It was not too long ago, in fact it was only April 2010, when before the May election the British people heard what the Tory Party would bring in. Six billion pounds worth of cuts. Oooh, painful, but it's a price that has to be paid, to restore the national budget. They'll cut the top-heavy pay...about time.
Work instead of welfare....oh, okay, we'd rather be working....
And now, hardly two years have gone, and the cuts have turned into a huge exercise that has destroyed many jobs, shut many shops and factories and warehouses, cut services in the NHS and schools, and made people wonder on the insistence with Plan A. If Plan A isn't working, then it's time to at least modify it : keep the good elements, and throw out the elements which are proving counter-productive.
Britain is indeed in a favourable position to borrow money on the international markets at a favourable rate, because of its stringent control of the economy, but there are rumours that the triple A rating may be affected in as little as nine months, going by the by-product of the measures, namely the increase in the public sector borrowing last month. If this snowballs, then the whole strategy will be blamed. Now is the time for the powers that be to pause and review Plan A, and see how else it can be modified. A slightly adjusted navigation with a roadmap to Recovery may do wonders.
As Milton Friedmann concluded from his study of the 1930s depression, the logical remedy was an expansion of the work force, turning people into happy citizens doing some work and earning their living. That is the way to create wealth. As people have pay packets, they can buy new cars, take out a mortgage, take some goods on credit, aspire to a rising standard of living. England for the past several decades has had its unique brand of a society blessed with what was termed the New Prosperity. England knows the mechanics of recreating that golden dream which all in England aspire too. Only, the formula needs to be adjusted a little bit, and things will be alright for all, I believe.
Until my next blog,