The Adam Smith Institute and Scientific Alliance predict an energy crisis if the Government continues with its focus on renewable sources

By Joseph Willits 
Follow Joseph on Twitter

A report produced jointly by the Adam Smith Institute (ASI) and Scientific Alliance suggests that the Government's focus on renewable energy sources is both misguided and unrealistic, and could lead to an energy crisis by the middle of the decade if pursued. The technologies used to supply renewable energy sources have been deemed inadequate to cater for the country's energy requirements. The report finds:

• Wind and solar power are not as renewable as they ought to be, doing little to reduce carbon emissions. For wind power to be a successful energy source, the investment in turbines has to be matched by large-scale conventional back-up generating capacity, rendering CO2 reduction has rather modest. With wind power, energy cannot be stored long enough not to require back-up generators. Intermittency will often prove detrimental.
• Energy security is an equal a concern as the reduction of carbon emissions. The intermittency of renewable energy technologies does not provide the much needed security required as many od the UK's coal-fired stations, and nearly all existing nuclear reactors are being decommissioned.
• Renewable energy will be expensive for the consumer through higher electricity prices. The generation of renewable energy is already 28% below an already reduced target. To avoid an energy capacity crisis in the future, nuclear and gas sources would be the best option. Despite being subsidised more in the UK than other European countries, many wind farms are not built due to an inability to connect them to the Grid.
• Both wind and solar power would be inefficient to satisfy the energy demands of the country. In order for wind farms to become a viable commercial option, they would have to rely heavily upon governmental subsidies. The capacity of wind farms would be 25%. The operational life for wind farms is only 20 years.
• For current wind turbine targets to be met, an unrealistic number of 5 to be installed each day, would have to be achieved. The majority would also be positioned offshore.
• The financial incentive for solar power is considerably less due to the difficulty and cost of building solar farms. Solar farms would require a larger land area to be built than both nuclear and coal-fired power stations.
• It is not only cost, but the country's latitude which disadvantages the success rate of solar power. So far, subsidies for solar power have been on a small-scale, domestic level, which is less cost-effective.

Martin Livermore, joint author of the report has said:

“For too long, we have been told that heavy investment in uneconomic renewable energy was not only necessary but would provide a secure future electricity supply. The facts actually show that current renewable technologies are incapable of making a major contribution to energy security and – despite claims to the contrary – have only limited potential to reduce carbon dioxide emissions. Consumers have a right to expect government to place high priority on a secure, affordable energy supply. It seems that ministers have not yet realised the need to invest in more nuclear and gas generating capacity if the electorate is not to be badly let down.”

Think tank reactions to Autumn Statement from ASI, IEA, TPA and Reform

Dr Eamonn Butler, Director of the Adam Smith Institute:

“A £40bn business loan scheme, mortgage guarantees, £5bn of infrastructure spending, 'youth contract' apprenticeships, start-up tax reliefs, new R&D tax credits, extending free child care – these are all Gordon Brown-style tinkering measures that look good in the papers but end up being bureaucratic and wasteful. Far better to leave the money in people's pockets and cut taxes, which will boost confidence.”

Mark Littlewood of the IEA:

“George Osborne is operating in difficult economic circumstances, but this is still a disappointing response. He has effectively ditched Plan A and embraced Plan A minus. He is not sticking to his deficit reduction policy. He is sticking to his spending policy. There’s a world of difference. The initial plan was to add £260bn to the national debt between now and the next election. That has now spiralled to £350bn. If growth and tax receipts are less impressive than initially thought, there needs to be a corresponding reduction in state spending. But the only major spending cut spelt out today – a reduction in the retirement age – doesn’t kick in until 2026. Additionally, upgrading many welfare benefits by a full 5.2% while wages remain flat will not help to incentivise people to enter the workforce. The Chancellor conceded that a possible recession in the eurozone could further worsen economic conditions here, but did not signal a readiness to introduce deeper cuts in spending should this occur. It will be difficult for him to retain his hard-earned credibility in the markets should he fail to indicate that further reductions in spending may be necessary.”

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance:

"There is some good news for taxpayers in the Autumn Statement, but over time the Government still needs to do more to deliver lower and simpler taxes. If tax remains the heavy and uncomfortable burden it is today, growth will stay disappointing. Motorists will be grateful for a better deal as they have been overtaxed for years, although they will need to remain vigilant with a big hike still scheduled for next August. And it is right that the Government keeps pay for public sector workers under control, as they currently get a much more generous deal than those in the private sector. The Autumn Statement was a reasonable start in reacting to the huge challenges facing the British economy, but a more ambitious plan for growth will be needed by the Budget."

Patrick Nolan of Reform:

"George Osborne’s fiscal strategy is turning into alphabet soup: Plan A for austerity, Plan A+ for magic bullets, Plan B for more debt, Plan P for panic and Plan S for spending. Yet rather than being clever, having a fiscal policy that sets out to be all things to all people undermines growth and the sustainability of the public finances. It shows that mistakes of the Gordon Brown era have not been learnt. Real growth will not come from more government tinkering but from a productive private sector."

Sam Bowman of the ASI: A Tobin tax would be an economic disaster

Sam Bowman is Head of Research at the Adam Smith Institute.

Nobody likes to shoot the messenger more than a politician. As Europe’s economies disintegrate, markets are often blamed for creating “volatility”, and are a convenient scapegoat for political failures. The EU-wide Tobin tax announced this week by Angela Merkel and Nicolas Sarkozy is intended to reduce such “market volatility”. As our new paper on the Tobin tax argues, it may have the opposite effect. And, if introduced in Britain, it could cripple Britain’s financial sector.

The report – The Tobin Tax: Reason or Treason? (pdf) – argues that the Tobin tax is an immature idea that has not worked in the past, would not raise revenues, would hurt the UK’s financial sector and could actually increase market volatility. The report looks at the economic case for the Tobin tax, and the only example of a “pure” Tobin tax being implemented in a developed country – Sweden, in the 1980s. In both cases, the arguments for such a tax are shown to be deeply flawed.

Continue reading "Sam Bowman of the ASI: A Tobin tax would be an economic disaster" »

Here you go George; A Growth Manifesto from London's think tanks

By Tim Montgomerie
Follow Tim on Twitter.

On our Comment pages today Mark Field MP sets out the two great truths of the economic debate:

One: We must carry on with the Osborne deficit reduction programme. When you are in a worldwide debt crisis you have to get your debts under control.

Two: The Coalition hasn't got an adequate growth agenda.

Read Mark's piece.

So what can the Coalition do to achieve growth? I asked some of London's top think tanks to recommend some ideas. The list below is far from exhaustive. Missing, for example, are ideas to modernise trade union laws and the Civitas think tank's thinking on better procurement. I also dismiss the idea that a growth agenda cannot have immediate effects. While it's true that many supply side measures can take years to yield benefits (this is certainly true of the Coalition's excellent welfare and school reforms) some - such as tax reforms and deregulation - can produce immediate benefits. There is also the impact on confidence. If the government looks serious about long-term competitiveness then overseas and domestic investors are more likely to stay and expand in Britain.

"If the Government keeps living beyond the means of British taxpayers and businesses, then growth will continue to be limited.  By reducing the incentive to work and invest, high taxes diminish economic growth.  For some tax cuts, the economic effect is dramatic enough they can increase revenue.  That is the case with a lower corporate tax rate, the Government could cut a lot further and faster than they are, and abolishing the 50p rate of income tax.  But there are other tax cuts that would boost growth as well, such as a cut in National Insurance.  And more broadly the relationship between spending and growth shows that imposing too great a burden on taxpayers depresses growth.  European Central Bank estimates imply Brown’s increase in spending as a share of national income left GDP over £100 billion lower by 2010-11." - Matt Sinclair of The TaxPayers' Alliance

More: The TaxPayers' Alliance's Tax Reform Commission.

"In the current circumstances it is clear that the UK cannot afford, above all unilaterally, to move to a low carbon, let alone a zero carbon, economy. A low carbon economy means a high energy cost economy. At the very least, the Government should phase out all energy subsidies of all kinds, and suspend unilateral targets until such time as all other major nations have signed up to the same course. For the UK to go it alone is not merely suicidal but pointless. Decarbonisation requires growing subsidies from the taxpayer and sharply increased energy bills for business, industry, and households. At a time when painful cuts are unavoidable, it makes no sense to make British industry – and manufacturing in particular - uncompetitive, or to drive it overseas, and thus greatly weaken our economy, by ratuitously driving up energy costs." - Benny Peiser of the Global Warming Policy Forum

"The coalition needs to create an environment much more conducive to enterprise. A systematic programme of deregulation should be at the heart of this. The government should start by dismantling employment regulation. Legislation that makes it more expensive to hire workers, such as anti-discrimination legislation, should be repealed. The minimum wage should be regionalised. If the government has not got the courage for radical reform, wide-ranging exemptions for small firms would be a start." - Mark Littlewood of the Institute of Economic Affairs

More: Deregulating the labour market; deregulating energy and transport; deregulating financial sector; deregulating business; and deregulating business.

"Coherent reform of public services is a necessary part of the recovery. It will enable public spending to be restrained while meeting the demands for improved services and it will increase the productivity of the economy, raising living standards for everyone. Poor performing education, health and welfare systems already impose significant costs on the wider economy.  Demographic changes mean that the costs facing government in areas like pensions and healthcare are accelerating rapidly.  The Treasury has made the right call on the big question of deficit reduction, but has undermined the Government's commitment to value for money by ring-fencing certain public sector budgets.  The commitment to the National Curriculum is just one example of the fact that neither Health nor Education have dismantled central regulation and made services accountable to their users." - Andrew Haldenby of Reform

More: Reform's "It Can Be Done" report on public service reform.

“Any growth strategy has to deal with the problem of excessive employment law. According to the World Bank, UK labour market flexibility has slipped down the international league table – from 17th in 2007, to 21st in 2008, to 28th in 2009 and then to 35th in 2010. What was once a source of strength for the UK has become a source of weakness. A moratorium on new laws combined with some deregulation would boost business performance, job creation and restore the UK’s labour market competitiveness. For example, we need to deal with the fact that too many employers are being held to ransom in employment tribunals by vexatious employees and their ‘no win no fee’ lawyers.” - Alistair Tebbit of the Institute of Directors

"There are two fundamental requirements of competitive markets: first, the possibility of 'free entry' for new players and 'free exit' for those that fail; second, that cartels do not dominate a market. British banks fail on both points. That is why they are still not lending enough to small businesses. Why they are still paying senior staff huge bonuses (on top of salaries that were increased to make up for supposed cuts in bonuses). And how the top five banks control 80% of the market (a percentage that is climbing higher and higher). Deep seated banking reform must break up this cosy cartel. We need a new Financial Competition Commission to carry out investigations of individual firms or of product areas, with the power to make recommendations to the Bank of England to promote competition between banks; to remove barriers to entry (and promote new competition); to take steps to permit the orderly exit of failed institutions (break up institutions that are ‘too big to fail’); and to do more to ensure products and services offered are themselves subject to competition. Finally, state-owned banks must be returned to the private sector as soon as they are strong enough; and at the best possible price and greatest reward for the taxpayer (who took on all the risk when the shares were nationalised)." - Tim Knox of the Centre for Policy Studies

More: Niall Ferguson's Too Big To Live; Andrea Leadsom MP's Boost Bank Competition; and James Conway's Give Us our Fair Shares.

"Domestic competition is seen as good because it keeps producers sharp. So why resist it from abroad? Yet we slap import duties on shoes, cereals, electronics – there’s even a tariff of up to 48.5% on Chinese bicycles. Such protectionism allows our producers to coast along instead of becoming world class. It means less choice and value for consumers. And if we are buying less from abroad, people in other countries will have fewer pounds in their pockets to spend back here, so other UK exporters suffer. Let’s not wait for world agreement, but push for bilateral free trade treaties with any country we can – particularly the poorest, who have most to gain." - Eamonn Butler of the Adam Smith Institute

"Welfare reform should not go faster nor deeper than an £18 billion cut. It should, however, move beyond ‘making work pay’. This would mean: Increasing conditionality by asking more of individuals who spend as little as eight minutes a day looking for work; introducing welfare accounts that re-instate the link between what people contribute through national insurance and what they can get out; and privatising some functions of Jobcentre Plus and re-negotiating parts of Work Programme contracts to allow some claimants to get personalised support from day one of their claim. These reforms would provide a critical boost to growth: they would make the welfare system effective in matching claimants to jobs and make the best of the talent of the UK population." - Matt Oakley for Policy Exchange

"In terms of short term hindrances to growth, the total annual cost of family breakdown is £41.74 billion or £1,364 for every taxpayer. Reducing these direct costs would plug a big hole in national and local finances but there are other harder-to-measure indirect costs which hamper our long term economic prospects. The fallout from broken family relationships can hinder children’s educational achievement, dampen their self esteem and affect their physical and mental health - ultimately threatening their creativity, well-being and future productivity. We need to make sure the next spending review includes specific investment in universal credit to eliminate the couple penalty; local councils should collect data on relationship statuses and be set delivery outcomes by national government so they can demonstrate how their policies  are providing relationship support and stabilising relationships in their area; other initiatives that help families (such as Family Nurse Partnerships and Family Intervention Projects) should specifically include couple support - often most effectively delivered by the voluntary sector." - Samantha Callan of the Centre for Social Justice

More: Action on the family.

"The Government needs to push for a long-term solution to the eurozone debt crisis – bailouts aren’t working, debt restructuring will be needed. The longer the crisis goes on, the worse the prospects for eurozone growth and stability look and, as our biggest trading partner, this will have an impact on the UK economy. In the medium-term the UK needs to seek allies in pushing for a better-functioning single market, including deregulation, removing cross-border barriers to services and digital industries, and protecting the interests of the City of London from the EU’s new financial supervisory architecture. This includes securing the flexibility to apply capital requirements for banks as the UK sees fit. In the longer term, the UK should look to diversify its trade away from the eurozone, tapping into the growth potential of emerging markets, which will be necessary in any case but also provides a Plan B if the eurozone fails to get its act together. The UK also needs to continue to push for a reduction in EU external trade barriers and encourage the expansion of free trade agreements with other economies/trading blocs." - Stephen Booth of Open Europe

More from the Open Europe blog: Liberalising the Single Market, Greek debt restructuring, Financial regulation and Trade.

“The Competition Commission needs to be reformed so that it rewards, rather than punishes, firms who share their knowledge on product development and innovation with other UK firms. At present, the UK’s institutional approach encourages firms to compete with each other at every stage, rather than cooperate. Vital information for businesses tends to remain in a particular sector instead of spreading around the whole economy. This puts UK firms at a disadvantage compared to many of their international competitors. Through better knowledge transfer, they can share their ideas on the best strategies to increase revenues and, hence, economic growth.” - Ian Mulheirn of the Social Market Foundation

"Our Government should start by not making matters worse, which means cutting the 50p tax rate, reducing costly regulation, and reversing climate-change policies that are adding so much to the cost of electricity that our key industries will be forced overseas. It should also pursue our enlightened national interest through industrial policy. It should encourage local enterprise banks to restore the initiative to localities. People in the North East, for example, would rally to a local enterprise bank that provided a safe home for their savings and invested them in providing solid, sustainable jobs in the North East." - Dr David Green of Civitas

Read more about Civitas' ideas for a new industrial policy.

"The discussions about boosting the economic performance of UK economy lack clarity and focus. Everyone understands that entrepreneurship and innovation are important for growth, and also that the government has a formidable aptitude to discourage both by ill-advised tax and regulatory policies. We need to move beyond these truisms towards more specific proposals. While we subscribe to many of the views expressed by our colleagues from other London-based think tanks, we believe that any credible pro-growth policy needs to reflect the following two insights, which are conspicuously missing from our present-day discussions.

• Incentives for private-sector employment for high-productivity individuals. In present times, highly skilled individuals are often likely to end up in professions with low social rate of return and in rent-seeking occupations, instead of going into the private sector and contributing to higher rates of innovation and entrepreneurship. Those occupations might include lobbying, tax advisory services, certain elements of legal counselling, and also the work for the underperforming branches of the public sector. Very often, government jobs bid away labour away from marginal private sector jobs. This is especially worrying in situations when the private sector jobs involve significant positive externalities, which are not reflected in employees' paycheck - such as jobs in private R&D. Tax changes, and removing many of the advantages of public-sector employment, as well as employment in some of the rent-seeking professions, could partly correct for this distortion. Also, a flat subsidy could be given to individuals who migrate into private occupations that can reasonably be seen as productive.
• Restoring the approbation associated with entrepreneurship and innovation. This might just require a simple change of rhetoric on the part of the coalition. The government should be more vocal in praising succesful entrepreneurs and innovators as the true heros of our societies, instead of lambasting them for not paying their "fair share" in taxes."

- Dalibor Rohac of Legatum

The Adam Smith Institute argues that Free Schools should be able to exist as profit-making concerns

James Croft is an Adam Smith Institute research fellow and author of its new report, Profit-making free schools, which is published today.

The progress of free school development to date has been disappointing. The Conservatives have rightly identified the need to expand the market as the most promising route to raising educational standards, but lack the necessary conviction in the free market to match their aspirations. In a report published by the Adam Smith Institute today I make the case for an expansion in the private sector’s remit, specifically in respect of the development and delivery of free schools.

The debate about the impact of for-profit management on educational outcomes has thus far focused on the performance of schools run for profit in countries where they are a relatively recent phenomenon.

However, proprietorial (for-profit) independent schools have a long history in England which has been generally overlooked. In their heyday in the nineteenth century, these schools played a crucial role in widening access to education for the emerging middle classes. Today, of 1,849 mainstream independent schools educating pupils at the statutory age, 489 are owned and managed by the proprietors for profit. 83% non-selective, typically secular, with fees at the most accessible end of the spectrum, attracting a high proportion of first-time buyers, 80% located in urban or sub-urban areas, distributed liberally across some of our most wanting metropolitan areas, and socially and ethnically diverse in pupil composition – these schools in many ways already embody the aspiration of what many of the new Free Schools hope one day to become.

Continue reading "The Adam Smith Institute argues that Free Schools should be able to exist as profit-making concerns" »

The Adam Smith Institute urges tax cuts to raise more revenue

Peter Young is fiscal policy adviser to the Adam Smith Institute.

The UK has become one of the highest taxed countries in the world. Our competitiveness has suffered and economic growth is being stifled. In a comparison of top personal tax rates in the 86 largest economies, Britain languishes at number 83.Today even France can be considered as a tax haven relative to the UK.

High UK incomes taxes will raise less revenue not more.  The evidence from other countries as well as Britain in the 1980s is clear.  Our report, The Revenue and Growth Effects of Britain’s High Personal Taxes, cites sixteen specific examples from seven separate countries to demonstrate that, when high tax rates go down, public revenues go up.

Some people seem to think, for reasons that are unclear, that this time the experience in Britain will be different.  But that is implausible.  “There is no science behind it. It's simply my judgment that I thought that figure was an appropriate one,” Alastair Darling said, in a notable abandonment of evidence-based policy-making, when he introduced the 50% rate.

Continue reading "The Adam Smith Institute urges tax cuts to raise more revenue" »

The Adam Smith Institute condemns the Government's proposals for selling off state-owned forests for being too timid

By Jonathan Isaby

The Government has come under fire from many quarters for its plans to potentially sell off some forests which are currently state-owned.

Yet today comes criticism from another angle: Miles Saltiel of the Adam Smith Institute has published a critique, Seeing the Wood for the Trees, which condemns the Government for not going far enough in its plans.

He states:

"The consultation document put out by DEFRA is timid and relatively unambitious. It has sought to pre-empt objectors with the expedient of allocating high-profile woodlands to “civil society” or charitable bodies free of charge, failing to follow best practice elsewhere. This is irresponsible to the long-suffering taxpayer.

"Instead, DEFRA should follow the option already identified for the majority of the national forest and sell or lease it all, subject to covenants and arms-length regulation, guaranteeing public policy objectives and raising an estimated £4.3bn. If the purpose is to restore heritage and suchlike woodlands to the public, better to do so directly through a programme of “voucher privatization”, rather than indirectly through the intermediate bodies of self-elected charities or hard-pressed local authorities."

Click here to download the pdf of the report.

> Tim Montgomerie's defence of the Government's plans

> Stanley Johnson: The Government's plans to sell off England's forests are a disaster in the making

Free market think tanks unite against increase in VAT

Tim Montgomerie

Four of London's leading think tanks have all attacked today's increase in VAT to 20%; an increase that George Osborne intends to be a permanent rather than emergency fixture.

Leading the charge has been Matthew Sinclair of the TaxPapers' Alliance. Speaking to the BBC earlier he pointed out that David Cameron had broken a promise not to raise VAT. The Lib Dems even ran a poster campaign against higher VAT (remember this?).  Matt Sinclair said taxes were high enough in Britain and more should have been done to cut spending.

Philip Booth of the Institute of Economic Affairs sets out the alternatives to higher VAT in a powerful piece on Coffee House:

"The NHS has been ring-fenced, even though it has experienced huge budget increases and has a shocking productivity record. Pricey gimmicks given to pensioners such as the Winter Fuel Allowance, free television licences and free bus travel remain in place, whilst the government has promised to increase state pensions in line with the higher of inflation, earnings or 2.5% - the “triple lock”, as the government calls it. This last profligacy is wholly unnecessary at a time when much of the working population is experiencing real wage reductions. A 2.5% trim of the NHS budget, not increasing the aid budget, the abolition of the pensioners’ gimmicks and not implementing the triple lock would enable the government to cancel the VAT increase with considerable room to spare."

Dalibor Rohac, a research fellow at the Legatum Institute, disputed the idea that a VAT rise was less economically harmful than other alternatives:

“There can be no question about the fact that the British economy would benefit from further downsizing of the public sector, but one can understand how difficult it is implement sizeable spending cuts, especially in the short run. This being said, the Chancellor is mistaken if he believes that a rise in the VAT will have a smaller impact on the economy than a rise in the income tax. For all practical purposes, the VAT and the income tax have the same economic effects and lead to equivalent economic distortions. Even if we were to accept that tax increases were needed, there are alternatives to a VAT hike, which would have a much smaller impact on incentives to work and do business.”

Tom Clougherty of the Adam Smith Institute (which recently calculated that Tax Freedom Day will be three days later this year) argued that the Coalition should be CUTTING tax to stimulate growth and revenues:

“Rather than increasing taxes, government should be looking at making targeted tax cuts to encourage economic growth. Raising the VAT might be the “least worst” option, but it still risks putting a dampner on our economic recovery.”

I have argued against the VAT rise but now regard it as a battle lost and surrender.

Next year, you'll stop working for the state on 30th May

Tim Montgomerie

Tax Freedom Day is the day we stop working for the government and start working for ourselves.

The Adam Smith Institute has calculated that Tax Freedom Day 2011 will fall on 30th May, three days later than this year. The increase in VAT to 20% is the main explanation for these extra days.

Tom Clougherty, Executive Director of the ASI, commented:

"Britons are still desperately overtaxed. The fact that we spend almost five months working for the State – and only seven months working for ourselves and our families – is a shocking indictment of big, wasteful government.”

The table below, from the ASI, summarises the last ten years:

> Last year's ASI page on Tax Freedom Day.

The Adam Smith Institute assesses when Britain might go bust

Eamonn Butler is Director of the Adam Smith Institute, which has just published On Borrowed Time by Miles Saltiel.

There’s another financial crisis facing the UK, according to the award-winning analyst Miles Saltiel in a report for the Adam Smith Institute, On Borrowed Time. And this time we won’t be able to blame the Americans, or the banks, or anyone but ourselves. Because the next crisis will be caused by us promising ourselves state healthcare, pensions, and other benefits that our taxpaying children just simply won’t be able to afford.

We are in a much bigger debt hole than any government is prepared to own up to. On top of the trillion or so they admit, you have to add another three trillion or so for the future costs of public and state pensions. Then what about the cost of all those healthcare and other benefits? Our problem is not just that the last government spent billions trying to borrow its way out of economic incompetence – and indeed trying to borrow its way out of debt. Our real, long-term problem is that we have promised ourselves more and more generous benefits on the assumption that we can pass the bill to our kids.

If we had the decency to kill ourselves with booze and fags, there wouldn’t be so much of a problem. But now we are all goody-goodies and living well beyond our allotted span, all those promised pensions, health benefits, free TV licences and bus passes, winter fuel payments and the rest add up to an unpayable bill.

Saltiel looks at three scenarios. The first is where the current Government’s ‘cuts’ – well, you know what I mean: reductions in the rate of increase – work through until 2015, and then the proceeds of any economic growth after that go to fund yet more government spending. That is not as outlandish as it sounds, because governments these days are pretty good at swallowing up the greater part of our economic growth. But if they do, Saltiel figures Britain will be bust by 2019.

The second scenario is where future governments show uncharacteristic restraint and split the proceeds of growth 50:50 between increasing public spending and reducing public debt. We still go bust, but not until 2031.

The third possibility is where all post-2015 growth goes into paying off our debts. The cheery conclusion is that in time, we could actually pay off the national debt. The chilling conclusion is that even with restraint on that scale, it wouldn’t be paid off until 2041, so there’s only an evens chance that I would live to see it.

We can’t keep voting ourselves gold-plated social benefits. We need to make politicians fess up to the real scale of the obligations we have shifted onto future generations, so we can see just how deep a hole we are in. Then we need to make them reveal the future cost of new policies they propose today. And we need to put limits on how much cost we can push onto our children. Otherwise, both generations have had it.