Winston Churchill said of Russia some 70 years ago “it was a riddle, wrapped in a mystery, inside an enigma”. One can only speculate as to how he would have described the rotting and crumbling Labour Government of today. But it strikes me that it is a dishonest wastrel, wrapped in spin, inside a fraudulent self-serving and imploding machine.
Barely had the pundits finished picking over the bones of the less-than-tasty dish served up in last week’s Budget when we were served the delights of Harriet Harman’s latest effort to tie the business community up in yet more pointless bureaucracy. In her “Equalities Bill” annual reporting of pay for men and women (or should that be women and men?) would become a legal requirement in 2013 if employers failed to comply “voluntarily”. So now we know what voluntary means in Ms Harman’s lexicon. It means you must do it or, if you don’t, we’ll force you to.
Behind this move was the notion of the “gender pay gap”, the difference between average pay rates for men and for women, and how it “must be closed”. Ms Harman quoted the gap at 23%. But she chose to include part-timers – mostly low paid women – producing a far higher figure than the official ONS estimate of less than 13% which is for full-time employees and may be regarded as a significantly more meaningful statistic. Figures apart, there is the implication in Ms Harman’s comments that the gap was the result of “unfair” discrimination against women by employers. Yet this accusation is ill-supported by a strong body of research and survey evidence that shows the pay gap can overwhelmingly be explained by the different career and lifestyle choices of individual men and individual women. The implicit accusation against employers is therefore a grossly unfair slur.
Yet on the basis of twisted logic, highly selective data (used for support rather than illumination as a drunk uses a lamp-post) and false accusations business is to be burdened with yet more unproductive, time-consuming red tape. The road ahead for the British economy is going to be tough, even once the worst of the recession is over, and we will be relying on business to pull us through. They deserve support, not bureaucratic and ideological nonsense.
A final note on this vexed subject, a certain business paper helpfully pointed out this morning that the gender pay gap for health department senior grades was minus 3.3%. By Ms Harman’s logic the health department discriminates against men. But that doesn’t matter.
I’ll end this post with a comment on the Budget. Of course, I understand the Chancellor, as a politician, has to defend his wretched government’s catastrophic economic record. But, having said that, I trust he appreciates the true scale of the disaster of the public finances and how he needs to shore up the confidence of the financial markets in order to find buyers for the £220bn of gilts issuance this year (£900bn over the next 5 years). Speculation of a buyers’ “strike” is already talked about. The very least he should have done under these circumstances was to provide an honest assessment of the fiscal crisis and outline a plausible path for the restoration of the public finances. But instead we were served party-political posturing and irresponsible procrastination.
However dreadful the Budget’s borrowing numbers were, and they were, the Budget was deficient in at least four ways. Firstly, his economic forecast was too optimistic and effectively blown out of the water when the GDP figure for the first quarter of this year was released last Friday. The economy would essentially have to be flat for the rest of the year for the Chancellor’s fall of 3½% in GDP for 2009 to be achieved. Public borrowing will almost certainly be higher, therefore, than forecast.
Secondly, some of the Chancellor’s “tightening” measures, including the spitefully political top rate of tax and the “efficiency savings”, will almost certainly not deliver the revenue and the savings pencilled into the Budget projections. Thirdly, the Budget had at its goal a balanced current budget by 2017-18. But, according to the Institute for Fiscal Studies, the measures announced by the Chancellor in the 2009 pre-Budget Report and Budget 2009 (taken together and at face value) would only “deliver” half of the tightening needed to achieve this goal. In other words, measures as yet unannounced would be required to achieve a current budget balance by 2017-18. The Chancellor tells us therefore how tough he would be, but doesn’t share with us how he’s going to achieve it.
Finally, the goal of a balanced budget in 2017-18 is far too remote and unambitious. Perhaps I am unnecessarily fretting about the markets, but surely the public finances will need to be brought to heel quicker than this. Suffice to say bringing the goal of a current balance forward would require much quicker and tougher tightening.
One thing is certain. By June 2010 we will have a new Government. They will inherent a poisoned chalice. How different it was in May 1997 when Gordon Brown inherited a Golden Legacy. “Things can only get better” we were told. Really?