The Jamboree Is over, So Why Do Our Leaders Live in Fantasty Land?
Byline: ON MONDAY Allan Massie
THE full horror of Alistair Darling's Budget statement is only just beginning to dawn. Not everywhere, admittedly: the SNP administration still seems to be in denial.
The UK Government's borrowing will increase by [pounds sterling]175billion this year and [pounds sterling]173billion the next - and even these figures may be under-estimates; after all, the Chancellor's own forecast for this year's debt has more than doubled since his November pre-Budget statement.
It won't be long before interest payments on the debt - never mind beginning to reduce it - are costing more than the defence budget, more, perhaps, than the budget for schools.
It's bad news, very bad news, and there is only one small gleam of light. Some day, when the banks have repaired their balance sheets and their share price has risen, it will be possible gradually to sell the Treasury's stake in the Royal Bank of Scotland and Lloyds-HBOS and return them to the private sector.
That sale will enable some debt to be repaid, but the day may be distant, maybe three years down the line. Till then, a huge part of Government revenue must be diverted to service the debt.
Meanwhile, tax revenues are falling and will not recover till we are well on the other side of the recession. The politicallyinspired 50 per cent tax on incomes over [pounds sterling]150,000 will bring in only a piffling amount. So there will have to be cuts in Government spending.
It was a Labour Prime Minister, Jim Callaghan, who laid it on the line way back in 1976, when he told his party conference: 'You cannot spend your way out of a recession and increase employment by boosting government spending.' It's not yet clear whether Gordon Brown and Alistair Darling have got this message, though one suspects Darling may have.
But it is, sadly, abundantly evident that, here in Scotland, Alex Salmond and his Finance Secretary John Swinney have not.
They are still living in the past, or in fantasy land, resisting any suggestion that Scottish public spending should not only be reined in, but sharply cut.
Most of us can think of cuts that might be made quite easily. Some, sadly, are unrealistic: closing down Holyrood, for example.
Some we might suggest would be little more than cosmetic: such as Government ministers and members of all four parliamentary bodies in the United Kingdom agreeing to cut their own salaries sharply and reducing their claims for expenses to a bare, but reasonable, minimum.
Do ministers need as many 'special advisers' as they have, or would government function every bit as well if they were got rid of? These would be no more than gestures, but gestures that would set an example.
So far in the recession, it is the private sector that has suffered. Public spending has continued to rise.
Some of this is inevitable. Higher levels of unemployment mean higher levels of social security payments. But some public spending can be easily contained without affecting the delivery of public services.
There should be an immediate freeze on all public sector salaries above a certain level, with an actual reduction in the salaries of top civil servants, top local government officials and members of quangos.
Pension schemes based on final salaries have all but disappeared from the private sector. It's wrong that they should survive in the public sector.
Other cuts should be considered. Does the health service need as many employees at managerial level as it now has? It used to get by with far fewer and was no less efficient then.
The Centre for Public Policy for the Regions, based at the universities of Glasgow and Strathclyde, has no doubt that cuts are necessary and calls for 'deeper efficiency savings, the reintroduction of bridge tolls and of prescription charges'. It also suggests that the council tax freeze will have to be abandoned. …