen years. Meanwhile we are told that every policy difference between Conservative and Labour is the cause of a “black hole” in the figures.

Can you create a black hole by saving all that money from abolishing ID cards, or slimming down regional government and quangoes, or cutting the regulatory bureaucracy? And how does that mythical black hole compare with the gaping black hole in this government’s figures, filled by borrowing through the government debt market, borrowing through PFI and PPP, and by offering guarantees to others that are not recorded on the government’s own balance sheet? Ever since Gordon divorced Prudence, this government has run up collosal debts, whilst criticising others for being masters of black holes. This Chancellor has added massively to contingent liabilities by offering ??23 billion of loans to Northern Rock and offering to guarantee the deposits of any bank in trouble.

When in a black hole of his own, the Chancellor should stop digging.

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  1. Tony Makara
    Posted November 14, 2007 at 5:36 pm | Permalink

    It is unfortunate that the average man in the street knows very little about how government borrowing works. Many a person labours under the assumption that the government gets what it needs through taxation and that any further money borrowed by the government is ‘invested’, if only that were true. The guarentee to Northern Rock and all other banks is tantamount to nationalization of a failed business or a promise of unlimited credit to a reckless Las Vegas gambler. The fact that the chancellor was prepared to pay 23 billion to buy a favourable headline tells us much about the stop-gap nature of this Labour government.

  2. Michael Imperi
    Posted November 15, 2007 at 11:19 am | Permalink

    I think in order for the average man in the street to understand the figures and how much this government incompetence is costing we should maybe quote figures per capita. E.g 23bn on Northern Rock is equal to a liability of about GBP 741 per UK Taxpayer , Tax Credit errors GBP 161 . I am sure that put in this way it would have better resonance . Would you vote for a Government who is planning to collect from you GBP 900 in order to save a badly managed Bank and correct errors in Benefits Handouts?

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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